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Eco Investor Update

A Weekly News Update for Environmental Investors

1 August 2011 - No 42
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ASX 100

DUET Group
Financial close has been reached on DUET's transactions with ATCO Ltd and AET&D Holdings No 2 Pty Ltd (AET&D). The deal sees DUET Group increase its holding in the Dampier to Bunbury Natural Gas Pipeline and Multinet, despite some earlier concern it may not proceed.

DUET's chief executive officer David Bartholomew said "The AET&D sale process provided a unique opportunity for DUET. We have acquired an additional 20 per cent interest in Dampier Bunbury Pipeline (DBP) at a discount to RAB, a further 20.1 per cent interest in Multinet and divested our 25.9 per cent interest in WA Gas Networks.

"In aggregate, DUET entities now hold majority-ownership interests in three regulated Australian energy utility businesses - 80 per cent of DBP, 100 per cent of Multinet and 66 per cent of United Energy.

DUET will now look to finalize its review of the Group's future capital requirements and provide medium term targets for gearing and distributions.

As a result of the transactions, a review event applies to Multinet's bank facilities that were drawn to $330 million at 30 June 2011. However, no material consequence is expected as Multinet had already planned to refinance around 80 per cent of those facilities later this year.

Elsewhere in DUET's portfolio, the Australian Energy Regulator (AER) has released its draft determination on United Energy's Advanced Metering Infrastructure (AMI) 2012-15 budget application. The final determination is due on 31 October.

The draft determination provides for significantly lower forecast operating and capital expenditures than United Energy's proposed budget application, resulting in a revenue allowance for the 2012-2015 period that is 8.1 per cent lower.

United Energy said the difference reflects the different views held about the forecast expenditure needed to deliver the AMI rollout across its network, and that it will work with the AER to provide further information to support its forecasts where required.

A substantial part of the difference relates to forecast foreign exchange rates with the US dollar exchange rate now significantly more favourable than the rate UE assumed when making its submission, and discretionary programs which will not proceed if the budget is not approved.

"UE does not see any issue in resolving these differences before the final determination," it said.

United Energy's chief executive, Hugh Gleeson, said the AMI regulatory cost recovery arrangements ensure that UE will recover all prudent expenditure, despite any differences in budget forecasts. For example, cost recovery for the purchase of meters will be based on actual number of meters installed, not forecasts. As a result, UE does not expect any material under-recovery of its costs. (ASX: DUE)

ASX 200

Dart Energy
Dart Energy has welcomed the NSW State Government's new rules to address concerns about the safety and environmental sustainability of coal seam gas development in NSW. Dart Energy said it is "pleased to see that the new rules are in line with the company's Position Statements for NSW".

In regard to the ban on the use of BTEX chemicals as additives, Dart Energy said it has a policy to not use BTEX as direct additives in its operations.

In regard to the extended moratorium on the use of fraccing until 31 December 2011, Dart said none of its planned drilling activities involve hydraulic fracturing.

In regard to the requirement for companies to hold a water licence to extract more than 3 megalitres per year and the ban on the use of evaporation ponds, Dart said it does not expect this to impact its operations as it expects significantly lower water production from its wells. The company said it "is committed to evaluating effective methods of water treatment for beneficial use".

In regard to public consultation guidelines to increase transparency and accountability, Dart said it is committed to being entirely transparent in its operations and to share information openly with local communities and regulators.

For the rest of 2011, Dart Energy has three operational priorities in NSW:

* Dart is planning a two well pilot, expected to start drilling by year end, at PEL 458 near Newcastle. This has 1.3 Tcf of Gas-in-Place (GIP) and is a priority as Dart believes the resource can be matured rapidly. Given the proximity to infrastructure and potential gas markets there are a number of near-term commercialization options.

Access agreements have been secured with supportive private landowners for both sites, it said.

* Dart and its partner Santos intend to drill a pilot well early in 2012 at PEL 456 in the Gunnedah Basin in the Hunter Valley. No fraccing will be required. Work is underway on pilot well design, environmental studies, community engagement and securing approvals and land access agreements.

This licence has 30.2 Tcf of GIP and evaluation of the resource and reserves is a priority.

