Archive for the 'Geothermal' Category
ArcLight/Caithness debt financing advances
Via PRNewswire:
Caithness Coso Funding Corp. (the “Company”) announced the pricing terms of its previously announced tender offers and consent solicitations for any and all of its outstanding $90,000,000 original principal amount of 6.263% Subordinated Secured Notes due 2014 (CUSIP Nos. 128017AK6 and U12295AD0) (the “2014 Notes”) and its $375,000,000 original principal amount of 5.489% Senior Secured Bonds due 2019 (CUSIP Nos. 128017AG5 and U12295AC2) (the “2019 Bonds” and, together with the 2014 Notes, the “Notes”). The tender offers and the related consent solicitations are subject to the terms and conditions set forth in the Company’s Offer to Purchase and Consent Solicitation Statement, dated September 18, 2007, and the accompanying Consent and Letter of Transmittal
(together, the “Offer Documents”).
This deal continues to drag on, but the release shows that progress is being made. The Coso Geothermal plants make up the bulk of the generation assets in the ArcLight Renewco deal and this needed to be sorted out clearly – particularly with respect to the operating agreements in place with the US Government for those assets.
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Raft River one step closer
Via Yahoo News:
The plant originally commenced the test phase of power production on October 18th and operated over a six-day period until October 23rd, during which time it ran for 108 hours and generated a total of 1,022 gross megawatt-hours of electrical power. On October 21st the plant operated for 24 hours and produced a peak output of 13.2 megawatts. The first revenue from the test run has been received from Idaho Power Company.
The plant will now continue an approximate sixty to ninety-day start-up and testing phase during which time all generated electricity is being sold. Plant operations are being scheduled to allow for operator training, equipment testing and for Ormat Nevada Inc. to complete power plant performance testing and other completion obligations.
US Geothermal is keeping to its announced timing around the project, despite unforeseen problems, which is good news for investors.
Disclosure: The principals of MeV hold no position in US Geothermal.
Calpine Tanks
Back in June when Calpine unveiled their plan to emerge from bankruptcy, we weren’t too positive. In fact, we were downright puzzled by the market reaction sending the stock over $3/share and market capitalization greater than $1.5B. The issue has been on a steady downswing since that time settling in around $1.20/share, around $600M in market cap. Yesterday the bottom dropped out when the company announced a reduction in their enterprise value by $900M. The stock’s valuation now stands around $240M and closed yesterday at $0.495/share.
We wonder if it might not be a sensible thing for Calpine to spinoff its geothermal unit into a separate entity and let the natural gas portion of its portfolio sort itself out with the mother company. With the current market for renewable energy running very hot, this could create a pure play competitor to Ormat with 2x the generation capacity (Ormat is producing about $200M/year from ~375MW – Calpine has 800MW, that should produce around $425M in revenue per year…)
At current valuation and with the geothermal assets, we see Calpine as an interesting speculative buy. Caveat Emptor.
Disclosure: The author holds no position in Calpine stock. The author is considering a speculative, long-term position in the company. 2 comments
Ormat 3rd Quarter Results
Last week Ormat announced a solid quarter with revenues $79.5M, up 2% Y/Y and earnings of $15.8M up 13% Y/Y. Details of the earnings announcement are available in this press release. Dita Bronicki reaffirmed guidance for the year and the quarter and the stock has responded well in the market place. For the year, Ormat is on track to deliver $280M in revenue and around $55M in earnings for 2007.
The equipment business continued to be “lumpy” showing a decrease of 15.8% Y/Y – while the recovered heat product wins seem to be coming in, increased competition in the geothermal heat conversion business could be starting to have an impact. Also, a number of developers we have contact with are not inclined to select Ormat equipment for their projects due to the competitive relationship (some have used the word “predatory”) Ormat has fostered with developers. This bears watching closely, though the electricity segment continues its growth generally as predicted.
A secondary offering of 3.3M shares raised $155M in this quarter, though it is not reflected in the results. This money will be used to further advance the development of new power plants. Also, it is rumored, though not reported that the company may have realized positive results from one of its drilling and exploration programs in Nevada.
At current market cap, $1.89B, Ormat is trading just north of 34 times 2007 earnings.
13.2 MW for Raft River
During testing late last month, the Raft River Unit One facility produced a maximum of 13.2MW of power. Based on data collected from the test run, the plant equipment is being tuned and repaired (due to debris flow through the turbine) to enable the company to enter production late this calendar year. The full press release from US Geothermal is available at their website.
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