Eco Investor Update

A Weekly News Update for Environmental Investors

2 May 2011 - No 30

ASX 100

APA Group
The price of securities in APA Group hit a three year high of $4.43 on 27 April. The securities have had a steady upward trend since June 2009 when they were $2.60.

The only recent news is a 28 April announcement that APA is to build a $50 million expansion of its Roma Brisbane Pipeline. The expansion is to meet increased demand from customers in Brisbane, with the extra capacity substantially contracted under long term transportation agreements with an energy retailer and a major industrial gas user.

The expansion should be completed in the second half of 2012 and will increase the pipeline's capacity by 10 per cent.

APA managing director Mick McCormack said the Roma Brisbane Pipeline's capacity has been increased incrementally for the last 30 years in line with the growth in demand for gas.

"This expansion continues the trend of growth for this pipeline, now with more than five times its original capacity. With the increasing use of natural gas in Australia's energy mix, we don't see this trend abating.

"The Roma Brisbane Pipeline is Australia's oldest natural gas pipeline. However, the expansion clearly demonstrates that it continues to be a vital piece of energy infrastructure in Queensland," he said. (ASX: APA)

DUET Group
DUET Group co-manager AMP has increased its substantial holding from 12.86 to 13.94 per cent.

Tyndall Investments has become a substantial shareholder with 5.02 per cent. It most recently acquired another 15.4 million securities at an average price of $1.68 cents each. (ASX: DUE)

Sims Metal Management
Shares in Sims Metal Management jumped from $16.60 to $17.97 on news that it expects to release very positive results for the nine months to 31 March on 6 May.

Sales revenue will be around $6.2 billion, and net profit after tax will be around $123 million, up 23 per cent and 74 per cent respectively on the prior corresponding period.

Earnings per share of 60 cents will be up 62 per cent.

Underlying net profit after tax adjusted for atypical items is $109 million.

Scrap intake and shipments were 10.5 million tonnes and 9.9 million tonnes, up 9 per cent and 8 per cent respectively.

Daniel W. Dienst, group chief executive officer said "Our nine month period results reflect a stronger contribution from our North American metals business during the third fiscal quarter and continued strength from Australasia and Europe. We also note another strong performance by Sims Recycling Solutions, our electronics recycling business.

"Scrap intake was strong in our third quarter especially when considered in a seasonal context with growth evident in North America."

IOOF Holdings has increased its stake in Sims from 6.08 to 7.09 per cent. (ASX: SGM)

ASX 200

Dart Energy
Dart Energy is raising $100 million to accelerate its works program, and has completed the $53 million institutional component of the 5 for 22 accelerated non-renounceable pro-rata entitlement offer.

A retail entitlement offer will raise $47 million. The shares are offered at 75 cents each, and the raising is underwritten.

Dart said the institutional entitlement offer was strongly subscribed with 98 per cent of eligible institutions taking up their entitlements and many seeking more than their pro-rata entitlement. All new shares under the institutional offer have been allocated to existing Dart shareholders.

Retail shareholders also qualify for the 5 for 22 offer and can apply for more shares.

Dart chief executive officer, Simon Potter, said "The strong take-up of this capital raising shows support for Dart's management and their strategy of developing energy assets across Asia and in other high value gas markets. Dart's accelerated work program, to be funded from this share issue, is expected to create significant new shareholder value over the next year.

"This capital raising will fully fund Dart's portfolio wide program. The program will enable us to rapidly mature our substantial resource base, establish commerciality at multiple projects, and see early cash-flows. Our strategy is focused on operating in markets with strong demand and where attractive margins are available, and our planned work program over the next year to 18 months will enable us to pursue step-change organic growth initiatives at a time when the market is actively pursuing alternative energy investments." (ASX: DTE)

Shares in Envestra have hit a two year high of 66 cents, with most of the rise coming in the last three months. The last substantial announcement was in February when it released its half year profit results. (ASX: ENV)

Infigen Energy
UK based hedge fund The Children's Investment Fund Management now owns over a quarter of Infigen Energy, having increased its interest to 25.32 per cent from 24.26 per cent in early April. Since last December is has increased its stake by 2 per cent. (ASX: IFN)

Lynas Corporation
Lynas Corporation is to issue an updated explanatory memorandum for the proposed sale of sub-leases within the Mt Weld mining leases to Forge Resources.

The proposal has drawn shareholder criticism as Lynas chairman Nicholas Curtis is also the chairman of Forge Resources.

Lynas said that since the announcement, it has received questions from shareholders and the updated memorandum, available in mid-May, will address a number of questions raised.

The extraordinary general meeting to vote on the proposal will now be held in mid-June.

An independent expert's report by Grant Samuel says the transaction is fair and reasonable to the shareholders of Lynas who not associated with Forge or Mr Curtis.