Dart Energy said it believes the Gunnedah Basin will over time mature into a significant coal seam gas region, and that PEL456 will be of increasing strategic significance.

* A land access agreement and approval have been obtained to drill one core well, and approval is being sought for a second well at PEL 460 in the Western Hunter Valley. No fraccing is required. Drilling is expected to commence within three months. This licence has 1.1 Tcf of GIP.

In addition to its planned NSW exploration and appraisal activities, Dart Energy said it continues to progress discussions with industry leaders for the provision of small co/ tri-generation to medium scale power plants that will ultimately provide cleaner energy to local and regional communities from coal seam gas.

Dart said drilling in other licences in its NSW portfolio is not expected to commence until after drilling at PELs 458, 456 and 460 is complete. This includes any drilling on PEL 463 - about which there has been media speculation that Dart Energy intends to commence near-term drilling in the suburb of St Peters in Sydney.

Dart Energy's chief executive Australia, Robbert de Weijer, said "Exploration drilling in the St Peters area is not a priority for Dart Energy and, in fact, drilling operations in any part of this large 2,400 square kilometre licence area aren't expected to commence until at least mid-2012 and this is unlikely to be at St Peters."

Dart Energy's chief executive and managing director, Simon Potter, said "Santos' recent offer for Eastern Star Gas confirms Dart Energy's strategic view of both the technical and commercial worth of the NSW coal bed methane industry and its ability to contribute gas to the future overall NSW energy mix.

"For the next 12 to 18 months our focus in NSW is exploration and appraisal work on our most highly prospective licences to assess options for early development. This means working closely with rural and metropolitan communities to explain our activities and address concerns." (ASX: DTE)

Energy World Corporation
Shares in Energy World Corporation hit a new three year high of 74 cents on 27 July. (AX: EWC)

ASX 300

Ceramic Fuel Cells
Ceramic Fuel Cells has received its largest order for BlueGen units, an initial order for 100 from sanevo Lizenz-GmbH & Co. KG, and has signed a distribution agreement that will see sanevo market, sell, install and service BlueGen units in regions of Germany and Austria.

The 100 BlueGens will be delivered in the first year, with a target minimum order of 500 units for delivery in the second year and a target of 2,000 units over years three and four. If sanevo orders these agreed minimum numbers during 2012 to 2014, it has exclusive rights to distribute BlueGen to commercial and residential customers in the German States of Baden-Württemberg and Bavaria, and in Austria.

Ceramic Fuel Cells retains the right to sell BlueGens to utilities and energy service companies.

Ceramic Fuel Cells has now received orders for a total of 206 BlueGen units and up to 200 integrated mCHP products.

Based in Offenbach, near Frankfurt, sanevo has substantial experience in marketing and selling new technology power and heating products in Germany through more than 120 qualified sales partners.

Sanevo has partnered with SAG GmbH – one of Germany's largest independent service and system providers for electricity, gas, water and telecommunications products and networks – to provide installation and after sales service for BlueGen products. SAG has more than 8,300 staff across Germany and Europe.

In April 2011 sanevo and SAG each purchased a BlueGen unit for their own buildings.

BlueGen customers in Germany are eligible to receive a feed in tariff for the power exported to the grid.

Revenue continues to rise. June quarter receipts from customers were $1.2 million, 166 per cent up from last quarter. Full year receipts were $3.3 million, 105 per cent up on 2009-10. (ASX: CFU)

Galaxy Resources
Galaxy Resources has signed a technology licence agreement with K2 Energy Solutions Inc, an established US producer of lithium ion high energy density batteries.

K2 Energy will provide Galaxy with battery technology expertise, licensing and commercial support for the construction and operation of Galaxy's proposed Jiangsu battery manufacturing plant in China.

Galaxy Resources managing director, Iggy Tan, said "Ensuring that we will be able to complete construction and operation of the Jiangsu Lithium Carbonate plant in accordance with our revised timetable is our first priority, nonetheless this license agreement is important preparatory work for our proposed pipeline battery project. It is one of many important milestones that the Galaxy Board has set the Company before it approves the final battery project," said Mr Tan.

