The Australian Securities and Investments Commission has lifted a stop order on float hopeful Eneabba Gas, which says it is back on track with its proposed power station development.
Eneabba has issued a supplementary prospectus that highlights a number of risks associated with its project.
It has also provided updated information on the amount of revenue it may receive from reserve capacity payments, which are intended to be its main source of income.
These payments are made by the state government’s Independent Market Operator to certain companies that have installed electricity generation capacity, and are paid even if the power plant is not actually used.
They are designed to ensure the state has sufficient electricity generation capacity.
Eneabba said the pricing information in its original prospectus was “inadvertently” based on prices that would apply in a different year.
The state government’s Economic Regulation Authority recently approved reserve capacity prices that are nearly 20 per cent below the prices quoted by Eneabba.
Assuming Eneabba qualifies for the reserve capacity payments, the revenue it is likely to earn would be $10.4 million per year.
New arrangements introduced by the IMO mean that participants in the reserve capacity scheme would be able to lock in this price for 10 years, with inflation adjustments.
Newly appointed Eneabba director and former Foodland executive Chris Bennett said “we are very pleased we have managed to resolve our issues with ASIC”.
The company is seeking to raise $10 million, with the proceeds to be used to fund a feasibility study on construction of a gas-fired power station near Dongara, as well as to purchase land and to lodge a deposit for the reserve capacity scheme.
“The directors have a significant degree of confidence of a successful outcome of the feasibility study,” Mr Bennett told WA Business News.
He said the company was “very pleased to clarify the pricing structure”.
The regulatory delays mean the offer is now scheduled to close on April 2, two months later than originally planned.
“The delay in funding will not affect the original timing for start-up of the project,” Mr Bennett said.