Meanwhile, Lynas says it has signed a long term supply agreement with a major rare earths consumer for rare earths from its Lynas Advanced Materials Plant (LAMP) in Malaysia.

The contract, the conversion of a Letter of Intent signed in September 2008, is for 11,000 tonnes of rare earths per annum. Phase 1 of the LAMP is on schedule for the first feed of rare earths concentrate into the LAMP in September this year. The contract also provides for the supply of products from the Phase 2 expansion of the LAMP.

Mr Curtis said "Lynas is within six months of commencement of production and the company is very pleased to move from a Letter of Intent to a firm customer contract."

The company remains "actively engaged with potential customers in Europe, Japan and the USA". (ASX: LYC)

ASX 300

Ceramic Fuel Cells
Ceramic Fuel Cells' BlueGen technology has been applied to an office for the first time, with a consortium of companies installed a BlueGen in a 17th century canal house "De Groene Bocht" in the centre of Amsterdam.

The BlueGen is expected to produce all the electricity needed on the site while reducing carbon emissions by more than 50 per cent compared to the local power grid.

The members of the consortium include Cool Endeavour, which initiates the rollout of sustainable technologies, and Amsterdam Smart City, a joint venture between the Municipality of Amsterdam and leading Amsterdam companies.

Several leading energy companies in The Netherlands are also members of the consortium: Eneco generates, distributes and sells electricity, gas, heating and cooling to approximately 2 million business and residential customers; Liander is a distribution company with 2.9 million electricity customers and 2.1 million gas customers; and GasTerra is an international natural gas trading company with revenues of 18 billion.

GasTerra is owned by Royal Dutch Shell, Exxon Mobil and the Dutch Government, and a BlueGen unit is installed at the home of a director of GasTerra.

Paddy Thompson, General Manager Business Development, said "This is an important first step into the heritage market for BlueGen, which can help older buildings – which have notoriously poor carbon emission credentials due to their age, substantially improve their carbon footprint."

43 BlueGen units are now installed in Europe, Japan, USA and Australia. In aggregate, the units have been operating for over 156,000 hours or more than 17 years. The earliest installed units have been operating for more than 11,000 hours.

"All of the 43 BlueGen units have achieved starting electrical efficiency of 60 per cent or more, demonstrating robust and repeatable performance in many different real world conditions," said Ceramic Fuel Cells.

"Over time the electrical efficiency reduces and the thermal output of the fuel cell stack increases. Electrical efficiency is also affected by how the customer wishes to operate the BlueGen unit: efficiency will be lower if the customer modulates the output of the unit or operates the unit at a lower power level. Even with these tradeoffs, the electrical efficiency of BlueGen is far higher than any other microgeneration product.

"The company believes this presents a clear and sustainable competitive advantage in the growing global market for small scale power generation products," it said. (ASX: CFU)

Tox Free Solutions
Tox Free Solutions has acquired Waste Solutions (NT) Pty Ltd, one of the largest waste management companies servicing the Darwin region. The purchase price is $18 million - $10 million cash and 3,832,904 Tox shares.

Waste Solutions provides services for solid waste management, liquid waste treatment and industrial and hazardous waste management. The company operate a liquid waste treatment plant and has a number of long term contracts with the defence industry and the Territory's largest private enterprises. Over half of its revenue is through annual or long term contracts.

Waste Solutions is expected to contribute $3.5 million per annum to earnings (EBITDA).

Tox said the acquisition positions it as the leading waste management business in the Pilbara, Kimberley and Northern Territory.

The deal is expected to complete by 1 July. (ASX: TOX)

Emerging Companies

CBD Energy
CBD Energy and its Chinese partners in the newly formed AusChina Energy Group aim to develop $6 billion of renewable energy projects over eight years and win 33 per cent of Australia's wind energy market.

Its current project list comprises 1500 MW over three years worth approximately $3 billion,

CBD's partners, China Datang Renewable Power Co Ltd and Tianwei Baobian Electric Co Ltd, are two of China's largest renewable energy companies.

The Chinese partners will provide equipment and funding, and aim to establish a competitive advantage in the local market. CBD will project manage developments, including negotiating development approvals and power purchase agreements.

AusChina Energy Group will develop and sell projects and also own and operate completed wind farms for the long term.

A CBD entity will source additional projects for AusChina Energy Group and will not develop wind projects as a separate entity. Similarly, Datang Renewable and Tianwei Baobian will develop any Australian wind energy opportunities through the joint venture.

New projects may include solar thermal and energy storage opportunities.

The joint venture is a stapled entity: a company, AusChina Energy Development Ltd, which is stapled to a unit trust, AusChina Energy Development Trust, with this stapled entity to be owned by the joint venture partners.

Ownership of the joint venture is Datang Renewable 63.75 per cent, Tianwei Baobian
12.50 per cent and CBD 23.75 per cent.