"Galaxy will have the unrestricted and unlimited use of specific K2 Energy lithium battery technologies, valuable for the E-bike and other battery markets. Subject to the Galaxy Board approving the Battery project, K2 Energy's superior and proven lithium battery technology coupled with Korean state-of-the-art automated plant equipment, will help Galaxy to leap frog research and development and produce world-class lithium ion batteries."

Galaxy said K2 Energy has a fast growing annual turnover based on its development of an innovative family of large format batteries and battery systems based on lithium iron phosphate technology. The company possesses intellectual property for high performance lithium iron phosphate batteries, with some of its technology applications pending patent approvals.

K2 Energy has experience in the pre-operational stage of battery manufacturing providing technology and licensing support to European Batteries Oy's lithium battery manufacturing facility in Varkaus, Finland.

K2 Energy's chief executive Dr Johnnie Stoker said "It is our belief that with our proven technology recipe and the Galaxy's selection of Korean battery processing plant equipment will produce world class lithium batteries for any application." (ASX: GXY)

Emerging Companies

Clean TeQ Holdings
Clean TeQ Holdings has won a $1.2 million contract to supply two water treatment plants for the processing of leachate and groundwater at two landfill sites. The project is due for completion in the first half of this financial year.

The contract is for the design, supply, installation and commissioning of water treatment plants to reduce ammonia and adjust pH of landfill leachate and groundwater to a quality that is suitable for disposal by trade waste discharge.

Clean TeQ said the removal of nutrients such as ammonia is an important step in the client's environmental strategy to reduce the nutrient load from the landfill sites.

Clean TeQ has a large suite of water treatment technologies that reduce many common pollutants such as ammonia, nitrate, salts, heavy metals and hydrocarbons found in leachates and groundwater.

"We are pleased to be working with a leading environmental services company in the provision of technology that provides a better overall outcome for our environment. This contract builds on our current project pipeline for the 2011-12 financial year," said chief executive, Peter Voigt. (ASX: CLQ)

Novarise Renewable Resources
Novarise director Qingyue Su has acquired 245,741 shares on market at prices between 21.5 cents and 23.5 cents. (ASX: NOE)

Micro Cap Companies

Aeris Environmental
Aeris Environmental says each of its business units is performing in line with budget. The company was cash flow positive in June and that continued in July and is forecast to continue in August.

Managing director David Fisher said sales of the Aeris Hygiene products and services are strong. The company's distributor in Asia, Trane Asia, has received a substantial order from a major client in the Philippines and forward orders are likely to grow the business in the coming year.

A commercial trial of the company's multi-enzyme technology in cleaning beer lines was undertaken at a Sydney hotel by a large global food and beverage supplier. The microbial analysis was done by the University of NSW.

The positive results of the independent trial validate the company's earlier excellent trial data and provide a basis for the near term commercial launch of the technology through
global suppliers to the beverage sector, said Mr Fisher.

"The company's environmentally friendly enzyme cleaning technology was compared with the standard aggressive chemical cleaning process used in many hotels. The Aeris Guard product removed approximately five times as much organic matter (microbes and organic contaminants) compared with the industry's leading conventional chemical approach."

The opportunity to apply antimicrobial and anti corrosion coating technology to industrial airconditioning coils was advanced with commitments from an OEM partner to start production in Asia this financial year.

The opportunity to treat air conditioning units in the automobile and mass transit sectors was enhanced by the incorporation of technology that can speed up the application process in a production line. The automotive industry now recognizes the need to manage microbial control at the point of manufacture and the market size potential is in excess of 80 million units per annum, he said. (ASX: AEI)

AnaeCo
AnaeCo says the expected increase in the cost of waste disposal to landfill by the carbon tax should benefit its technology.

Among the 500 biggest polluters expected to pay the carbon tax, about 190 or 38 per cent are in the waste disposal sector, mainly as landfill operators.

Although landfill facilities will not be liable for emissions from waste deposited before 1 July 2012, those emissions will count towards the threshold for calculating future liability for the tax.

