Ann: Paralana Joint Venture Project Update , page-5

Hi PrimoTrader,

I didn't give you a thumbs down, but you may indeed be missing something...

The REDP grant process is fundamentally flawed, as it relies on the JV partners spending $2 for every $1 that the Govt is prepared to put in. Hence, if the JV partners cannot come up with their $2 share of the projects costs up front, the Govt doesn't actually have to put in anything at all ! This is one of the many reasons why the geothermal industry has effectively been stalled for some years (and the Fed Govt, whilst talking up the new "green economy" and supposedly investing in renewable energy technology/projects, etc., hasn't really outlayed very much money on it at all !) ...

The other very important point to note here is that the REDP grant funding only applies "after" the next crucial stage of the project (ie. "Proof of Concept") has been successfully reached. The REDP grant is designed to help fund the next phase of the project (ie. the development of a 30MW geothermal demonstration project at Paralana) "post" the proof of concept stage...

The Paralana project was proceeding almost perfectly until TRU Energy decided to pull out of the Paralana JV (see PTR's announcement dated 16 Dec 2011), which effectively put the project funding in jeopardy and meant that the REDP funding was essentially unattainable until new funding arrangements could be secured...

Today's announcement is very good news, and goes a long way towards solving the problems, but PTR will still need to come up with more JV funding to cover their share of the project costs going forward...

To my way of thinking, one of the best ways for PTR to secure more funding would be to convince BPT (ie. Beach Energy, their current JV partner) to increase their share in the project in return for coming up with the required funding for PTR going forward. This is turn would almost guarantee that the Paralana JV Project will get the new ERP (Emerging Renewables Program) funding (see details of this in today's announcement), and then would also virtually guarantee that the existing Fed Govt REDP funding would also proceed (see details of the funding deed for this in PTR's ann dated 16 July 2010). IMHO it is in BPT's best interest to provide the necessary funding, as without it the project will remain in limbo and hence cannot proceed to the stage where it will be successful and become economic (ie. when it is producing large scale base load energy/electricity for commercial customers). The other reason for doing this ASAP is that there may be a change of government (federally) in a little over 12 months time, and hence the window of opportunity to receive the Govt funding currently on offer could very well close after that time, and possibly would then be gone forever ...

I hope the above helps to explain things. Please correct me if I'm wrong about anything. This is all IMHO, and is based on my own interpretations of the various announcements that have been made over the years. Please DYOR...

Rgds, W.