Western Wind Energy Corp V.WND

valuing a wind farm

[peter75]

Agros, thank you for your challange of wanting me to dig deeper in finding valuation metrics in establishing fair value on a wind farm

Wind farms are appraised by a combination of metrics including financial data, cost data, engineering drawings, and specs for cost approach analysis

This is formulated to figure the cost of duplicating the facilaties. Once the cost approach is complete you assess the facilaties using an income approach including cash flow modeling and expected finances of the facilaties

If enough market data is available market approach is used to value

Final step in valuation is to estimate the remaining life of the turbines and the residual value of the sites

Also California law states that x percentage of overall power creation shall be deemed green

I am sure California and Arizona are two of the greenest regions in the usa because the reliance on heavy industry is no where near what it is in eastern usa

This also needs to be factored

Also if market regulation of price is fair for returns allowed over time this to needs consideration as regions vary

[agrossfarm]

Ask yourself why a company would buy WND? Don't they care about making money first and foremost? While they will care about the remaining life of the installations, the cost of building a project is less important than how much money it makes if the project already exists.

[peter75]

Agros I  will not defend this thesis as I was citing  an enginering company that valuates fair value on like properties

[peter75]

Agros you are a step ahead of yourself here as you can not establish ROI until you know what to pay for the asset

[agrossfarm]

There are multiple ways to value anything. A sophisticated purchaser of shares doesn't use the same valuation method as a potential acquirer of a Project or of a whole company. What you cite is not incorrect. It is just not tailored for the situation we face. Yes, a buyer of WND will take the length of the remaining life of the wind turbines into consideration but not because they are looking

[peter75]

Thank you So does this mean it really helps to know what revenue generation is created by each turbine both pre and post shelf life as in when older units are written down and replaces Assume that the newer turbines have come down in price and a far more effiecent than the first generation ones that wnd has on its initial farms By a company adding more turbines to a site where Jeff mentioned

[agrossfarm]

My view is that a buyer of the whole company will not give ANY value for Blue Sky unless the bidding is so competitive that the bidder grudgingly finds it prudent. Opportunity to expand, to add turbines, to spend the money to buy more efficient turbines, to move early stage projects forward, is not something that all bidders want to pay for. Some buyers may like to have the opportunity, especially

[peter75]

thanks for your insite The extras that  I add is only to be taken as if there is no value to selling price to be sure Agros here is a tough question that  I can not figure out In your h o do you think wnd has a chance of seeing north of 3.50 If so where do you figure it goes and why

[agrossfarm]

Do I think the ultimate share price could be north of $3.50? Yes. Why? Because I have run the numbers, figured out the debt, estimating where necessary and come up with I could value. The easiest to estimate is the Strategics, who require a 8% or 9% return on capital (according to what Jeff told me).  I am sorry that I can't share all the details with posters just now because I just sent

[peter75]

Look fwd to it

[bakken13]

"I have run the numbers, figured out the debt, estimating where necessary and come up with I could value. The easiest to estimate is the Strategics, who require a 8% or 9% return on capital" --------------------------------------------------------------------- I have done exactly the same process, and came up with similar conclusions. There are minor details that we won't know about,