The establishment of AusChina Energy Group has been approved by the Foreign Investment Review Board, along with its first project.

CBD managing director, Gerry McGowan, said "The sheer size of the contribution in terms of equipment cost, purchasing power and funding will make AusChina Energy Group a very competitive player in Australia's energy sector." (ASX: CBD)

Clean TeQ Holdings
Shares in Clean TeQ holdings have hit an all time low of 3.2 cents on 28 April.

Also in April, there was a partial conversion of 2.5 million shares under the first convertible note to La Jolla Cove Investors.

Clean TeQ said that while its market is subdued, it reduced its cash burn rate to $306,000 for the March quarter due to measures outlined in the half year financial report.

Receipts from customers were $1.9 million and $7.1 million for the first nine months. But cash outflow over the same period was $2 million.

"We are encouraged by an increase in the number and size of the pipeline going forward into the 2012 financial year," said the company.

At the end of the quarter the company had cash of $1,641,766 and no material debt. The company provides cash on deposit as security for its financing facilities. (ASX: CLQ)

CO2 Group and Carbon Conscious
Peter Balsarini, chief executive officer of Carbon Conscious and Andrew Grant, chief executive officer of CO2 Group are among the appointees to the Federal Government's Land Sector Working Group, which is examining the benefits and opportunities for the land sector under a carbon price.

The Land Sector Working Group is one of a number of groups established to consult with stakeholders on the design of the carbon price mechanism, said the Government. Advice from the group will help inform the position the Government takes to the Multi-Party Climate Change Committee.

"This group will help inform the design of the carbon price mechanism to ensure all land based sectors of the economy are well placed for a smooth transition to a low carbon future," said minister for Climate Change and Energy Efficiency, Greg Combet.

There are opportunities for the agricultural sector to participate in abatement measures through the Carbon Farming Initiative in order to reduce the effects of climate change, it said.

At around 10.5 cents shares in Carbon Conscious are close to their 12 month low of 8.1 cents. At the end of the March quarter the company had cash of $643,000 but net operating cash outflow for the quarter of minus $1.2 million. It also has loan facilities of $5.3 million of which $3.5 million has been drawn. (ASX: COZ and CCF)

Qube Logistics
Qube Logistics is to acquire DP World's shareholding in P&O Trans Australia, increasing its stake in POTA Holdings Limited to 94.5 per cent. Management will own the balance.

The total payable for the exercise of the call and put options will be $106 million, which includes the purchase of DP World's shares and related loans.

POTA is the business that forms Qube's Landside Logistics division. It operates under the trading name P&O Trans Australia, and provides a comprehensive range of national logistics solutions focused on the import/ export supply chain for containerized cargo.

The services include road and rail transport to and from the port, operation of full and empty container parks, customs and quarantine services, warehousing and distribution, intermodal terminals and international freight forwarding.

Chris Corrigan, chairman of Qube's Investment Advisory Committee, said "Qube is very pleased to move to outright control and majority ownership. We believe that there are substantial growth opportunities for this business, particularly relating to increasing use of rail transport for container movements to and from the ports".

Sam Kaplan, managing director of Kaplan Funds Management, the manager of Qube, said "The price paid by Qube for the additional POTA shareholding represents an attractive multiple of historical earnings and the acquisition is expected to be earnings accretive for Qube in the first year."

Qube will fund the deal from existing cash. Following the transaction, Qube will have cash and equivalents of around $70 million for further investments in its existing businesses and for new investments. (ASX: QUB)

Micro Cap Companies

American Depositary Receipts (ADRs) for algae-to-biofuels company Algae.Tec have commenced trading on the USA OTC market under the ticker ALGXY.

The Bank of New York Mellon (BNY Mellon) has established and manages the Level 1 ADR Program. Algae.Tec executive chairman Roger Stroud said USA investors can now be part of the Algae.Tec global growth program.

Algae.Tec also recently listed on the Frankfurt Stock Exchange (FWB).

"Algae.Tec is one of only a few advanced biofuels companies globally with a technology designed to produce algae on an industrial scale to produce valuable biofuels that replace increasingly expensive fossil fuels," said Mr Stroud.

The technology captures carbon pollution from power stations and manufacturing facilities and feeds it into the algae growth system.

Algae.Tec's managing director Peter Hatfull was in the USA last month to visit the company's US headquarters, the Algae Development & Manufacturing Centre in Atlanta, Georgia and brief New York investor and media.

The Centre is assembling the photo-bioreactors for the demonstration plant at The Manildra Group's ethanol facility at Nowra south of Sydney, the largest ethanol producer in Australia.

The 5,547 square metres fabrication facility was recently modified to enable the retrofitting of the 40-foot steel shipping containers with algae growth modules.

