Eco Investor Update
A Weekly News Update for Environmental Investors
October 2010 - No 4
Origin's shares have traded above $16 for the first time in five months. (ASX: ORG)
Hastings Diversified Utilities
HDF's security price has been trending upwards since April 2009 when it hit a low of 26 cents in March 2009. The are now at around $1.40. (ASX: HDF)
Forest Enterprises Australia
The net loss for the seven months was $51.9 million. This includes a $37.8 million charge for impairment of non-current assets, although this is not explained.
At 28 February the company had total assets of $576.3 million, total liabilities of $296.7 million, and net assets of $279.5 million.
At 14 April, the company owed $223.9 million under a secured debenture and $3 million for employee entitlements. At book values this left an estimated $219.4 million for unsecured creditors, although the realizable value is unknown.
Unsecured creditors are owed $22.4 million, there is a 2008 Scheme Fraud Claim of $1.7 million, and contingent liabilities (property lease liabilities and unearned revenue) of $108.5 million, plus the cost of the administration.
BRI Ferrier says the company became insolvent between September 2009 to March 2010. Ending the administration and returning the company to its directors is unrealistic as it would still be insolvent. Although there is no acceptable deed of company arrangement (DOCA) proposal at present there is time for one to be formulated.
A liquidation scenario would allow for a more thorough review of the business but an immediate liquidation could "severely limit and possibly prevent any reconstruction of the Company and MISs".
"Within the time constraints imposed by the Act, we have not identified any material recoveries likely to be made in a liquidation. Further investigation by a Liquidator may reveal additional recoverable assets nothing identified to date," it says.
The administrator says it is working on forestry Scheme reconstruction proposals for the growers. Four potential purchasers have been identified, of which two are advanced and one has been put to the banks.
The latter proposal provides for the forestry Schemes from 1994 to 1998 to be fast track harvested, and the Schemes from 1999 to 2009 to be pooled. It would need a significant equity contribution. The result would be a new and simplified management structure, a reorganised corporate structure, and it could resolve litigation now afoot.
The proposal would "maximize returns to all stakeholders by a Going Concern realisation as opposed to Liquidation".
The next meeting of creditors for Forest Enterprises Australia will be on or before 23 November.
Micro Cap Companies
Australian Renewable Fuels
The funds are to repay debt and for working capital.
The company has biodiesel plants in WA and SA and says it can benefit from recent substantive positive changes in the sector including Government support for the industry since the Federal election and more support a State level.
The company said it also has more options for feedstocks, having tested a variety including imported non-food grade commodities.
It is also in discussion with an international group that could become a supplier of feedstock, a customer for biodiesel and an equity or debt investor for up to $3 million in the company. (ASX: ARF)
Carbon Conscious did not say
how much the deal is worth, but it involves planting 26,000 mallee eucalypts
on marginal WA farm land that will also assist with salinity and erosion.
Carnegie Wave Energy
Carnegie awarded the vessel charter contract to local firm Total AMS Pty Ltd, an experienced offshore equipment, mooring and diving service provider. The installation barge will be fitted out with a 50 tonne crawler crane, air compressor, generator and dive operation support equipment, and provide a working platform for the CETO 3 installation equipment and system components.
Managing director, Dr Michael Ottaviano, said Carnegie and TAMS have an established working relationship with TAMS having been involved in deployment and retrieval activities at Carnegie's Fremantle Wave Energy Facility as well as the CETO 3 foundation installation. The offshore deployment and testing will be carried this year to demonstrate the functional performance of the commercial scale CETO 3 design. (ASX: CWE)
The company will issue no more than 27.7 million shares or 30 per cent of its pre-offer issued capital. (ASX: ECQ)
Two directors have also shown their faith in the shares. Executive chairman Greg Solomon has directly and indirectly acquired 600,000 shares at 5 cents per share for a total of $30,000. Director Douglas Solomon indirectly acquired 300,000 shares at 5 cents each for a total of $15,000.
Substantial shareholder Noble Energy acquired $15,000 worth of shares in the share purchase plan but has seen it interest fall from 21.4 to 16.6 per cent. (ASX: EDE)
European Gas is to have its coal seam gas and shale gas assets in France reviewed by MHA, which will provide an independent estimate of its resources, an update on reserves status, and recommendations for exploration and testing. (ASX: EPG)
Green Rock Energy
The new tenements, Calerias and Tuyatjo 4, will give HRL five tenements covering 2,500 square kilometres of what it says is highly prospective ground.
Chairman Dr Mark Elliott said
"We are excited to be progressively growing our exploration base
in a country that is rich in untapped geothermal energy resources, a government
which supports renewable energy, politically very stable, with an established
mining sector, and with a real need for domestic energy supply."
The Calerias concession is immediately south east of HRL's Galo concession near Santiago. The geochemistry is neutral chloride surface hot springs in the Calerias and Galo concessions with discharge temperatures ranging up to 65oC.
