Eco Investor Update

A Weekly News Update for Environmental Investors

17 January 2011 - No 16

ASX 100

DUET's 25.9 per cent subsidiary WA Network Holdings may have its underlying credit rating downgraded by Moody's, which has placed it on a credit review. Its current rating is Baa2.

Moody's said the pressure on the rating is due to uncertainty about WA Network's tariff reset, the limited cushion in its current rating, uncertainty about its future share structure with Prime Infrastructure planning to sell its 74 per cent interest, and its reliance on dividend reinvestment to maintain its rating. (ASX: DUE)

Origin Energy
Origin Energy has extended its solar offering to customers, and appointed a new chief executive of majority subsidiary Contact Energy.

The current managing director of Contact, David Baldwin, will take the role of chief development officer at Origin Energy.

Dennis Barnes, Origin's current general manager Energy Risk Management, will succeed Mr Baldwin as Contact's chief executive officer. Mr Barnes joined Origin in 1998 and has managed Origin's significant portfolio of wholesale market activities.

Origin managing director Grant King said Mr Baldwin "successfully led Contact through a period of substantial change. Key initiatives such as the Ahuroa gas storage facility and the Stratford Peaking Power Station came to fruition giving Contact the flexibility to better respond to changing market conditions. The Te Huka power station on the Tauhara geothermal resource was constructed and brought into operation and the 250 megawatt Tauhara 2 project was consented. The Te Mihi geothermal project was also consented and is progressing toward readiness for construction."

Mr Baldwin will continue as a director of Contact and also have oversight of its geothermal development program.

Origin and Service Stream have concluded a two year agreement extending their activities in residential solar energy systems, which they see as a significant growth market.

Origin Energy will provide Service Stream with an expected 48,000 residential solar installations over the period while Service Stream will complete the installations. It will also continue to provide telemarketing sales resources to complement Origin Energy's own marketing and sales program.

Origin said the value of the two year contract is likely to be over $300 million, although investors should note that installation volumes are only targets and are based on the assumption that state and federal governments will continue to support demand for residential solar systems.

Meanwhile, Origin's liquefied natural gas competitor Santos and its partners have given the final approval to their $16 billion Gladstone LNG (GLNG) project. Construction will commence this year.

GLNG partners, Santos, PETRONAS, Total and KOGAS have sanctioned GLNG to develop the gas, construct the 420 kilometre pipeline from Roma to Gladstone and the LNG plant on Curtis Island, and facilitate the production and off-take of LNG.

Qld premier Anna Bligh said "This project worth about $120 billion in exports over 20 years, and others like it, will inject billions into the Queensland and regional economies."

With projects now underway by two of its competitors, the BG Group and Santos consortia, the onus is on Origin to get also make its joint venture project with ConocoPhillips underway.

Origin has contributed $1 million to the Qld Premier's Drought Relief Fund, and is providing helicopter services and helping with the initial clean-up to communities affected by the floods in the Western Downs area. (ASX: ORG)

ASX 200

Hastings Diversified Utilities Fund
Hastings Diversified Utilities Fund expects to benefit from the final investment decision on the GLNG 2-train LNG project by Santos and its partners. The final investment decision is the material precedent condition for the gas transportation agreement between HDF's subsidiary Epic Energy and Santos announced on 25 October last year, and materially increases the likelihood of the gas transportation agreement proceeding, said Hastings Funds Management Ltd, the responsible entity for HDF.

Epic Energy is confident that financier consent will be received as required, and the modest level of capital expenditure required is a low-risk component of the agreement.

The gas transportation agreement is a 15 year contract to transport 147 terajoules per day for Santos on the South West Queensland Pipeline (SWQP) from Moomba east to Wallumbilla. Santos has the option to increase its capacity on the SWQP through non-firm transportation.

The capital cost required to convert the SWQP into a bi-directional pipeline will be funded from HDF's cash reserves.