Algae.Tec says its enclosed module system has less than one tenth the land footprint of pond growth options, can produce algae biomass in virtually any environment on the planet, and has the highest yield of algae per hectare.

The photo-bioreactors can produce biodiesel and green jet biofuels. (ASX: AEB)

Carbon Polymers
Carbon Polymers is immediately expanding its operations into Western Australia and South Australia as part of its growth plans through acquisition and internal growth. "We intend to deploy our state of the art technology to take advantage of a market niche vacated recently," it said.

It is also progressing negotiations to acquire the assets of a competitor but these are still not finalized.

Although it did not name the competitor, it has previously announced that it is seeking to acquire SA based Reclaim Industries, which is in administration. (ASX: CBP)

Carnegie Wave Energy
Carnegie Wave Energy has begun producing wave energy with its commercial scale CETO 3 unit installed offshore from Garden Island in WA. Power production is in line with expectations.

Managing director Dr Michael Ottaviano said "This is the most significant milestone in Carnegie's history and follows more than five years of in-ocean testing of scale CETO prototypes. It now allows us to plan our project pipeline roll out with confidence.

"Carnegie's CETO technology was already the only wave technology to have produced desalinated water; it is now the only commercial scale wave unit ever deployed and operated in Australia and the Southern Hemisphere."

The CETO unit's data acquisition and remote control system allows the collection and transmission of performance data and complete system control in real-time from the control centre in West Perth. Carnegie engineers man the centre around the clock to conduct power optimization trials and monitor performance as well as carry out detailed data analysis.

Carnegie expects to have analyzed the performance data in six to eight weeks and on completion of the primary testing period will retrieve the CETO unit for visual inspection.

Carnegie has been developing the design of a small scale, grid-connected 2 to 5 MW demonstration project. A finalized conceptual design is now complete and work on the detailed design will commence shortly. (ASX: CWE)

Clean Seas Tuna
Clean Seas Tuna said that on the advice of external auditors, it proposes to write off the future income tax benefits of $21.6 million carried on its Statement of Financial Position at 31 December 2010.

The writeoff is due to uncertainty as to the rate at which the benefits will be realized. "This prudent write-off is a non-operating profit adjustment and does not have an impact on cash flow," it said.

"The value of the carry forward taxation losses will continue and will be disclosed in the notes to the financial statements. While the directors remain confident that the benefits
will be realized in the future, they are uncertain as to the timing of such realization."

Based on its interim results to 31 March, the company expects a reduction of 35 to 45 per cent in its full year pre-tax operating loss compared with 2009-10.

A review of the carrying value of the company's assets, including the value of licences, Southern Bluefin Tuna (SBT) development costs, intangible assets and future taxation benefits associated with carry forward taxation losses, resulted in no changes to the carrying values of licences, development costs and other intangible assets given the continuing progress with the company's SBT life cycle program

In some good development news, the company said that of the 85 juvenile tuna transferred to sea cages this season, survival rates are encouraging and an estimated that 55 remain alive and continue to feed and grow.

"Progress remains promising for this world-first transfer of SBT fingerlings to sea cages," it said. (ASX: CSS)

Trade in Dyesol shares has been suspended due to an imminent announcement about a "modest capital raising". The raising will be available to all eligible shareholders through an institutional placement and a share purchase plan.

"We consider this a great opportunity for investment in light of the advancing prospects of all major Dyesol commercialization projects," it said.

Meanwhile, the company has established a Level I American Depositary Receipt (ADR) program with the shares to be quoted on the Over-The-Counter (OTC) market and tradeable via licensed US brokers under the ticker DYSOY.

The decision to commit to an ADR program was based on strong investor interest from the USA, particularly after recently reporting progress of the DyeTec Solar joint venture, said the company.

"This quotation will enable potential investors in the US to more easily access Dyesol shares, and will increase exposure of Dyesol to global solar and advanced technology pricing, similar to our successful experience in trading in Germany on the Open Market," said Dyesol chairman, Richard Caldwell.

Dyesol said it is capturing a leading US market position in glass based Dye Solar Cell technology, materials and services. (ASX: DYE)

During the March 2011 quarter Eco Quest received its first cash inflows from initial retail and online sales of its biodegradable nappies. Receipts from customers were $101,000.

However, cash at end of the quarter was only $392,000.

The company said it was able to negotiate improved terms of trade with its suppliers, resulting in no cash payments for stock required during the March quarter.

Board changes at Eco Quest see Stephen Moncur step aside as manager director. He will continue to offer his experience in the eco-nappy sector through a consultancy contract.

Matthew Hiscox, currently the director of Marketing and General Manager Australia, takes on the role of interim managing director.

Philip Streng is a new independent non-executive director. Mr Streng has extensive experience in the retail consumer goods sector over 40 years. He was a director of the Australian Food Brokers Association for 13 years, including two years as its chairman, and currently runs his own sales and marketing business.