The Tuyatjo 4 concession is in the Antofagasta region in northern Chile and covers 400 square kilometres. The area has high chloride surface hot springs with high surface discharge rates of up to 60 litres per second.
HRL said the other eight concessions awaiting grant could be processed before year-end. (ASX: HRL)
KUTh said it is pleased with the results of the independent assessment of the northern part of its tenements on the island of Efate, Vanuatu. The report was by Sinclair Knight Merz of Auckland.
KUTh said it is an important step in developing its strategy of replacing high cost diesel power generation with indigenous geothermal resources in the Pacific region.
Meanwhile four KUTh directors have taken shares in lieu of directors fees, and chairman Bruce McKay has taken 1 million options as remuneration. (ASX: KEN)
The Motonic components will
be part of the Liquid LPG systems that Orbital will supply to Ford Australia
and other customers.
Orbital Autogas Systems managing director, Tony Fitzgerald, said "The combination of Orbital's local assembly and engineering expertise, combined with Motonic's proven quality and high volume manufacturing track record sets a new standard for LPG system supply in Australia."
"Our relationship with Motonic has matured nicely. We are now jointly prospecting for new LPG & CNG system supply opportunities in Asia." (ASX: OEC)
The results of the tests are
not different from those already reported previously. "However, it
now appears likely that the test results reflect the status of the well
itself, rather than the quality of the intersected target reservoir rocks,"
The 4,025 metre Salamander-1 well has a most likely transmissivity (capacity to flow, also known as Darcy meters or Dm or as kh) value of 6.7 Dm and this would meet the requirements for a Demonstration Plant that could meet all the power requirements for the town of Penola.
The interpreted petrophysical logs have also indicated that the transmissivity could be as high as 13.5 Dm, 30 per cent higher than originally targeted for Salamander-1, it said. The bottom hole geothermal temperature was measured at 171.4°C, exceeding the projected target temperature by more than 10°C.
Panax said the issues it encountered at the Salamander-1 well "are not dissimilar to the problems experienced by the coal bed methane industry in the 1980s and 1990s. Many of the original pioneers in this field used standard petroleum drilling methods, but did not succeed in producing economic flows. After spending hundreds of millions of dollars, many of these pioneering companies gave up. History shows that these "well completion problems" were resolved by adopting new well completion techniques," it said.
Panax has now engaged experienced reservoir engineers who were instrumental in resolving the CBM well completion problems in Queensland and who played a major role in making the CBM industry a multi-billion industry.
The focus will now be on a detailed examination of the Salamander-1 drilling records, including drill mud logs and the reservoir tests, as a basis for developing an optimised well completion program.
Discussions are continuing with a number of parties who have expressed interest in partnering with Panax on the Penola Project, said managing director, Bertus de Graaf. (ASX: PAX)
He retired from his most recent position as a partner and Division Head of the Adelaide Assurance and Business Advisory Division of Ernst & Young in July 2010, but remains chairman of Ernst & Young South Australia. He is also chair of the Bedford Group, Independent Gaming Corporation and Leaders Institute of South Australia.
"The Papyrus technology has outstanding opportunities worldwide and I'm looking forward to helping the company in its international commercialisation strategy," he said.
The commercialisation strategy is to license the technology to suitable entities worldwide that will establish banana veneer and banana fibre production factories in locations where banana is grown. (ASX: PPY)
Under the DOCA, creditors will receive about 5 cents in the dollar, and rights to a Creditors Trust. All other assets will be returned to the company, a recapitalization proposal put to shareholders, and new directors appointed. (ASX: SWW)
Cruelty Free Super
Cruelty Free Super has been launched by Melbourne based Ethical Money. Director Lee Coates said there are hundreds of thousands of Australians who would be horrified if they knew that their retirement savings were being invested in companies involved in animal testing, live animal trade and intensive farming.
"No other superfund exists to truly cater for people who want to avoid investing in companies whose activities exploit animals. Now they have a choice," he said.
The main thrust of the Fund is to avoid animal exploitation, but the cruelty free; principles also apply to people and the planet.
"This Fund will not invest in companies which are involved in animal testing, intensive farming, polluting, armaments, deforestation, climate change, live exports, tobacco, human rights abuse, gambling or genetic modification," said Mr Coates.
In Australia that includes Cochlear (animal testing), BHP and Rio Tinto (human rights evidence), and Woolworths (sale of meat and dairy products and links to environmentally damaging paper pulp suppliers), among others.
Animal protection groups such
as Animals Australia and Stop Live Exports have welcomed the creation
of the fund.
Credit Suisse has been selected to manage the Fund's investments. Cruelty Free Super will invest in listed shares and interest bearing securities, other investment funds, cash and property, all of which must pass through the cruelty free filter.
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