January 12, 2009 / 8:01 AM / 10 years ago

Ormat says OPTI Canada investment to hurt Q4 results

TEL AVIV, Jan 12 (Reuters) - Israeli geothermal energy producer Ormat Industries ORMT.TA said on Monday it will book a $48 million loss in the fourth quarter to account for a decline in the value of its investment in oil sands company OPTI Canada OPC.TO.

The cost of Ormat’s investment in OPTI Canada was $63 million and its stake in the company was worth $106 million on Sept. 30, 2008. The market value of its stake as of Dec. 31 was only $15 million, Ormat said.

The drop in value of the stake will also reduce Ormat’s equity by $80 million in the fourth quarter and by $126 million for all of 2008.

“The sharp decline in value of OPTI Canada’s share price in the quarter was unusual and in the company’s (Ormat’s) opinion was due mainly to the situation in the financial markets and the drop in oil prices,” Ormat said in a statement to the Tel Aviv Stock Exchange.

Ormat’s investment in the Canadian company to date has yielded gains of $50 million, or $38 million after tax, after Ormat sold off some of its shares. Ormat also received $4.5 million in royalties from OPTI and is due to receive more in the future.

OPTI Canada’s shares closed at C$1.77 on Friday, down from a year high of C$25.40 n June.

Calgary-based OPTI Canada is developing the Long Lake oil sands project.

Reporting by Tova Cohen; Editing by Rupert Winchester

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below