Mr Streng will provide input to Eco Quest's negotiations with the major retail chains in Australia and internationally. (ASX: ECQ)

Geodynamics and partner Origin Energy have completed drilling of first Shallows exploration well, Celsius 1, at their Innamincka Shallows Joint Venture. Celsius 1 is their first hot sedimentary aquifer (HSA) geothermal exploration well, and reached its target depth of 2,360 metres.

However, Geodynamics managing director and chief executive officer Geoff Ward did not indicate how long it would take for preliminary logging and testing results to be released. The results will evaluate the reservoir properties such as temperature, porosity and permeability at various depths. (ASX: GDY)

Green Invest
Green Invest has completed the first stage of the restructure of the its US Green Plumbing operations, and says it is poised to assume market leadership in US green plumbing installations and projects.

The company is re-acquiring exclusive rights to Green Plumbers which it says places it in an ideal position to leverage and commercialize its proprietary systems and service delivery standards throughout the USA and Canada.

The first phase of the restructure sees the termination of a commercialization licence previously held by Onni Inc for the Green Plumbers trade mark. All commercialization activities will now be managed directly by Green Invest through its wholly owned subsidiary, Green Plumbers Inc, which has now commenced operations from offices in Sacramento, California.

Green Invest has s also executed a comprehensive, non-exclusive and what it says it a highly valuable Training Agreement between Master Plumbers and Mechanical Services Association of Australia (MPMSAA), and the International Association of Plumbing and Mechanical Officials (The IAPMO Group) for the USA.

The training and accreditation of plumbers utilizing Green Plumbing technology, approved products and systems in the US, India and China will be undertaken by The IAPMO Group.

Green Invest's existing training licence with United Association for plumbers in the US will also continues.

"The value and anticipated value to flow as a result of GNV's partnering with such internationally regarded organisations, who have both an environmental and economic interest in marketing and maximising the adoption of Green Invest's green technology in households and business alike, cannot be overstated," said the company.

Chairman, Peter McCoy, said "These exciting and potentially transforming changes place GNV in an uniquely powerful position to assume and monetise market leadership in respect to the provision and management of environmentally conscious plumbing solutions in domestic and commercial North American premises."

"It is simply staggering to consider that even dual-flush toilet systems remain something of a rarity in most American households. GNV is perfectly positioned to offer bespoke and holistic solutions to North American municipalities, developers and utilities as green plumbing moves from a mere environmental issue to an economic necessity", he said. (ASX: GNV)

Hot Rock
Hot Rock has expanded its geothermal exploration portfolio in South America with two new tenements, Chocopata and Quella Apacheta in southern Peru. It now holds three tenements in Peru and eight in Chile.

Five more Peruvian tenement applications are in the final stages of processing and expected to be granted in the next few months.

Chocopata and Quella Apacheta are both conventional volcanic geothermal heat sources with surface hot springs and temperatures recorded up to 900oC, and extensive surface silica sinter deposits.

These features highlight their excellent prospectivity for proving the geothermal reservoirs suitable for electrical power generation, said the company. High voltage transmission lines are within 70 kilometres of the tenement boundaries.

Community consultation and land access programs are underway and detailed geoscientific surface exploration surveys will commence soon.

The Chocopata tenement is 170 square kilometers and the Quella Apacheta tenement is 125 square kilometres. (ASX: HRL)

Hydrotech International
With cash at the end of the March quarter of only $126,000, Hydrotech International chairman Philip Gray has offered the company "a renewable six month borrowing facility of US$500,000 at an extremely preferential rate of 2 per cent. In due course, I hope to convert this entirely, or partially, into a long term note or bond to be taken up by specialist fixed interest investors," he said.

Mr Gray said Hydrotech's business is booming, producing a short term cash strain. This has been complicated by the company's diversification into the coatings business, which "has been a great success" but has the short term disadvantage of long periods between paying for the import of raw materials and receiving settlement from clients.

"Whilst we are re-negotiating more favourable payment terms with our suppliers and clients, this exhilarating business surge as you can gather has put short term pressure on our dwindling cash resources (although we still have $137,000 of receivables to hand and $630,000 work in progress value from projects)."

The company has approximately $7 million worth of projects under tender or proposal. (ASX: HTI)

Andrew Plympton has resigned as chairman and non-executive director of Intermoco, due to increased work commitments and time constraints from his not-for-profit roles. Mr Plympton became chairman in March 2010.

Mr Plympton said "I have enjoyed very much my time as chairman of Intermoco Limited. The business model of Intermoco is very robust and our most recent result of a positive cash flow quarter is a great result. I have every confidence in the future prospects of the company and wish all stakeholders well for the future."