"Generally a landfill that emits more than 25,000 tonnes of CO2 equivalent per annum will be liable for the $23 per tonne tax. Smaller landfills that emit more than 10,000 tonnes of CO2 equivalent per annum may also be liable if they are close to a larger landfill. The aim is to remove the means of avoiding the carbon tax by diverting waste to a nearby smaller landfill," said AnaeCo.

These higher costs should increase the relative attractiveness of investment in alternative means of disposal, such as AnaeCo's DiCOM System. The DiCOM System captures the methane generated during the anaerobic digestion phase and uses it to generate electricity to run the plant with the surplus available for export to the grid.

While there is considerable detail to be resolved, AnaeCo expects that the applicability of the carbon tax to landfills receiving municipal solid waste will increase its competitive advantage. (ASX: ANQ)

Carbon Conscious
Carbon Conscious has planted approximately 2 million trees in Australia during the 2011 winter program, with these expected to sequester over 400,000 tons of CO2-e over their life time.

Planting conditions have been excellent with significant rainfall across all planting regions, it said.

Another approximately 500,000 pinus radiata trees were planted on the east coast of the North Island of New Zealand in line with the company's New Zealand contractual arrangements. Planting was completed successfully with good conditions prevailing. (ASX: CCF)

Carnegie Wave Energy
Carnegie Wave Energy has appointed an engineer, John Leggate, CBE, as a non-executive director.

London-based Mr Leggate is an experienced oil and gas and venture capital industry executive. He worked for 27 years for BP, most recently as Group chief information officer and member of the BP Group Senior Leadership Team. He then joined in 2008 $4.5 billion venture capital firm VantagePoint Capital Partners, where he is a Venture Partner and Senior Advisor to their CleanTech Advisory Council.

At BP Mr Leggate was involved in the development of corporate policy on technology foresight, and corporate venturing during the dotcom era. He spent 20 years in exploration and production with a focus on the North Sea, Azerbaijan and the Caspian Region.

Mr Leggate's early career was in marine consultancy in Glasgow and then in the design and construction of coal, oil and nuclear power stations with what is now Scottish Power. (ASX: CWE)

EcoQuest
EcoQuest has launched its Asian market entry with an order for its Little Takas biodegradable nappy range and bamboo baby wipes from a leading pan-Asian retailer, Dairy Farm Group.

The Little Takas range will be sold in three different chains owned by the Group: Three Sixty, which is Hong Kong's largest organic and natural food store; Marketplace, a high end supermarket chain; and Wellcome, Hong Kong's longest established supermarket chain.

EcoQuest will drive a demonstration program at the Group's highest traffic stores and will participate in the Dairy Farm Group's baby expo.

EcoQuest said progress commercializing the Little Takas baby products in Australia has been steady, but not as fast as planned, "due largely to the difficult trading issues in the supermarket sector in Australia over the recent months. This has slowed our introduction path into the retail chains, but there have been no barriers, just a slowing of the introduction process."

Receipts from customers for the June quarter were $110,000, bringing full year receipts to $212,000. (ASX: ECQ)

Green Rock Energy
Green Rock Energy's partner in the EP 417 farm-in, New Standard Energy has been awarded a new Seven Lakes Special Prospecting Area (SPA) adjacent to EP417 in WA's Canning Basin. Under the terms of their agreement, Green Rock has the right to 40 per cent in any Exploration Permit taken up as a result of the SPA.

But Green Rock must contribute 40 per cent of all expenditures incurred in the Exploration Permit.

The two companies say Seven Lakes SPA is prospective for both conventional and unconventional hydrocarbon resources.

The SPA entitles New Standard Energy to carry out exploration work, subject to various approvals, over a six month period. It will have an exclusive right for an additional six months to exercise an option to apply for an Exploration Permit over the most prospective part of the acreage.

Green Rock recently downgraded the importance of direct use geothermal energy project in Perth for cooling and heating commercial buildings.

"Currently these projects face challenging economics. Firstly, the high upfront cost of drilling in a geothermal project requires high utilization of the produced geothermal energy to make the project economically attractive. This requires a consistent, continuous demand for geothermal energy rather than peaky, intermittent demand for cooling and heating typical in commercial building developments.

