Nevada Geothermal Power to undergo complete reorganization
Nevada Geothermal Power has announced reorganization plans that will see a name change and the company seeking buyers and/ or joint venture partners for its advanced-stage geothermal projects.
In an announcement yesterday, Canadian geothermal developer Nevada Geothermal Power (TSX-V: NGP) reported that “it will implement a reorganization plan that was approved earlier by shareholders at the Annual and Special General Meeting on July 24, 2012. In addition, the Company will explore opportunities for asset sales, project development, acquisitions and potential mergers.
It is proposed that the Company name will be changed to “Alternative Earth Resources Inc.” upon completion of the reorganization plan, and there will be approximately 24,482,000 shares outstanding following a 1 for 5 reverse split of the stock. Completion of the reorganization is subject to the acceptance of the TSX Venture Exchange.
On closing of the Blue Mountain equity transfer agreement as announced January 16, 2013, the Company will have ownership interests in four geothermal development properties in the western US (Crump Geyser, New Truckhaven, Pumpernickel and North Valley) and no long-term liabilities. The Company will not have an ownership interest in the Blue Mountain project, however it will operate the Blue Mountain geothermal power plant through a transition period up to 12 months. The Company expects to have sufficient cash and income to cover project costs, lease payments, staffing and corporate overhead beyond the end of the transition period.
The Company will seek buyers and/or joint venture partners for its advanced-stage geothermal projects. New tax legislation passed by the US Senate and Congress in early January, 2013 should provide significant Production Tax Credit (“PTC”) and Investment Tax Credit (“ITC”) incentives for prospective partners. Under old rules, qualifying renewable energy projects needed to have started construction in 2012 with an additional requirement to be “placed in service” by January 1, 2014. The fixed completion date requirement caused several projects that were underway, like the Company’s Crump project with Ormat, to drop out after having started construction. Under new rules, geothermal projects will be eligible for the PTC or a 30% ITC on certain project costs if project construction commences beforeJanuary 1, 2014. Significantly, there is no preset date for a project to be placed in service once construction starts, which helps reduce project financing risk. Project sponsors or financing partners must choose between the PTC, currently valued at $22/MWh and applied with an inflation index through the first ten years of production, or the 30% ITC. The Company has completed planning under which its Crump Geyser, New Truckhaven and Pumpernickel projects can be ready for development drilling or start of construction in 2013.
Brian Fairbank, President & CEO said “the Company looks forward to new challenges and opportunities armed with valuable project development and operating experience.”
Source: Company release vie Newswire