GREEN DEALS: Geothermal gloom

Panax Geothermal has all but written off its Australian assets, Carnegie Wave receives its first payment from the government, CBD stock is suspended ahead of write-downs and the Boco Rock wind farm could soon have a new stakeholder.

Panax Geothermal

Panax, an ASX-listed firm focusing on geothermal energy, has said it is making progress on financing initiatives, albeit slower than it had hoped, with “a number” of international and Australian parties having now largely completed due diligence. The money will be heading to its Indonesian developments however, with little interest in its Australian assets.

Panax identified three specific potential partners that were suitable to their plans, although the company did not name them specifically. The three included a syndicated group of Singapore-based investment funds, a European-based investment fund and a Chinese-based conglomerate.

While the company is bullish on Indonesia, its optimism does not spread to its Australian assets, specifically the Penola project. In 2010, Panax completed the drilling and production testing of the Salamander-1, 4,025 metre deep geothermal well at the Penola Project. While the company maintains the results of this well were “historically significant”, it has no intention to commit any funds to its Australian assets unless there is “a substantial commitment of funding from the Australian government towards developing Australia’s significant geothermal resources.”

“The investment public view is that the Australian government needs to commit significant and real funding towards the reservoir development aspects of geothermal projects in Australia, as a clear signal of support to the investment public,” the company said.

As a result the firm has all but written off its Australian assets (Penola, Limestone Coast and Cooper Basin) leading to an impairment charge of $26,086,081.

“These assets have not been written off in our accounts and should any further work provide sufficient prospects for future return, all or part of the impairment charge can be reversed,” the company told shareholders.

In a big update from the company, it was also reported that its chairman, Gregory Martyr, will retire from the board, effective from the next AGM (November 20) and company secretary Kerry Angel has resigned.

Carnegie Wave Energy

Carnegie is about to receive its first milestone payment for the Perth Wave Energy Project from the federal government.

The payment, of $248,561 plus GST, has been signed off by the Australian Renewable Energy Agency and will be in its accounts shortly. It represents the first funds Carnegie has received from the $9.9 million the federal government committed to the company’s Perth project in May.

“The milestone was for the completion of the Basis of Design for the Perth Wave Energy Project at Garden Island and completion of the community consultation and risk management plans for the project,” the company told shareholders.

The ASX-listed company added that detailed design and approvals for the project were on track to be completed by the end of 2012.

CBD Energy

A delay with the posting of CBD Energy’s accounts to the ASX has forced the stock exchange to put trading of its shares on hold indefinitely. The hold-up has been caused by a reassessment of the firm’s assets, which is likely to see significant devaluations in its accounts.

“The quantum of the impairment charges has not yet been finalised, however, the reported net loss for the 2012 financial year and the net asset position of the group at 30 June 2012 will vary materially from those reported in the preliminary final report,” the Mark Vaile-chaired company said.

Boco Rock wind farm

The Boco Rock wind farm, being developed by Wind Prospect CWP, is looking for a new investor after recently agreeing to terms with TRUenergy on a power purchase agreement, according to Dow Jones Newswires.

GE Financial Services is one party keen to gain a stake in the project, according to the report, although will not look to buy it outright.

Stage one of the project is for 66 turbines (generating 107MW), with the developers having approval to build 122 turbines. Stage one is likely to cost $300-$350 million, and if the developers follow through to make it a 122-turbine, 270MW project – as stated in its approved plans – the cost will be around $700 million.

Stage one is due to become operational in early 2014.

Pacific Hydro

Pacific Hydro has said the Codrington wind farm, one of Australia's first, has passed a mid-life health check.

In 2001, the 14-turbine, 18MW project became operational, making it the first wind farm in Victoria. While historically significant, in today's terms it is very small and dwarfed by the likes of the Macarthur wind farm – which at 420MW will be Victoria's (and Australia's) largest upon completion early next year.

Another of the firm's early wind farms, Challicum Hills, is also worthy of a mention, with August seeing the development in Victoria achieve near record production. Indeed it was the site's second highest month of generation since it came into operation in 2003. At the time of its completion it was Australia's largest wind farm at 52.5MW.

Geodynamics

Geodynamics has completed the sale of the jointly-owned Rig 200 to a subsidiary of Pangaea Resources. The $21 million deal was first announced in June and has now been completed.

Geodynamics owns 70 per cent and will receive $14.7 million with the rest going to joint venture partner Origin Energy.

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