A new chairman will be announced imminently. (ASX: INT)

MediVac has entered into a non-interest bearing convertible security agreement (CSA) for a one-off secured loan of $250,000 with a US institutional investor.

The CSA has a term of 8 months, and, subject to shareholder approval, can be converted into ordinary shares at the request of the investor at any time.

The conversion price would be 130 per cent of the average of the daily volume weighted average prices of MediVac's shares for the five trading days immediately before preceding the date of execution of the CSA.

Alternatively, the investor can convert at 85 per cent of the average of three daily volume-weighted average prices of MediVac's shares during a specified period ending on the date immediately before the date of conversion.

The loan has a one-off fee of $20,000 that is satisfied through the issue of shares. The investor will be granted 45 million options to acquire shares with a term of 48 months and exercisable at 130 per cent of the average closing prices of MediVac's shares over the five trading days immediately before the execution date.

Executive chairman, Paul McPherson, said "Following our recent accredited investor road show in the United States we have received strong interest in the company, its products and future prospects. This convertible loan investment is an example of this interest and preparedness to invest in MediVac, and a recognition of MediVac's potential by a sophisticated institutional investor." (ASX: MDV)

Mission NewEnergy
Mission NewEnergy shares have been reinstated following its 1 for 50 share consolidation, and the company has completed its NASDAQ IPO.

The consolidated shares opened at $8.89 compared to the equivalent of $10 before the consolidation, and are now trading at around $8.46.

The NASDAQ IPO raised US$25 million at US$9 per share. The shares trade on the NASDAQ Global Market under the symbol MNEL.

Mission will use the proceeds to expand its feedstock operations, including Jatropha acreage expansion and construction of crude oil extraction facilities, and for working capital. (ASX: MBT)

Orbital Corporation
Orbital Corporation is a step closer to a potential production program in China with the delivery of the second, engine phase of the Changan Automotive Project. Orbital said the project showed best-in-class results and it is now progressing with the vehicle phase of the project.

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

"Changan's ICCS (Intelligent Compound Combustion System) engine is a new engine based on their production D20 engine. This new concept incorporates some of the most advanced technologies available to gasoline engines, including Orbital's air assist FlexDITM direct injection, which enables extended lean burn combustion, Variable Valve Timing (VVT) on both the inlet and exhaust sides, 2-step Variable Valve Lift (VVL), controlled Exhaust Gas Recirculation (EGR) along with low friction technology," said Orbital.

Orbital quotes Changan as saying this is a genuine "Green Engine".

The ICCS engine uses Orbital FlexDITM system as the direct injection system to achieve best-in-class fuel consumption. Changan's testing shows that fuel consumption at 2000 rpm is reduced by over 27 per cent, and at idle by over 40 per cent.

Maximum low speed torque increased by 10 per cent while maintaining high speed maximum power.

Orbital's program with Changan to achieve this world leading reduced fuel consumption has been supported by the Australian Federal Government's Green Car Innovation Fund. (ASX: OEC)

Panax Geothermal
Panax Geothermal has signed an agreement with an Indonesian power company to develop a 165 megawatt geothermal project in East Java. It is the company's fourth geothermal project in Indonesia.

Panax has signed a Binding Heads of Agreement with PT Bakrie Power to develop the Ngebel Geothermal Project, which will supply power to Indonesian state-owned power company PT PLN (Persero). It is Panax's third geothermal development project with Bakrie Power, which is part of the Bakrie Group, one of Indonesia's largest companies.

Panax will earn a 35 per cent working interest in the project before commercial development commences.

The reservoir temperature is predicted at up to 200oC and approximately 1,000 metres deep.

"The Ngebel project has enormous potential, it is a near-term development project in a strategic location that is underpinned by a guaranteed, commercially attractive power tariff with the potential to expand to more than 200 megawatts," said managing director Kerry Parker.

A significant amount of exploration works has already been carried out in the project area and Panax will fund the acquisition of existing data and reports, it said. Commercial development is expected to commence in late 2012.

"This a positive step forward in Panax's plans to secure more projects in the Asia Pacific region and make the most of the guaranteed feed-in tariffs, abundant geothermal resources
and renewable energy incentives on offer in Indonesia.

"Panax is committed to building a strong geothermal business in Indonesia. The company's combined share of potential generating capacity in Indonesia now exceeds 160 megawatts."

Panax is also capital raising. It has made detailed presentations to potential investors in Australia, Singapore, and Asia Pacific and says it is keenly advancing these opportunities.

Panax said it is also in discussions with the Australian Government about the potential for new and available grant funding for Hot Sedimentary Aquifer projects. (ASX: PAX)

Po Valley Energy
Po Valley Energy has received approval from the Italian energy for the drilling of a deviated well that it says is a critical step in its plans to recommence production at the Castello gas field. The drilling rig has been contracted.

