By JOHN VAN KLAVEREN
A COMPANY investigating geothermal energy technology in the Geelong region could fold after writing down its assets by a further $2.15 million.
Greenearth Energy said it now needed to raise $2.4 million over the next year to remain viable.
The company has been investigating potential for fracking technology to tap underground heat near Angelsea for power generation.
The write-down followed Australian Securities and Investment Commission (ASIC) questioning the ASX-listed company’s 2014 financial report.
ASIC said it welcomed Greenearth’s subsequent $2.15 million “impairment charge” against its geothermal operations.
“We questioned the company on the carrying value of its exploration and evaluation assets for its geothermal operations.
“These operations had been affected by a Victorian Government moratorium on hydraulic fracturing and well activity, the withdrawal of funding by the Victorian Government and an unsuccessful grant application to the Australian Renewable Energy Agency.
In its half-yearly report, Greenearth Energy said it incurred a net loss for the half year of $3.9 million, up from $1.08 million in 2013.
“The directors have determined that to maintain and grow operations there is likely to be a net cash requirement of $2.4 million over the coming 12 months.
“A failure to raise capital or obtain other finance would raise significant doubt over the company’s ability to continue as a going concern.”
In his report, Greenearth chairman Robert Annells, also chair of Lakes Oil, said the company’s flagship Geelong Geothermal Power Project had experienced funding setbacks.
Australian Renewable Energy Agency had shown no interest in providing funding and the Victorian Government had terminated its $25 million commitment for the project, Mr Annels said.
“Although the group retains its interests in the project, we have suspended all work … and do not intend to direct significant funds towards the project until further notice.
“With the Victorian Government’s current ban on hydraulic fracturing, the outlook for geothermal industry operations in Victoria remains slow.”