HDF chief operating officer Colin Atkin said "This development is a great outcome for HDF's security holders as this agreement has the potential to underpin further earnings growth from 2015 onwards and substantially improve the financial flexibility of Epic over the medium term. This agreement is illustrative of the high value opportunities that Hastings expects will continue to be made available to HDF through its investment in the gas transmission network in Australia."

Hastings Funds Management said that following the outperformance of HDF relative to its benchmark index, a performance fee of $22.375 million excluding GST is payable to Hastings by HDF for the six month period ended 31 December 2010.

During the financial year ending 31 December 2010 HDF's market capitalisation rose to $876 million from $541 million and security holders received total distributions of $60 million.

An investment in HDF since inception and since the last performance fee payment has provided security holders with a strong financial return based on comparable investments, it said. A review of HDF's performance by Mercer shows the total return to security holders who participated in all rights and reinvestment opportunities was 9.3 per cent per annum since inception and 16.66 per cent per annum since a performance fee last became payable as at 31 December 2008.

This compares favourably to the ASX/ S&P 200 Industrials Accumulation Index which achieved 5.76 per cent since inception and 14.89 per cent since 31 December 2008; as well as the ASX/S&P 300 Utilities Accumulation Index which achieved 7.23 per cent and 8.89 per cent respectively. (ASX: HDF)

Infigen Energy
Infigen Energy and partner Suntech Power Holdings have received conditional planning approval from the NSW Department of Planning for their proposed Nyngan Solar Farm.

The project is 150 megawatts of solar capacity across three sites in NSW including Nyngan. The consortium is one of four short-listed solar photovoltaic proposals being assessed for Commonwealth Government funding under the Solar Flagships Program.

The developments remains conditional on several significant project milestones including the consortium being successful under Round 1 of the Solar Flagships Program and the receipt of Commonwealth and NSW Government funding for the projects.

The successful solar photovoltaic bidder under Round 1 of the Program is expected in mid-2011. (ASX: IFN)

Emerging Companies

Novarise Renewable Resources International
Plastics recycler Novarise received a query from the ASX why its share price rose over a few days from 21 cents to a high of 29 cents together with an increase in volume.

Novarise said it was not aware of any unreleased price sensitive information but said it is exploring the feasibility of raising capital through Taiwan Depository Receipts (TDRs) on the Taiwan Stock Exchange. However, the matter is still at the exploratory stage and no decision has been finalised. (ASX: NOE)

Micro Cap Companies

Algae.Tec listed on the ASX on 13 January and became the first algae company to list on a main board stock exchange in the world, said chief executive Roger Stroud.

The 20 cent shares have started well and are trading at between 22 and 24 cents.

The company offered 37.5 million shares to raise $7.5 million and listed 28.34 million shares for $5.66 million.

The company has 540 shareholders and 247.9 million shares on issue, of which 215 million are restricted for two years. It also has 49.5 million unlisted options.

Algae.Tec is commercializing an efficient algae growth and harvesting system for producing bio diesel and bio jet fuel from carbon dioxide emissions from power stations. The first demonstration plant is planned for The Manildra Group's Nowra facility in NSW.

The company's McConchie-Stroud System uses low-maintenance technologies and an efficient solar system to produce algae in one-tenth of the land area of the current pond method. The system am also deliver the highest yield of algae per hectare, and solves the problem of food-producing land being turned over for bio fuel production.

The photo-bioreactors at the heart of the technology are designed to generate four revenue streams: oils which can be refined into biodiesel; carbohydrates (sugars) that can be used in the production of ethanol; proteins that can be used as feedstock for farm animals; and protein and carbohydrate biomass that can be combined to produce jet fuel. (ASX: AEB)

Australian Renewable Fuels
Australian Renewable Fuels is well positioned for 2011 with recent developments set to allow the company's assets to generate an acceptable return on investment, said managing director, Tom Engelsman.

These developments include the successful conversion of a series of trials and product tests, mainly for the transport and mining industry.

