ASX-listed geothermal company Petratherm has warned of an expected $17 million writedown of assets in its flagship Paralana project in South Australia, after failing to meet its deadline for a government grant last month.
Petratherm advised in July that it was unable to meet the terms for funding of its 7MW geothermal power plant in the Flinders Ranges, which required the company to secure $5 million in equity to draw down on a $13 million Emerging Renewables Program (ERP) Grant.
The missed deadline meant the company would also be denied access to a $24.5 million Renewable Energy Development Program grant – awarded in 2009 by the fore-runner of the Australian Renewable Energy Agency (ARENA).
The funds were to be used for a second well for the $62 million Paralana project, which taps naturally fractured shales just above the hot basement rocks.
Petratherm executive director Terry Kallis confirmed the lapsed grant meant the company would be “unable to fund the project in the forseeable future”.
According to Kellis, Petratherm’s inability to raise the necessary funds to satisfy the grant conditions was reflective of the broader difficulty small companies were experiencing in raising equity for exploration and development projects.
