Greenearth, which was effectively spun out of Lakes Oil to assess Victoria’s geothermal potential during the 2000s renewables boom, posted a loss of almost $4 million for the six months to December 31 as a result of the writedown, but it had already attracted the eye of ASIC.

ASIC has been focusing on impairment testing and asset values in recent months, and says that companies preparing and approving financial reports, for exploration and evaluation assets, should be assessed for impairment when facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

The regulator questioned Greenearth’s financial report for the year ended June 2014 as part of its ongoing financial reporting surveillance program and expressed concerned about the carrying value of its exploration and evaluation assets for its operations.

Its geothermal initiatives had been affected by a Victorian government moratorium on hydraulic fracturing and well activity, the withdrawal of funding by the state and an unsuccessful grant application to the Australian Renewable Energy Agency, so ASIC wanted to know if Greenearth’s tenements still had any value.

On due consideration the tiny explorer was forced to concede that, no, they did not.

The failure to secure ARENA funds for a proof of concept well in the Latrobe Valley, de-risking the geothermal drilling in an insulated hot sedimentary basin, was a major blow for the company.

ARENA felt the information gained from the well would be too specific to the Latrobe Valley and not beneficial to the geothermal industry as a whole.

The $2.15 million impairment charge represents the total carrying amount of Greenearth’s exploration assets in the Otway and Gippsland basins.

With the Victorian government stopping geothermal exploration going ahead until at least mid-2016, Greenearth has put its energy assets on hold.

It has a work program suspension until May, at which time Greenearth can decide if it will ask the government to extend the suspension or relinquish the areas in light of government-caused industry paralysis.

Greenearth’s decision to apply for suspension and extension of its permit conditions was influenced by the Victorian government’s withdrawal of funding for the company’s flagship geothermal project.

The company, which counts oil field veterans Rob Annells and John Kopcheff as board members, is now primarily focused on its Vivid Industrial energy efficiency business and the beginning of commercialisation of NewCO2Fuels CO2-to-fuels technology business.

Vivid offers customised industrial lighting solutions which deliver cost efficiencies, energy savings and reduced CO2 emissions.

NCF is in the process of building a private plant to take lab-tested technology to a commercial stage.

The CO2 to fuel conversion technology concept was developed in Israel by Professor Jacob Karni and his group at the Weizmann Institute of Science. It involves a method of using concentrated solar energy for the dissociation of CO2 to carbon monoxide, oxygen and hydrogen, creating a syngas that can be used for fuel or converted into methanol or other transportation fuels.