Ocean Power quits on Oregon wave project, offers shares to public

View Original Source at the Oregonian

April 14, 2014
By Mike Francis

OPT Wave Energy BuoyThe first week of April was a busy one for Ocean Power Technologies, based in Pennington, N.J.

The company, which has boasted about receiving the nation’s first wave power permit for a small project near Reedsport, said it had abandoned that project. And the company announced it would offer shares to the public in a secondary stock offering. It completed the offering last week, raising net proceeds of $12.5 million.

And now it has accepted a grant from the Australian government to develop a wave power project off the southern shore of that continent.

The Oregon announcement was a setback to alternative energy boosters and to firms like Oregon Iron Works, which Ocean Power had hired to build a massive buoy for the project. It also delayed the day when electrical power will be generated by the waves that pound the Oregon coastline.

The Oregonian’s Elizabeth Case wrote a detailed examination of Ocean Power’s lack of progress last summer. She noted that the company had failed to file much of the paperwork necessary to develop the project. She noted that the company had temporarily lost track of one of its offshore anchors. And she noted that the company, which had received a $4.6 million grant from the federal government and another $500,000 from a coalition of utilities, continued to sustain significant financial losses.

As Seeking Alpha noted this month, the company failed to raise enough money to finance the Oregon project, which the company said had become more expensive.

So now Ocean Power is moving on to other, more promising projects. Specifically, in Australia, where the company got a $5 million (Australian) government grant to develop a wave project near the city of Portland, in the state of Victoria.

Here are a few notes from some of the company’s recent filings:

The company expects to continue to have less money available to it “unless and until” it achieves positive cash flow. It rates the offering as carrying a high degree of risk. Its accumulated deficit of $148.4 million.

Not only was Ocean Power Technologies’ pile of cash dwindling, so are its revenues. In the company’s latest quarterly report, revenues for the quarter and the nine-month period ending Jan. 31 were both down sharply — in the range of 25-33 percent. The company reported a nine-month loss of $7.88 million on revenue of $1.22 million.

CEO Charles Dunleavy was paid $525,099 in total compensation in 2013. Executive vice chairman George Taylor was paid $579,803.

As for investors, Ocean Power Technologies shares have traded as high as $7 over the last year, but since the first week of April, have plunged to $2.80. As Seeking Alpha put it: “Wave Goodbye to this Wave Power Company.”

Oregon already has.