"This has resulted in very positive supply arrangements with majors such as Wesfarmers, Caltex, IMX Resources, and many other environmentally sensitive services such as SeaLink Ferries in South Australia," he said, and has created a solid base for the use of the company's fully certified biodiesel.

Other developments have been the raising of approximately $6 million before costs, allowing the company to retire all longer term debt facilities, and giving it funds to cover working capital to raise production levels.

There was also the initial implementation of agreements for the supply of "a very competitive feed stock supply line, based on an initial three year take or pay export model for the biodiesel. The agreement is based on a minimum of 30 million litres per year, and will have a positive EBITDA impact (based on the full volume) of in excess of $ 6 million per year."

Participation in a Federal anti-dumping action against the imported biodiesel has eliminated the substantial importation of improperly subsidized product, while Federal Government rulings for the excise on biodiesel has created a 19.2 cents per litre advantage on the excise on
mineral diesel, he said. (ASX: ARW)

BluGlass has commissioned Rainbow Optoelectronics Materials Shanghai Co. Ltd to provide device fabrication and processing services to create a nitride solar cell prototype.

BluGlass said the arrangement enables it to outsource the processing of its Indium Gallium Nitride (InGaN) solar cell designs to an expert group-III nitride company without having to invest in additional capital equipment during the research phase.

BluGlass non executive director Dr Alan Li is the general manager of Rainbow, a semiconductor device manufacturing company that provides nitride semiconductors, primarily LED displays, to over 25 countries including the USA, Japan, Korea and UK.

BluGlass subsidiary BluSolar is hoping to develop InGaN solar cells, that are long lasting, relatively inexpensive and the most efficient ever created. (ASX: BLG)

Carbon Conscious
Carbon Conscious has renegotiated its convertible note facilities with three lenders.

It has repaid the $1 million plus interest owing to Augustus Minerals.

It has repaid clients of Alto Capital $500,000 plus accrued interest. The terms of the convertible notes have been changed so the company can no longer redraw this facility. The financing party retains the right to subscribe for convertible notes at the end of the funding term and exercise the conversion option.

The notes can be converted to shares at the lower of a 10 per cent discount to the volume weighted average price over the previous 20 days or 10 cents on 30 June 2011. The
conversion option is subject to shareholder approval but this is not given there is a penalty of 20 per cent of the face value of the notes.

Carbon Conscious has repaid $1 million plus interest to Broadacre Asset Management. CCF retains the right to draw down on the convertible note, and the note holder retains the right to subscribe for convertible notes at the end of the term. The conversion option is at the lower of a 10 per cent discount to the volume average weighted price of the shares over the previous 20 days or 15 cents on 30 June 2011. The conversion option is subject to shareholder approval but there is no penalty if this is not given.

Chief executive Peter Balsarini said the renegotiation of the convertible notes provides interest savings, clarifies the company's capital structure, and provides a platform for future undertakings. (ASX: CCF)

Carbon Conscious and CO2 Group
Carbon sink companies Carbon Conscious and CO2 Group should receive a boost with the Federal Government releasing draft legislation and methodology guidelines for the establishment of the Carbon Farming Initiative - a carbon offsets scheme that will provide new economic opportunities for farmers, forest growers and landholders and help reduce carbon pollution.

The Minister for Climate Change and Energy Efficiency, Greg Combet, said "While there is still work to be done, the government is making these early drafts available now to give stakeholders more information on how the proposals described in the consultation paper released last November would work in practice."

"Potential participants in the scheme will be able to gauge how they might get involved and help to identify any gaps or unintended impacts of the legislation.

"They will also be able to see the type of information that independent experts on the Domestic Offsets Integrity Committee (DOIC) will be assessing in draft methodologies and the evidence DOIC will require to recommend a methodology to the government for approval."

The Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig, said the Carbon Farming Initiative will allow for abatement from eligible activities undertaken by farmers. "It is a positive way for forest growers and landholders to be involved in the carbon market and potentially open an additional income stream."

