Gamble of the week: UK gas producer

With natural gas prices expected to soar next winter, this British gas producer is well-placed to profit, says Paul Hill.

Alkane Energy, the UK's leading coal methane producer, owns licences to convert the noxious gas from abandoned mines in Yorkshire, the East Midlands and Wales into power using transportable generators. This is becoming more and more valuable. Its equipment sits on top of scarce energy stores that can be turned on or off as the country's electricity demand fluctuates throughout the day.

Alkane has already secured contracts with GDF Suez and National Grid, where it is effectively paid a retainer to do nothing other than wait for a spike in consumption or a loss of output. For every 8MW of installed wind power, it is estimated the grid needs about 1MW of standby facilities. The income from this is complemented by non-peak sales.

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.