Chief executive officer, Giovanni Catalanom, said "The securing of the rig contract to drill the Vitalba1dirA well is a critical step in our plan to bring the Castello gas field back into full commercial production. Assuming drilling success the new Vitalba well will allow us to access the remaining Castello field's gas reserves, providing an important increase in the company production and cashflows. What's more, we are confident that, in light of the quality of the seismic data acquired, the validity of the Sant'Alberto and Cembalina projects will be further confirmed."

Following a sudden pressure decline in the Castello well in mid-2010, the gas field has been operating at limited production rates of around 3,000 cubic metres per day. A comprehensive geological review helped conclude that the initial well location encountered an isolated gas reservoir, and that there was a good probability that commercial gas reserves could be accessed by a new well.

The plan for the new well was submitted to the Italian regulatory authorities for approval and authorisation was received in late March.

The Vitalba-1dirA well will be deviated from the current Castello gas plant location and connected to the existing production plant. Subject to drilling success, production is expected to recommence towards the end of the third quarter 2011 or early in the fourth quarter if rig availability is slightly delayed. (ASX: PVE)

Solverdi Worldwide
Solverdi Worldwide could be reinstated to the ASX on 13 May following shareholder approval for a consolidation and reduction of capital, and a name change to SWW Energy Ltd.

Shareholders also approved the issue of new shares and options to Hemisphere Investment Partners.

SWW Energy will focus on biodiesel from waste oil using its thermodepolymerization technology. It will also research and develop the Frac Water Technology and Solar Cracking Technology. (ASX: SWW)

Style had March quarter sales of $2.9 million, 16 per cent growth over quarter 2. This was due to the global distribution networks established in prior months, it said. The increase year on year was 31.2 per cent.

The quarter was also another of positive operating cashflow at $264,000, an improvement on previous quarters due to reduced inventory and improved working capital.

Style had cash of $1.4 million at 31 March. (ASX: SYP)

Water Resources Group
Water Resources Group has restructured its operations and will focus on three key projects.

This restructure includes a decision to move the Company's operations to the US where its technology division, Campbell Applied Physics, Inc. is based.

Deputy chairman and co-founder, Brian Harcourt, said "This restructure will include a reduction in the monthly cash burn to ensure that the Company has sufficient cash resources to see it well into the 2012 calendar year. "

As part of the restructure, CEO Murray Vitlich will step down, as will CFO, Phil Mirams. Non executive director Rich Arnold has resigned.

Mr Harcourt will become interim CEO.

The company said its US operations are at an advanced stage of discussions on achieving its initial contract from the three key regional joint venture partners in Mexico, Morocco, and Saudi Arabia for the construction and commissioning of its Advanced Seawater Reverse Osmosis (ASWRO) system.

The restructure will conserve cash and better position the company for future international business, it said.

Water Resources Group's initial product is its Advanced Seawater Reverse Osmosis Desalination Plant that incorporates the company's Plasma Chemical Reactor technology. (ASX: WRG)

WestSide Corporation
WestSide Corporation has had its total coal seam gas reserves increased with a 30 per cent increase in the total Proved, Probable and Possible (3P) reserves attributable to the Meridian SeamGas reserves at the time the company assumed operatorship on 1 July last year.

Independent certifiers Netherland, Sewell & Associates Inc. (NSAI) now estimate Meridian SeamGas had 3P reserves as at 30 June 2010 totalling 433 Petajoules (PJ).

This is a 30 per cent increase on the 334 PJ of 3P reserves originally attributed to the joint venture, based on WestSide's calculations.

Proved and Probable (2P) reserves also rose 20 per cent to 224 PJ, primarily reflecting the reclassification of some Proved (1P) reserves due to a lack of development work in the 18 months prior to WestSide assuming operatorship.

NSAI has updated its estimate of Meridian SeamGas' total 1P reserves to 22.1 PJ.

WestSide's chief executive officer Dr Julie Beeby said NSAI's updated reserves estimate was compelling evidence of the significant latent value the company had initially identified within the Meridian SeamGas assets.

Dr Beeby said WestSide and Joint Venture partner Mitsui E&P Australia Pty Ltd had, since July 1 2010, implemented work programs to start lifting production toward 25 Terajoules (TJ) a day by the end of 2012 and boost gross 2P reserves by up to a further 200 PJ by mid-2011.

"Significantly, this updated reserves estimate does not take into account exploration and production drilling work undertaken at Meridian SeamGas since WestSide assumed operatorship. Nor does it include an additional seven or so coal seams present above 1000 metres or any seams below that depth," she said.

WestSide is targeting a reserve upgrade in mid-2011.