Additional legislative provisions for offsets projects on Indigenous lands and projects under the joint implementation mechanism of the Kyoto Protocol will be released early in 2011 for consultation. (ASX: CCF and COZ)

Carnegie Wave Energy
Carnegie Wave Energy raised approximately $6.2 million from its share purchase plan, which was oversubscribed. The offer had been underwritten to $5 million by Blackswan Equities.

The funds will be used to pursue project development opportunities, technology development and to fund working capital beyond the current commercial scale CETO unit deployment and testing, the results of which are due in Quarter 1, 2011, said managing director, Dr Michael Ottaviano.

Carnegie has also signed the formal funding agreement with the Irish Government's Sustainable Energy Association (SEAI) for a 150,000 project to evaluate potential CETO wave energy sites in Ireland and develop a site specific conceptual design.

The project is funded 50 per cent each by SEAI and Carnegie and is the first phase of a potential 5 megawatt commercial demonstration project. The project will be managed through Carnegie's Irish subsidiary, CETO Wave Energy Ireland Limited.

The project has commenced, and Ireland-based engineering specialist RPS Consulting Engineers is undertaking the study. RPS Consulting Engineers, formerly Kirk McClure Morton, is an experienced provider of engineering and environmental services to the marine construction and the renewable sector and has worked on a number of wave and tidal development projects in Europe and North America. (ASX: CWE)

Eden Energy
Eden Energy has seen its share price double since Christmas from around 4 to 8 cents after hitting a peak of 11 cents, which executive chairman, Greg Solomon, says is likely due to a number of positive developments.

The story of most interest for the share price, he says, has been the Carbon Pyrolysis Project - developing a process to produce hydrogen and solid carbon from natural gas without producing carbon dioxide as a byproduct. This process produces both carbon fibre and carbon nanotubes, and late last year the company achieved a step forward towards their commercial production.

"Carbon fibres are long sticks of very, very fine, very small particles of carbon, but the carbon nanotubes in particular are shaped at an atomic level something like chicken wire, but they're extraordinarily small; down to the size of maybe 100 or 200 millionths of a millimetre. They are 200 to 300 times as strong as steel and over the last 5 or 10 years there's been an enormous growth in the industries around this, looking for various applications, so we were very keen to pursue this," said Mr Solomon.

The company had fabricated a process for continuous production and was able to scale this up to about 10 to 15 times the size of the batch process.

"Just before Christmas, we actually achieved a continuous production of both the carbon fibre and the carbon nanotubes on this continuous production unit," said Mr Solomon.

The process sees natural gas going in, heated, and coming into contact with a catalyst. The carbon separates from the hydrogen and the hydrogen gas can be collected. The solid carbon comes off, depending on the catalyst, in nanotube form or as carbon fibre sticks.

"So, we've now got two parts to our industry; one is developing the catalyst so that we can optimize the products we produce; and secondly looking at the products themselves both in terms of the hydrogen and also the carbon."

"There is already a market emerging in Unites States in particular, and also in Japan and Europe for carbon nanotubes and there's a number of commercial distributors of this material. We've actually placed our material with them, and we've had some preliminary feedback."

Mr Solomon said there has been a lot of development by some major companies. For example, Bayer, the big European chemical manufacturer, has completed a 200 tonne a year carbon nanotube production unit. "They use an entirely different process and they're planning a 3,000 tonne a year production unit."

"One of the advantages that they have found is that by adding about one per cent of the carbon nanotubes to concrete, you can increase the compressive strength of concrete by about 45 per cent. On their website you can see a photograph of a concrete canoe with a couple of guys sitting in it and the concrete canoe is so thin but so strong that it can actually be light enough to float."

"So, that's just one of the sorts of applications. We also see similar sorts of applications emerging, perhaps the use in production of car tyres, where you could use the nanotubes instead of the normal carbon black that they currently use, to produce much longer lasting and tougher tyres."