"Secondly, it will require a Government policy change such that direct use geothermal projects, which replace electricity, become eligible for Renewable Energy Certificates (RECs) under the Commonwealth Government's Mandatory Renewable Energy Target. This eligibility has not yet been achieved.

"Largely for these reasons Green Rock has so far been unable to secure joint venture partners for direct use projects who are prepared to share the cost and risk of drilling to prove the geothermal resource. This means that we remain some way from commercializing our Perth Metro permits.

"In particular it is highly uncertain that we will be able to meet the conditions of our funding agreement with the Commonwealth Government which require us to demonstrate funds to match the $7 million offered under the Geothermal Drilling Program for the project we had proposed at the University of Western Australia." (ASX: GRK)

Hot Rock
Hot Rock has announced its maiden geothermal resource in Chile - 7,400 PJ at the Calerias project, 100 kilometres south-east of Santiago. This is equivalent to 185 MWe generation potential and sufficient to power 250,000 local households.

The resource area remains open with strong indications for a significant extension.

Executive chairman Dr Mark Elliott said "Calerias is very prospective, being located near a volcanic centre providing heat. The project is also strategically located close to existing transmission grid inter-connection points with direct access to the large urban electricity market in Santiago and private customers such as the nearby El Teniente mine, the largest underground copper mine in the world."

"With a maiden resource now defined, we will expedite activities at Calerias with a view to start drilling by early 2012, upgrading the reservoir to a Measured Geothermal Resource suitable to commence a bankable feasibility study," he said.

The maiden resource at a second Chilean project at Longavi, 300 kilometres south of Santiago, is imminent.

Dr Elliott said Chile is one of the best regions in which to advance geothermal projects today. The country has some of the best volcanic geology suited for geothermal energy in the world, yet the sector is still in its infancy."

"Chile has the highest power costs in South America, and has suffered power shortages for several years, due to increasing energy demand and drought." (ASX: HRL)

Intec
Following a review of operations and strategies with assistance from the AFG Venture Group, Intec has decided to narrow its focus for the short to medium-term and concentrate on a core set of opportunities. These are intended to deliver key immediate economic outcomes and a solid platform for growth.

The five key areas for the remainder of the financial year are:

* Continue operation of the low-grade zinc mining project.

* Implementation of the SPL (spent pickle liquor) Recycling project, with development of subsequent SPL recycling projects when appropriate.

Intec's project partner, GB Galvanizing Service, is one of Victoria's largest galvanizing companies. Intec is working with GBG to deliver an SPL recycling plant at GBG's Dandenong site to recycle 1 million litres per year of SPL. The total project cost is around $2.85 million and EPA Victoria is contributing $780,000 to GBG from the HazWaste fund.

The project will be in three stages: Phase 1: Pilot plant trials; Phase 2: Semi-commercial demonstration plant trials; Phase 3: Commercial plant construction and operation.

* Investigation and the decision concerning the Burnie rare earth recycling opportunity.

* Pursuit of the Middle Eastern zinc/lead project implementation contract, and if successful, the delivery on the resulting engineering contract.

* Pursuit of opportunities for the Intec Gold Process via pipeline development and paid testwork, particularly for arsenic-bearing gold feedstocks.

The board said its strategy will remain flexible, and include considering corporate opportunities, and will be adjusted based on near-term outcomes, market conditions and forward expectations. (ASX: INL)

Intermoco
Intermoco directors withdrew the resolution concerning a share consolidation from the General Meeting of shareholders held on 29 July. Resolution 2 concerning ratification of an issue of securities was passed.

The directors said there was a general view that a consolidation should occur, however those who did not support the consolidation were of the view that this was not the appropriate time.

Chairman, John Evans said the company's Embedded Networks business has a strong pipeline, with as many as 35 new opportunities currently under discussion at various stages.

Chief executive, Ian Kiddle, said "The last quarter of Financial year 2011 shows an operational negative cash flow result of $363,000 predominately brought about by two factors, namely less than expected product sales and cash flow delays in the implementation of our Embedded Network contracts.

"With the growth in our Embedded Networks we have experienced cash flow delays due to the time in takes from implementation to the banking of the revenues from the sale of services. As previously announced to the market our product sales have been less than originally projected due to difficulties we have experienced in the delivery of products from our suppliers.