As a result of the updated estimates, WestSide's total net 3P reserves have increased by 50 PJ to 431 PJ after including the 211 PJ attributable to the company's 50 per cent interests in ATP 688P and ATP 769P. (ASX: WCL)

Unlisted Funds

Climate Advocacy Fund
The Climate Advocacy Fund's first climate change resolution was defeated at the Woodside AGM with a majority of superannuation funds failing to back the resolution, The Climate Institute and Australian Ethical Investment said. 27,325,549 shares were voted in favour of the resolution with 439,313,407 against and 13,647,015 abstained.

"Disappointingly, some super funds who claim to have strong environmental credentials or are signatories to the UN Principles of Responsible Investment did not support the resolution," said Julian Poulter, The Climate Institute's Business Director.

"Even more disappointingly, some super funds, who are signatories to the Carbon Disclosure Project which advocates this kind of disclosure, did not ‘walk the talk' and voted against the resolution.

"The largest Woodside shareholder Shell has disclosed its carbon price assumptions to its own shareholders whilst shareholders of Woodside have failed to join the dots and demand greater visibility of climate risk.

"The bottom line is that this is a very bad day for Australian super funds and their members who still don't know what risks are in the Woodside black box."

The Climate Advocacy Fund's resolution was seeking to mandate the board disclose to shareholders the carbon price assumptions that Woodside relies on for project evaluation and in assessing the value of oil and gas assets and accounting for future carbon prices.

The resolution was supported by the Australian Council of Superannuation Investors (ACSI) who recommended that their members support the resolution, and by major super funds including Local Government Super and industry super fund MTAA. Internationally it was supported by F&C Asset Management.

James Thier, executive director of Australian Ethical Investment, said "Whilst we are disappointed that more Australian super funds didn't vote in favour, the resolution received support from a number of influential investors, advisers and investor groups.

"This was Australia's first climate change resolution. I have no doubt that it will not be the last."

The Climate Advocacy Fund is now formulating climate change resolutions for the next reporting season.

In some positive news, the board of Oil Search has agreed to adopt a greenhouse gas emission reduction target this year, following engagement from the Climate Advocacy Fund.

"This is excellent news for Oil Search shareholders and demonstrates that the company is taking seriously the importance of managing and reporting climate change risk," said Mr Poulter.

International Companies

Contact Energy
Contact Energy plans to raise about NZ$350 million from a 1 for 9 pro rata renounceable entitlement to its New Zealand and Australian shareholders at NZ$5.05 per share. The price is a 13.8 per cent discount to the share price before the announcement.

The capital will strengthen its balance sheet for investment in growth opportunities, the first of which is the 166 megawatt (MW) Te Mihi power station to be constructed by mid-2013.

Contact Energy's major shareholder, Origin Energy, will take up its full entitlement.

Contact Energy's growth strategy is to develop a range of future generation options, including geothermal, gas, wind and hydro, and to construct selected projects at the right time.

Geothermal exploration, development and operation is a core activity. The company's Wairakei power station was one of the first geothermal power stations in the world and has
been operating for over 50 years.

Contact Energy has access to high quality steam resources that could support the addition of over 350 MW of new geothermal capacity in the next few years.

These options together with other emerging opportunities in the New Zealand market position Contact Energy to become one of the world's leading geothermal companies, it said.

Contact also has consents for two other generation projects – the 250 MW Tauhara 2 geothermal project and the 156 MW Waitahora wind project and draft consents for the 504 MW Hauauru ma raki wind project.

"We have committed to the construction of Te Mihi because we believe geothermal is the most price competitive source of new electricity generation for New Zealand. On the same basis, we expect the Tauhara 2 plant to be Contact's next significant generation market investment following Te Mihi," said Mr Barnes. (NZX: CEN)

Ocean Power Technologies
Ocean Power Technologies, Inc. has awarded four major contracts to Oregon companies for the manufacture of its PB150 PowerBuoy wave energy generator, and its deployment off the coast of Reedsport, Oregon.

The four contracts are for manufacture of the subsurface floats and tow-out fixtures that are part of the mooring system for the PowerBuoy, final assembly of the PowerBuoy and to position it in the Columbia River for towing to the coast, insertion and assembly of OPT's proprietary power take-off and internal electronics into the PowerBuoy spar, and deployment of the PowerBuoy.

The new contracts, with the previously awarded contract to Oregon Iron Works for the fabrication of the buoy's steel structure, or spar, takes the total invested by OPT in the local economy to over US$6 million.

After the initial PowerBuoy is deployed and tested off the coast of Reedsport, expected later this year, and subject to regulatory approvals and additional funding, OPT plans to construct the first commercial-scale wave power station in the US, consisting of up to nine additional PowerBuoys and grid connection infrastructure. This wave energy array will be developed by Reedsport OPT Wave Park, LLC.

Meanwhile, OPT chairman George Taylor continues to sell down his holding in the company. In April he sold another 50,000 shares at prices between US$4.75 and US$4.90 each. (Nasdaq: OPTT)

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