Ocean Power Technologies Progresses on Key Wave Energy Projects in Fiscal Third-Quarter 2014, Expands in Japan

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Researched by Industrial Info Resources (Sugar Land, Texas)--Ocean Power Technologies Incorporated (NASDAQ:OPTT) (OPT) (Pennington, New Jersey), which designs and produces wave-energy devices for the renewable power sector, continued to face delays on a key project in Oregon in the third quarter of the company's 2014 fiscal year, but made progress on several others, including what will soon become the world's largest wave energy project in Australia. OPT reported a net loss of $739,790, down from the $1.47 million loss in fiscal third-quarter 2013.

Total revenues stood at $199,622, compared with $865,553 in fiscal third-quarter 2013. OPT faced a decline in external funding for its PowerBuoy projects, including a series of delays at the company's project off the shore of Reedsport, Oregon, that are related in part to regulatory issues. (OPT executives recently decided not to renew a preliminary permit for future project phases at Reedsport.) Still, the company reported lower net losses due to a drop in selling, general, administrative and particularly employee-related costs. OPT also benefited from a $1.75 million gain through New Jersey's Business Tax Certificate Transfer Program.

During the quarter, OPT also began work on a planned PowerBuoy development off the coast of Japan, following a $2.6 million contract from Mitsui Engineering & Shipbuilding. According to a quarterly OPT press release and presentation, a renewable, 10-year-term license is in place for Mitsui to sell PowerBuoys in Japan, the Philippines, Malaysia, Vietnam, Mozambique, South Africa and Namibia. OPT is to receive royalties and supply power offtake systems.

OPT's contract backlog at the end of January stood at $5.6 million in fully funded projects, compared with $4.3 million in the same period last year. Most of the backlog consists of cost-sharing contracts to support product development.

Industrial Info is tracking more than $1 billion in active projects involving OPT, including the construction of 10 PB150 PowerBuoy units of 150 kW each, as well as a substation, to supply renewable energy to the grid. The project is the first phase of the estimated $170 million, three-stage construction of a wave energy power station in Portland, Victoria, that eventually will generate an average 19 MW. It is expected to be one of the largest wave power projects in the world. Lockheed Martin Australia Pty Limited, a subsidiary of Lockheed Martin (NYSE:LMT), is serving as a contractor.

"In December, the Autonomous Power group completed ocean testing of a novel generation system for low-power requirements, in connection with a 'Small Business Innovation Research' (SBIR) contract from the U.S. Department of Defense," said Charles F. Dunleavy, the chief executive officer of OPT, in a conference call. "Work also was conducted on the development of advanced energy control algorithms as part of a U.S. Department of Energy SBIR contract. Achievements under this advanced control work will also benefit our utility PowerBuoys."

OPT is continuing to develop funding for the Portland, Victoria, project with the Australian Renewable Energy Agency, signing an amended $60.23 million (AUD$66.5 million) grant agreement in the third quarter. OPT is now reviewing prospective power purchase agreements and conducting seabed surveys to satisfy requirements for licensing and approval. The grand it held by project-specific operating entity Victorian Wave Partners Pty Limited, which is fully owned by Ocean Power Technologies (Australasia) Limited, which itself is 88% owned by OPT.

"As our engagement with prospective customers in the Autonomous PowerBuoys market continues to evolve, we're increasingly recognizing the market's interest in a broader range of power in our Autonomous PowerBuoys," Dunleavy continued in the conference call. "Accordingly, in addition to the lower power levels of our autonomous products, we are actively examining the use of our Mark 3 PowerBuoys for autonomous power, as well as grid-connected applications. This may expand the current market for our core PowerBuoy technology in the oil & gas, as well as maritime surveillance, segments."

For more information, visit Industrial Info's North American Renewable Energy Project Database.

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