Nevada Geothermal Power Reports Results for the year ended June 30, 2012
VANCOUVER, Oct. 26, 2012 /PRNewswire/ - Nevada Geothermal Power Inc. ("NGP" or "the Company") (TSX.V: NGP) today announced results for the year ended June 30, 2012. The Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) are available at www.sedar.com and on the Company's website at http://www.nevadageothermal.com.
|For the year ended|
|(millions of US $ unless stated otherwise)||
|Net loss from continuing operations||$||(6.7)||$||(5.4)||$||(1.3)||(24%)|
|Results of discontinued operations|
|Operating (loss) profit||(36.7)||14.3||(51.0)||(357%)|
|Net loss: operations being disposed of||(53.4)||(2.8)||(50.6)||(1807%)|
|Effect of services to operations being disposed of||1.1||1.1||-||-|
|Total loss from discontinued operations||(52.3)||(1.7)||(50.6)||(2976%)|
|Total net loss||(59.0)||(7.2)||(51.8)||(719%)|
|Net loss per share (basic and diluted) ($)||(0.48)||(0.06)||(0.42)||(700%)|
|Cash generated from operating activities||8.8||12.8||(4.0)||(31%)|
As at June
As at June
|Cash & cash equivalents||$||2.1||$||9.5||$||(7.4)||(78%)|
NGP is a geothermal energy company, focused on developing and generating clean, sustainable electrical power from geothermal resources in the United States. The Company developed and constructed the Faulkner 1 geothermal power plant, at Blue Mountain, which it currently operates. In addition, the Company holds leases on other properties in various stages of development: two in Nevada, one in California's Imperial Valley and a 50% interest in a joint venture development with Ormat Nevada Inc. ("Ormat") at the Crump Geyser property in Oregon.
The Company's subsidiary, NGP Blue Mountain Holdco LLC ("BM Holdo") breached the debt service coverage covenant under its loan from EIG Global Energy Partners ("EIG") on December 31, 2011. BM Holdco has also been unable to make the full minimum interest payments on the loan since January 2012. During the year, the Company employed a Financial Advisor to assist in determining strategic alternatives in the restructuring of debt and in the recapitalization of the Company. This process was concluded without success. During June 2012, the Company determined that the solution preferred by both EIG and the Company is to work cooperatively to transfer NGP's ownership interest in BM Holdco and the Blue Mountain project (including the long-term liabilities owing to John Hancock Life Insurance Company ("John Hancock") and EIG ) to EIG in accordance with their rights under the note purchase agreement. NGP will continue as operator of the plant for a period of time to ensure a smooth transition. NGP and EIG are currently concluding negotiations.
The John Hancock loan requires the Company to obtain an independent forecast of the performance of the Blue Mountain geothermal resource on an annual basis. These resource forecasts have in the past indicated that power production will gradually decline over time, and the Company has undertaken a number of projects in order to reduce the extent of the decline. During September 2012, the Company received an updated resource forecast in respect of Blue Mountain. This forecast predicts a much faster decline in resource temperatures than had previously been forecasted. Accordingly the Company recognized an impairment loss of $44.4 million in respect of the Blue Mountain assets, which is included in the results of discontinued operations above. The Company is working with its advisors to confirm the results of the report. During October 2012, John Hancock advised the Company that it will not allow further distributions from NGP Blue Mountain I LLC, which owns the Blue Mountain Power plant, until matters are resolved.
The Company continues to maintain its resource property assets at Crump Geyser (with Ormat as a partner), New Truckhaven, Pumpernickel Valley and North Valley. The Company has not renewed leases on the East Brawley, South Brawley, and Edna projects. The Company has taken steps to reduce its costs, and is exploring all available strategic alternatives.
On August 10, 2012, the Company and Ormat reached an agreement to extend the time period in which Ormat is required to complete the initial development spending of $15 million to maintain their interest in the project. In return the total cash instalments payable under the agreement were increased from $2.5 million to $3.0 million. A payment of $500,000 was received during August 2012, and a further payment of $500,000 is due on October 29, 2012. The final payment of $1.7 million and completion of the $15 million work commitment is due on June 30, 2014. Ormat has the right to early termination of the agreement, in which case the $1.7 million is no longer payable and 100% of the project reverts to NGP.
During the past year the Company focused project work on the New Truckhaven property. The Company received an independent resource assessment from Mannvit HF, an Icelandic engineering and consulting company based in Reykjavik, Iceland, which confirmed the existence of an Indicated Geothermal Resource of 35 - 60 MW (net) recoverable electric energy, suitable for development of a binary power plant. Management plans to advance the development of this project during 2013.
The Company will consider selling one or more of its development projects to raise additional funds. Management also expects that the contemplated Blue Mountain equity transfer and debt relief described above will improve the financial condition of the continuing operations and make it easier for the Company to advance its plans.
About Nevada Geothermal Power Inc.:
Nevada Geothermal Power Inc. is an experienced renewable energy producer focusing on the development of CLEAN electrical power from high temperature geothermal resources in the United States. NGP currently owns a 100% leasehold interest in several properties in Nevada and California, and a 50% interest in Crump Geyser, in Oregon. These properties are at different levels of exploration and development.
This Press Release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "potential" and similar expressions. These statements reflect our current belief and are based upon currently available information. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. We undertake no obligation to update or advise in the event of any change, addition, or alteration to the information catered in this Press Release including such forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Nevada Geothermal Power Inc.
Brian D. Fairbank, P. Eng. President & CEO
Toll Free: 866-688-0808
Toll Free: 866-688-0808
SOURCE Nevada Geothermal Power Inc.