"I am extremely pleased that we now we have nine (9) embedded networks in operation, another contract signed waiting on implementation and another eight contracts we are currently negotiating which we expect to result in contracts.

"In addition the pipeline remains very robust and the take up of opportunities remains extremely high." (ASX: INT)

Island Sky
Island Sky Australia received applications for 27,777,921 ordinary shares totaling $138,886.61 under its rights issue. The shortfall was 115,073,077 shares totaling $575,365.39.

The rights issue sought to raise $714,255 and was fully underwritten. (ASX: ISK)

KUTh Energy
The securities of KUTh Energy are in a trading halt prior to an announcement about a capital raising. The company expects the shares to recommence on 3 August if not before. (ASX: KEN)

Metgasco
Metgasco said its has achieved coal seam gas flow rates well above expectation.

Gas production from its Harrier P01 pilot well has achieved a rate of 230,000 scfd (standard cubic feet per day) and this is expected to increase significantly once the well is fully dewatered.

"This early 230,000 scfd gas production rate exceeds the peak gas production rate from the Company's lead pilot well, Corella P11, and provides further evidence that Metgasco's improvements in CSG well design and approach to well completion have resulted in improved field productivity," said the company.

"Gas production rates are expected to increase from 230,000 scfd as dewatering continues and bottom hole pressure is reduced."

"The production rates to date from Harrier P01 are very encouraging and exceed our reservoir model predictions for gas production at this stage of the dewatering process from a well of this type and inseam length," it said.

Metgasco's lead CSG production well, Corella P11 has been producing gas for more than three years. The peak gas production rate has climbed steadily over this period to over 210,000 scfd.

The Corella P18 pilot well is also performing above expectations. This well was expected to produce at around 70,000 scfd but has produced at more than 100,000 scfd.

Managing director, Peter Henderson, said "These results are very encouraging. Metgasco is continually improving our well design and completion techniques to unlock production performance. This experience is very similar to that of other coal seam gas operators. The Harrier wells are a significant step forward in well technology. Gas production rates can be expected to improve as the Company gets more experience with the technical characteristics of the gas resource and drilling and production practices are optimised." (ASX: MEL)

Nanosonics
Nanosonics is targeting October for the release of the upgraded International 220V version of its Trophon EPR sterilizer. This will improve production economies of scale and give the company access for full commercial release to European and Asia/ Pacific markets. it said.

The company has shipped a significant proportion of the $2.4 million initial order received by GE Healthcare, and early payment has been received for the shipments that have been delivered. (ASX: NAN)

Orbital Corporation
Orbital Corporation expects to make a statutory profit after tax of $1.9 million for 2010-11.

Abnormal items after tax amount to $1.7 million. Excluding these, the underlying operating profit after tax is expected to be around $0.2 million. compared with a loss of $2.6 million in 2009-10.

Chief executive Terry Stinson said "We are pleased to be able to announce a profit for the full year and more importantly, as targeted at the beginning of the year, a positive underlying operating result. We have expanded and rationalized Orbital's LPG aftermarket business and that, together with the launch of the EcoLPi Falcon, will establish a stronger and growing alternative fuel business."

Orbital said the third phase of the Changan Automotive Project has delivered best-in-class results.

Chongqing Changan, the second largest domestic passenger car maker in China, engaged Orbital to support the integration of its FlexDITM into a new engine concept capable of meeting Chinese Fuel Consumption Regulations Stage III that call for approximately 20 per cent fuel consumption reduction in 2012.

Changan's new Intelligent Compound Combustion System (ICCS) engine using the Orbital FlexDITM system has now been integrated into a demonstrator vehicle.

Changan's in-house testing in June showed that the fuel consumption over the European drive cycle is reduced by up to 20 per cent over the baseline engine fitted to the same vehicle model.

"The ICCS vehicle demonstrator also achieves a fuel consumption reduction of over 40 per cent at idle, and the improved performance from the engine was also evident in vehicle assessments," said Orbital.

Mr Stinson said the fuel savings are benchmark in the industry.

