Acquisition of next dairy biogas to power facility in US, released 27/06/13
Camco Clean Energy plc today announces that it has agreed to acquire an operating dairy biogas to power facility for up to $3.2m in cash subject to the satisfactory transfer of the environmental permits and the land lease with the dairy owner.
The Facility has an installed capacity of 2.1 MW and is situated on a 10,000 plus head dairy near Twin Falls, Idaho , less than 30 miles from the Company’s existing operating 4.5 MW biogas facility near Jerome, Idaho.
The Facility, which utilises an anaerobic digester, was originally developed by Cargill, Incorporated (“Cargill”) and was initially commissioned in 2008. It is currently being operated and maintained by the same contractor managing the Jerome Facility which will continue post acquisition. The manure supply and Facility’s site lease with the dairy expires in 2022. The lease can be renewed for up to 12 years at the option of the Company subject to the same terms and conditions following which the Facility will revert to the dairy owner.
The Facility’s power purchase agreement with the local investment grade utility expires in 2020 and is eligible to be extended at published rates at the time of extension. The Facility generated approximately $300,000 of revenues from electricity sales in the first four months of 2013. Monthly power rates are seasonal under the terms of the power purchase agreement with some of the
higher monthly rates occurring in the second half of the year. In addition, carbon credits generated by the Facility are eligible to be converted into California Carbon Offsets.
The Acquisition is being effected through the purchase of the assets from Cargill and the assignment of the agreements necessary to continue the operation of the Facility. These include the equipment and fixed assets, inventory, intangible assets (including carbon credits), intellectual property, environmental and other permits, as well as the land lease, interconnection agreement and power purchase agreement. The consideration of up to $3.2m will be settled in cash from the Company’s existing resources. There is no existing debt within the Facility.
The acquisition of the Facility will generate immediate cash flow for the Company and will be a meaningful addition to its existing asset and carbon business in the US. The proximity of the Facility to the Company’s existing Jerome Facility is also expected to allow for operational benefits to be secured across both facilities, particularly given the same technology as well as operations and maintenance contractor.
It is expected that the Acquisition will complete in Q3 2013.
Scott McGregor, Chief Executive Officer, said:
“The acquisition of Twin Falls Facility represents a material step forward for Camco Clean Energy and
provides additional critical mass and immediate cash flow to our US operation. Our team has shown
leadership developing and operating quality assets in the sector, and we will use our expertise to
maximise performance of the Twin Falls biogas Facility.”
Camco Clean Energy plc +44 (0) 207121 6100
Scott McGregor, Chief Executive Officer
Jonathan Marren, Chief Financial Officer
N+1 Singer (Nominated Adviser and Broker) +44 (0) 207 496 3000