Other applicatons could be to mix it with plastics and produce composite material that could be used to substitute for steel and aluminium, among others.

"We're planning to do a further scale up during 2011 to what we anticipate will be a small commercial scale pilot production unit and at that stage we're hoping we'll have a serious commercial product available, both in terms of our catalyst, our equipment and also the products that we're producing.

Mr Solomon said the interesting point is that hydrogen comes out as a very, very cheap or free by-product. "The major stumbling block in terms of the progress of hydrogen and Hythane in the market place is the cost of the hydrogen and if we can actually start producing the hydrogen very cheaply or even free because it's subsidized by the cost of the carbon, all of a sudden it opens up the rest of the technology. So it's a very, very interesting scenario that's emerging at the present time."

Elsewhere, Eden has had some updates in relation to its gas project in the UK. "We've got some movement in relation to spinning that out as a separate company and they've got some interest from parties that may well be coming in and providing significant funding to develop that and that's got potential as a very large gas play – a European gas play," he said.

"The OptiBlend Dual-Fuel Project is looking very interesting. We've done a couple of installations now in India, got very good results and these are major companies that have multiple installations and once they've trialed it and they're happy with it, we see it as likely to result in a lot of sales which could well lead to a long term sustainable cash flow that we're hoping will get us to cash flow neutral or cash flow positive maybe within the next 12 months."

"We've certainly got interest in the United States on that as well. On the hydrogen and the Hythane side, things are still moving along, although they certainly have moved much slower than we would have liked, both in the United States and India."

The San Francisco project was held up for about six or so while trying to get funding for an electrical sub-station but with that in place Mr Solomon thinks it will now happen, although timing is still uncertain.

In India; the two Hythane Projects - one in Mumbai, the other in Gujarat - have taken longer to happen than thought, but with new senior personnel in both cases there is forward movement. (ASX: EDE)

EnviroMission has arranged a $30 million hybrid debt/equity funding facility to commercialize its Solar Tower renewable energy power station development in Arizona.

The agreement with AGS Capital Group provides EnviroMission with the ability to place EnviroMission securities with AGS Capital Group on an as required basis or at intervals when market conditions support a debt/ equity transaction.

AGS Capital Group is a New York based private investment fund. It has committed to provide EnviroMission with funds for working capital that will include the completion of site specific front end engineering and design currently being undertaken by Arup for Solar Tower development in the US.

The funding will also help with acquiring sites for Solar Tower developments and the capital to complete regulatory and permitting requirements to meet the development timetable outlined in the Southern California Public Power Authority (SCPPA) Power Purchase Agreement.

Roger Davey, EnviroMission's chief executive., said "This funding will allow EnviroMission to complete the next critical stages of development with confidence there will be adequate financial means to deliver Solar Tower development through to ultimate project financing." (ASX: EVM)

Greenearth Energy
Greenearth Energy continues its diversification from pure geothermal energy with its wholly owned subsidiary, Pacific Heat and Power Pty Ltd (PHP), selling the first PureCycle power system in Australia. The sale was to the Gympie Timber Company.

Developed by Pratt & Whitney Power Systems, the PureCycle power system is a 280 kilowatt pre-engineered on-site power generation system that harnesses waste heat in the form of hot water, low pressure steam or thermal oil to generate electricity.

Based on the Organic Rankine Cycle, the PureCycle system converts low to moderate temperature resource fluids like water into electricity through vaporizing and expanding a working fluid in a closed system. It can utilise heat available from sawmill residue heat plants, geothermal wells, oil and gas wells, industrial facilities, and reciprocating engines or gas turbines in operation.

Green Earth says the power system is built with the proven technology and components of commercial centrifugal chillers, ensuring quality and reliability. It is a low-maintenance, cost-effective option that creates revenue, reduces process cost and supports an intelligent energy strategy.

