NGP: CASE 2
For CASE 2, EIG also takes a 60% interest in BM 1, with NGP receiving $2 million per year from EIG as the operator of EIG's interest. Presently the BM 1 PPA should be about $80 per MW and will increase 1% annually until the end of its term. With both EIG and NGP as joint owners of BM 1, they might seek a new PPA. Also the present EIG loan which presently has ~$88.4 million outstanding on it will no longer be a detriment to NGP.
For a 41MW net plant, annual sales will come to ~$28.73 million during the first year, of which 60% or ~$17.24 million will go to EIG and the remaining ~$11.49 million to NGP, plus an additional $2 million operators fee (my estimate) for a total of ~$13.49 million to NGP, leaving EIG with ~$15.24 million after the operators fee..
Now we look at what EIG may give up, they would give up $14.84 million on the P & I of their very high 14% interest loan loan, but they would own 60% of a geothermal plant worth over $160 million, (my estimate) an interest that they can later sell, if they so desired. What I'm trying to bring forth is though EIG will not receive the original P & I on the loan, they will receive more than the principal on the $88.40 million loan, which divided by 13 years (the remaining term) would be ~$6.79 million annually from their sales proceeds, leaving $15.24 – 6.79, or ~$8.45 million. Then 60% of approximately ~$6 million would be plant depreciation, giving cash flow of ~$3.60 million, providing EIG a total of 6.94 + 3.6 or, ~$10.54 million toward the $14.84 million P & I with ~$4.85 million for other expenses.
NGP with $13.49 million minus the JH loan of $7.3 million would have about $6.19 million for their purpose, of which $2.40 million would be depreciation, leaving $3.79 million for other expenses. More importantly NGP will no longer have onus of the EIG loan hanging over it and retain her past tax write offs. In addition with ~25 million shares after the proposed reverse split, she should attract interest from potential shareholders and lenders.