Dir Zhan, Supervisor of the ICCS project, and Vice Director of Changan Auto Research
Institute, said "Changan plans for Orbital to continue to be a valued services and technology partner as we move forward." (ASX: OEC)

Orocobre
Orocobre has appointed Bruce Rose as vice president, Corporate Development. Mr Rose will have overall responsibility for Orocobre's corporate development initiatives and communications with an emphasis on North American investor relations. He will be based in Vancouver, British Columbia.

Mr Rose has extensive experience in these areas within the resources and transportation sectors, said the company. (ASX: ORE)

Papyrus Australia
Papyrus Australia and the Egyptian Banana Fibre Company of Egypt have established their 50-50 incorporated joint venture company known as Papyrus Egypt.

Papyrus Egypt will develop a factory and utilize Papyrus Australia's technology to manufacture banana fibre products in Egypt for sale in Egypt and Europe, as announced in June.

The Egyptian Banana Fibre Company will fund the capital and initial operating requirements of Papyrus Egypt.

Papyrus Egypt is obligated to procure patented machinery, equipment and know-how from Papyrus Australia to the value of $2 million to operate the factory and conduct business.

Papyrus Australia has commissioned the fabrication of two base assemblies for banana veneering units (BVU's) which are now ready for "acceptance testing" and after installation of blade assemblies and control systems are expected to be delivered by 31 December. (ASX: PPY)

Petratherm
Petratherm has completed a $2.289 million capital raising through the placement of 18.3 million new shares at 12.5 cents per share, primarily for development works at the company's Paralana geothermal project in South Australia.

The funds were raised from sophisticated and professional investors, including substantial shareholder Australian Ethical Investments Pty Ltd. The placement was managed by Patersons Securities.

Petratherm will also offer a share purchase plan with shareholders able to invest up to $15,000. The issue price will also be 12.5 cents. (ASX: PTR)

Phoslock Water Solutions
Phoslock Water Solutions had net operating cash flow of $148,000 for the June quarter, but the company said this was due to the build up of working capital and is not reflective of the "solid operating profit for the period".

The build up of working capital was timing related and driven by three factors: robust June quarter revenue of $890,000 from sales and government grants; the majority of June sales revenue was not received during the June quarter; and a material build up of inventory in the quarter, with cash expenditure of $279,000, in anticipation of strong end of period sales that eventuated.

Phoslock said it remains in a solid financial position with $510,000 in cash and no debt. It has net current assets, in terms of cash, inventory and receivables, of $2.2 million.

At around 10 cents Phoslock's share price remains close to its 12 month high.

Phoslock said its European Operations move from strength to strength with a record number of orders, over $800,000, received in the June quarter. This momentum has continued with orders of $150,000 in July.

Sales to the aquaculture sector in Australia and parts of Asia continued to rise during the quarter. In Australia, 10 aquaculture farms are using Phoslock as part of their water quality management. The enquiry rate from aquaculture companies in Australia and overseas continues to be high, said the company. (ASX: PHK)

Po Valley Energy
Po Valley Energy has completed its first year of production at the Sillaro gas field in northern Italy, and said gas production for the June quarter was steady at 7.7 million cubic metres (273 million cubic feet) on higher average prices.

Chief executive, Giovanni Catalano, said "The first year of production at Sillaro achieved 33.4 million cubic metres (1.2 billion cubic feet), with the June quarter steady at 7.4 million cubic metres (262 million cubic feet). Sillaro averaged 84,430 cubic metres/day (3 million cubic feet/day) from its two production wells."

"Importantly, data from our planned three-day shutdown at Sillaro in May for pressure readings confirmed Sillaro's previously certified Proven (1P) reserves of 7.5 billion cubic feet and Proven plus Probable (2P) of 8.2 billion cubic feet," he said.

The Company has executed all contracts and service agreements to drill a new well at its Vitalba gas field, east of Milan, with the spud expected around the end of September and production in the fourth quarter. The current Vitalba well within the Cascina Castello license continued to produce at a limited rate.

During the June quarter, Po Valley appointed Moyes & Co, a global energy advisor with offices in the US and UK, to facilitate the farm-out process of a number of the company's assets.