Gympie Timber Company is a Queensland family owned business that has supplied high quality hardwood products to the Australian market for over 70 years. It will connect the PureCycle to an existing thermal oil system used to heat timber drying kilns. Excess sawmill residue will be used to create the additional heat required for the unit. As a result of the installation, the site will become a net exporter of electricity, and significantly reduce its maximum demand on the electricity network.

Perry Corbet, managing director of Gympie Timber Company said "To be a net exporter of electricity means that our company has found a secondary revenue stream from an otherwise wasted by-product, as well as minimizing our impact on the environment. With a relatively small investment, we have been able to find a productive use for our by-product, reduce our process costs, all without compromising the quality of our products."

Craig Morgan, chief executive of Pacific Heat and Power, said "This project highlights what we have known for some time now – that there are vast untapped renewable and waste heat resources that can be unlocked through the use of leading technology such as this."

Mark Miller, managing director of Greenearth Energy, said "We believe that waste heat recovery along with energy efficiency represents a substantial market opportunity for our company.

"Our investment in Pacific Heat and Power and Greenearth Energy Efficiency further underpins our strategic objectives by establishing aligned and complementary technologies and project opportunities in the broader renewable and energy efficiency sectors." (ASX: GER)

Utilities management provider, Intermoco, is redeeming the $2.1 million in convertible notes held by Belgravia Strategic Equities Pty Ltd.

Intermoco redeemed $1.1 million of the notes by placing 290 million shares at 0.5 cents each to raise $1.45 million. The placement was to a variety of investors including the major shareholder Stephen Copulos from the Copulos Group and Bell Potter Securities.

To redeem the balance of the convertible notes, Intermoco will conduct a rights issue to raise $1.1 million at 0.5 cents per share.

Operationally the company has entered into a five year agreement with Sydney based property development company, Statewide Developments, to supply and install embedded networks to two residential properties in NSW. The agreement is for the supply of electricity and voice services to tenants of the Aqua Villa and Sol Rio properties.

Intermoco expects to receive a total of $2.1 million in revenue over the five year period, which includes $600,000 from the Aqua Villa development with an additional $20,000 in capital costs and $1.6 million from the Sol Rio development with an additional $50,000 in capital costs to be received in the third Quarter of 2010-11.

Intermoco chief executive, Ian Kiddle said "These Agreements demonstrate the strong demand Intermoco is receiving for our managed services. These sites will add a further boost to our recurring revenue base and we expect to receive initial revenue from the two Agreements in the third quarter of this financial year". (ASX: INT)

KUTh Energy
KUTh Energy is awaiting resolution of the current arbitration process between the Vanuatu energy utility UNELCO and the Vanuatu government over the tariff formula for existing power generation, which is largely diesel based. A resolution is necessary before KUTh can complete its commercial geothermal arrangements with UNELCO. In the meantime the company said it is working on finalizing terms with drillers and funding agencies that can then be triggered when power purchase agreements are completed. (ASX: KEN)

MediVac had a disappointing response to its share purchase plan, raising only $126,200, with a significant proportion of this from directors and staff.

The plan followed the company entering an equity facility with Dutchess Capital in late 2010, and was to give shareholders the opportunity to also participate in funding current initiatives. These include those expected to arise from the large MetaMizer order for Sri Lanka and the recent TGA registration for SunnyWipes' General Virucidal and Antimicrobial hospital grade disinfectant wipes.

MediVac has appointed two new non executive directors - the Hon. Reba Meagher and Helen Owens.

Ms Meagher is currently the chief executive officer of the Sisters of Charity Foundation, which supports programs that benefit the poor and marginalized. She was a Member of the NSW Parliament from 1994-2008 and served as a Cabinet Minister for over five years including the Health, Community Services, Aboriginal Affairs, Fair Trading and Commerce portfolios. She has a Bachelor of Arts and a Masters of Labour Law and Relations.

Ms Owens is an economist with extensive experience in the health sector. She is a member of the Victorian Southern Health Network Board and the Victorian Cancer Agency. She provides health consulting services, individually and with PricewaterhouseCoopers, to a range of clients including Commonwealth and State governments.

