Archive for the 'Business' Category
$130M market cap for Calpine
Things continue to look grim for Calpine, the independent power producer struggling to emerge from bankruptcy protection. Squeezed between declining margins (real terms, not necessarily GAAP terms with special charges coming off the books etc.) demanding creditors, one has to wonder if Calpine will emerge from the proceedings now.
Earlier this week the company announced a reduction of their credit facility by $400M (the entire facility was $8B) and a revaluation of the company when it emerges from bankruptcy of $18.95B. Creditors believe the valuation should be north of $24B leaving a significant gap. The bankruptcy court has approved the revised plan and the company should emerge in January. But, this was true in June too and didn’t happen.
Why do we care? Calpine’s portfolio is dominated by natural gas-fired power plants. But, a small and profitable segment of the company is comprised of the 19 plants located in The Geysers region of California producing about 750MW of clean power. We’re very interested in seeing those valuable assets protected and not have them sink with the Calpine ship.
Note: The issue is gaining today, but the market cap is still sub-$200M down from ~$2B in June.
Disclosure: The author holds no position in Calpine (though he did consider it as a speculative investment at one time.)
The Oil Endgame
This TED Talk by Amory Lovins filmed in 2005 is well worth the investment of 20 minutes. He has posted his book, The Oil Endgame, on a website with a free download. Check it out.
Geothermal Development and Finance Workshop
The Geothermal Energy Association, a group that is effectively the geothermal industry’s lobby in Washington, D.C., is sponsoring another Development and Finance Workshop. We’ve attended two of these and can say, for people trying to break into geothermal, they’re a value-added event. Also, like all of these events, it’s proven to be an excellent networking opportunity. This one will be in Las Vegas at the Bally Hotel, Wednesday, January 16, 2008. The session runs from 8-5 and a reception follows.
Session Topics:
- The outlook for state renewable energy laws, federal tax incentives, and other key incentives for expanding geothermal energy production in the West.
- New avenues for financial support of geothermal projects – green power, climate credits, and other approaches.
- Geothermal investing from a variety of viewpoints, including the financing, investing, and marketing of new projects.
- Geothermal project development basics from leading project developers.
- New projects under development: what, where and by whom.
- Geothermal resources in the West – overview and key issues to address for development
So, if you’re interested in geothermal project development and you’d like to get a jump start, we recommend attending this workshop.
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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.