Po Valley's revenue for the quarter was 2.1m ($2.8 million), with the company's earnings (EBITDA) margin continuing to improve. "We expect to report continued positive EBITDA and a net profit for the half year", said Mr Catalano.

Hunter Hall Investment Management has increased its interest in Po Valley Energy from 14.3 to 15.4 per cent. (ASX: PVE)

Style
Style said June quarter receipts from customers was $3.2 million versus $1.5 million in the previous quarter. Quarter 4 included receipts from sales generated in the latter part of Quarter 3.

As Style sells its products mainly in US$ and Euros, the appreciation of the Australian dollar has resulted in lower reported revenue. However, "the impact on EBITDA profitability is minimal given the natural hedge with the manufacturing cost base in Chinese RMB," it said.

"Operational cash flow in Quarter 4 reflects the impact of the Chinese manufacturing joint venture as announced to the market on 9th March 2011. With the completion of the Joint Venture, Style repaid all its Chinese bank debt and Chinese suppliers' debt. This has significantly reduce Style's total liabilities," it said.

Style had cash at 30 June of only $117,000, due it said "to the adverse phasing of creditors and debtors. As indicated in the June market update, Style is finalizing a loan facility of up to $1 million for trade financing and general working capital purposes." (ASX: SYP)

SWW Energy
Shares in SWW Energy have recommenced trading and the company has filed its annual reports for 2009 and 2010.

The 2010 report shows net assets of minus $1.8 million.

Following a recapitalization, the company has 389.6 million shares on issue and 80 million unquoted options exercisable at 1 cent by 31 December 2014.

SWW's business plan is to commercialize the Thermoldepolymerisation (TDP) technology licenced from White Mountain. The technology is a depolymerisation process that converts waste oils into a renewable fuel and biofuel for use in the agriculture and transport industries.

The license agreement with White Mountain also includes the Shallow Water Reactor Process, the Frac Water Technology, and the Solar Cracking Technology.

"The TDP Thermodepolymerisation Technology will underpin the continued operations of the Company as SWW undertakes a restructured business plan designed to mitigate the need for extensive capital investments whilst maintaining the same business operations," it said.

"On 1 December 2010, White Mountain and the Company signed an agreement allowing SWW the right to access the excess capacity at a renewable fuel plant located in Nevada (North Las Vegas) operated by experts engaged by White Mountain for the production of biofuel using feedstock supplied by SWW.

"The White Mountain plant in Nevada currently has total capacity of 240,000 litres per month, a portion of which can be secured by SWW in the production of the biofuel and biodiesel from feed stocks supplied by SWW."

SWW will pay White Mountain a toll processing fee and licensing fee for every litre of biodiesel produced equal to US$0.86 and US$0.054 respectively.

The company said access to the renewable fuel plant will allow it to reduce the need to raise capital for construction and operation of its own plant.

SWW said it will evaluate other projects and acquisitions across a range of sectors including metals and mining; energy and energy related investments including oil and gas, coal bed methane, coal and uranium; and renewable energy and fuels including biofuel, biodiesel and ethanol.

The interest in oil, coal and uranium indicate a low environmental commitment and Eco Investor will monitor any developments and cease coverage if appropriate. (ASX: SWW)

WestSide Corporation
WestSide Corporation generated $1.3 million in gross sales during the June quarter – up 5 per cent on the previous quarter. The upward trend is expected to continue as production from new wells starts to lift field output, it said.

Gross production from Meridian SeamGas was 733,774 GJ, up 7.4 per cent on the previous quarter.

WestSide has upgraded its independently-certified 2P gas reserves at its Meridian SeamGas operation to 433 PJ, a 93 per cent increase of 209 PJ from the updated evaluation of acquisition reserves announced in April. The net total to WestSide is 221 PJ.

Total 3P reserves have been increased by 18.5 per cent or 80 PJ to 513 PJ.

But total 1P reserves have been adjusted down to 7 PJ.

The company is planning a second stage of the Meridian SeamGas reserves expansion program in 2012 to increase 1P reserves and expand gross 2P reserves by up to a further 200 PJ.

Chief executive officer Dr Julie Beeby said the additional commercial reserves provide a strong platform for growth. (ASX: WCL)

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