Her previous roles include Commissioner, Productivity Commission and member, Commonwealth Grants Commission. She has directed major national inquiries and research in many sectors of the economy including into Research and Development in Australia, the pharmaceuticals industry, the medical and scientific equipment industries, private health insurance, general practice, and advances in new medical technologies.

Ms Owens was also expert strategic consultant to the Victorian government on national health reform for five years from 2005. She has sat on the CSIRO Health Sector Advisory Council, Australian Health Technology Advisory Committee, Economics Sub-Committee of the PBAC, and Royal Melbourne Hospital boards.

MediVac executive chairman, Paul McPherson, said "As we move towards a stronger focus on commercialization, it is imperative that we bring additional skills to the board."

Stephen Copulos will stand down as a non executive director of the company to focus on his expanding private interests. (ASX: MDV)

Po Valley Energy
Thanks to improved gas revenue, Po Valley Energy reduced its total debt over calendar 2010 from 10.3 million to 6 million.

Its latest move has been to reduce by 15 per cent its current debt with the Bank of Scotland, while separately securing an increased borrowing limit. In December borrowings with its Bank of Scotland facility fell from 7 million to 6 million.

The reduced debt level improves the overall balance sheet while maintaining sufficient funds for near-term development activities, including the drilling of the Vitalba -1dirA well in the producing Castello gas field in northern Italy, it said.

A semi-annual review of the facility saw Po Valley's borrowing base limit for the first half of 2011 rise by 14 per cent to 9.1 million.

In the six months to 31 December 2010 Po Valley Energy lifted gas production 69 per cent from its north Italy gas fields. Total gas production for the second half of 16.84 million cubic metres of gas (595 million cubic feet) compared to 9.94 million cubic metres in the first six months to June 30, 2010 (351 million cubic feet).

The latest figures include the full September and December quarterly production from the wholly owned Sillaro field and was achieved despite significant reduced production from Po Valley's first producing field, Castello.

Gas sales saw revenue climb 75 per cent to 4.52 million for the six months to the end of December, compared to 2.59 million in the opening period.

Total revenue for the year was 7.1m ($9.2 million), including a final December quarter contribution of 2.09m ($2.7 million).

Gas prices remained on an average of 0.30 per cubic metre in the December quarter (US$11.3 per thousand cubic feet).

Po Valley chief executive, Giovanni Catalano, said "Italy remains a highly attractive gas market as it is more than 85 per cent import dependent. That means for a local producer good prices and strong demand for our output."

"Our 2011 work program will now focus on maintaining steady production from Sillaro and drilling a new Castello field well to get that field back into production. We will also seek to drill a new Fantuzza well with a suitable partner. We also hope to gain development approval for two additional fields – Sant'Alberto and Bezzecca while pushing ahead with our broader exploration program." (ASX: PVE)

Reclaim Industries
New Chinese cornerstone investors have given tyre recycler Reclaim Industries an initial capital injection of $2.5 million, and access to a further $10 million through an equity finance line of credit from AGS Capital Group, which operates in New York, Hong Kong and India.

Reclaim's managing director, John Crosby, said the capital injection and the certainty of strong cornerstone investors will allow Reclaim to take advantage of the opportunities which have developed from the downturn in recent years, expand its market opportunities over the next few years and examine other recycling, cleantech and green energy opportunities.

"We have for some time been looking for cornerstone investors who understand our story and our potential," he said.

According to Reclaim's descriptions, the cornerstone Chinese investor group is very well resourced, and includes Messrs Wang Jiandong, Zheng Yafang and Li Xipeng.

"The Chinese investor group is lead by Mr Wang Jiandong, who has made Australia his home. Mr Wang Jiandong is a property developer in China where he has completed many
commercial and residential property developments, and is said to own commercial and residential properties with a total value of over $250 million.

