Alkemy Capital. Regulatory News (ALK)

3rd September 2012

Alkane Energy Plc

('Alkane')

£1.6m Biogas Contract

Alkane Energy plc (AIM: ALK), the independent gas to power producer, has been appointed as sub-contractor to supply the gas to power capabilities for a new biogas project at the Dagenham Waste Facility.

The capital contract is worth c. £1.6m, with an additional 15 year maintenance contract. The site is planned to become operational by the end of 2013.

This contract brings Alkane's total capital order intake in biogas to over £4m so far this year. The Dagenham site is our fourth biogas project, with our expertise being utilised to provide the combined heat and power plant, the integration of site heat and electrical systems, and a full gas to power solution.

Alkane will be announcing its interim financial results on 12 September 2012.

Neil O'Brien, Chief Executive Officer, commented:

"This latest contract award strengthens Alkane's position in biogas, where we will continue to look for opportunities to leverage our gas to power skills."

About Alkane:

Alkane Energy is one of the UK's fastest growing independent power generators. The Company operates mid-sized "gas to power" electricity plants providing both predictable and fast response capacity to the grid. Following the acquisition of Greenpark Energy Limited ("Greenpark"), Alkane has a total of 74MW of installed generating capacity and an electrical grid capacity of 89MW.

Alkane's main operations are based on a portfolio of coal mine methane ("CMM") sites. Alkane has the UK's leading portfolio of CMM licences, enabling the Company to extract gas from abandoned coal mines. Alkane started extracting CMM for direct sales of gas in 1999 with sites at Shirebrook, Steetley and Markham.

As CMM declines at any one site Alkane retains valuable generating capacity and a grid connection which we move to power response. Power response sites are connected to mains gas and produce electricity at times of high electrical demand or in order to balance the electricity grid. Alkane now allocates 31MW to conventional gas post the Greenpark acquisition.

The Group operates from 19 mid-size (up to 10MW) power plants across the UK, 12 CMM, 4 conventional gas and 3 using both fuel sources, and sells this power through the electricity network, using standard modular reciprocating engines to generate the electricity. The engine units and other plant are designed to be flexible and transportable and this allows additional capacity to be brought onto growing sites and underutilised plant to be moved to new sites to maximise efficiency.

The biogas market also provides a potential new business stream. Running on gas generated from the processing of organic waste will require exactly the same power assets and core gas and electricity skills as CMM.

Coal bed methane ("CBM") is a longer term opportunity where Alkane has 605km2 under licence and contingent resource estimates of circa 385 billion cubic feet. In February 2012 the Company signed a partnership agreement with Aberdeen Drilling Management Limited to explore two of our licences with CBM potential.

More information is available on our website www.alkane.co.uk