Ms Zheng Yafang is a large clothing manufacturer in Shanghai and operates a national brand of children's ware with more than 400 stores in China. In Australia he has invested in a number of businesses including a children's clothing brand, a large commercial shop fitting company, commercial properties and a home decoration retail chain.

Mr Li Xipeng is chairman of a Nasdaq-listed company and is also a cornerstone shareholder in Jatoil Ltd. He is a large investor in many investment projects in China and internationally.

In Australia Mr Li has invested in areas including energy businesses, residential and commercial properties, retail and wholesale business and is evaluating the opportunity of a large solar farm in regional Australia.

The AGS Capital Group connection gives Reclaim access to the funding expertise of Allen Silberstein. AGS Capital Group provides innovative debt and equity financing solutions for growth-stage and mature public companies as well as private companies seeking to go public.

Its expertise includes healthcare, energy, renewables, media, real estate, telecommunications, consumer products and natural resources.

Negotiations are underway to appoint new directors associated with the new investor and finance groups, as well as an independent director. (ASX: RCM)

Water Resources Group
Water Resources Group listed on the ASX on 24 December with 197.1 million 25 cent shares, giving it a capitalization of $49.3 million.

The company had sought to raise a minimum of $15 million and maximum of $25 million, and appears to have raised the minimum.

The company has 447 shareholders and 303.l million shares on issue. However, restricted shares comprise 49.9 million that will not be listed for 24 months and another 56.1 million that will not be listed for 12 months.

The company also has a rather complicated set of options and convertible notes.

There are 12.1 million management options exercisable at 42 cents each.

Select Access Investments Limited has an option to subscribe for up to $20 million in shares in the first two years of listing. The exercise price is the greater of the IPO price or 80 per cent of the volume weighted average price for the 15 trading days prior to the exercise.

Altima has an option to acquire 24 million shares at 20 cents each, expiring 31 October 2018.

Chairman Peter Carre has two options, with the major one being 2.5 million options at 20 cents each exerciseable until 7 February 2013.

There are 3.2 million Group 1 options exerciseable at 25 cents until 31 October 2013. There are 1.5 million Group 2 options exerciseable at 40 cents and expiring 31 May 2012. There are 585,000 Group 3 options exerciseable at 40 cents and expiring 30 June 2014.

There are two convertible notes to Select Access Investments Limited, each with a face value of $1 million and convertible with accrued interest at 20 cents. These expire on 29 June 2013. Interest is 12 per cent per annum.

On 15 December just prior to listing, Water Resources Group entered a secured Loan Note Deed Poll with Deutsche Bank AG with a principal $2.5 million. Interest accrues daily at a rate of the bank bill reference rate (BBSW) plus 1 per cent per annum and payments are due every three months commencing March 2011 to maturity on 15 March 2012.

Water Resources Group is commercializing an innovative Advanced Sea Water Reverse Osmosis (ASWRO) Desalination system that pre-treats water without using chemicals, and provides low carbon, low cost industrial and potable water from seawater.

The system is monitored remotely through a satellite system, and the small scale plants are modular. (ASX: WRG)

WestSide Corporation
WestSide Corporation said its Meridian SeamGas production activities have had only minor impacts so far from the Queensland floods and production is running at about 90 per cent of pre-Christmas levels.

The resumption of Meridian production and reserves expansion exploration drilling activities is planned as soon as possible.

WestSide's chief executive, Dr Julie Beeby, said gas sales would be down as a result of the deferred production. This may explain the 10 per cent fall in WestSide's share price. (ASX: WCL)

International Companies

Ocean Power Technologies
The executive chairman of Ocean Power Technologies, George Taylor, has continued to sell down his shares. Since October 2009 he has reduced his holding from 714,801 shares to 547,801. The sale prices ranged between US$8.97 and US$5.25, with most in the US$5-6 range.

Ocean Power's share price peaked between November 2009 and January 2010 at over US$9 but then came down to around US$5.60. (Nasdaq: OPTT)

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