Ram Power sells Geysers project to U.S. Geothermal
Western GeoPower site at the Geysers in 2011 (source: ThinkGeoEnergy)
Alexander Richter
8 Apr 2014
Ram Power Corp. has sold its Geysers geothermal project in California in a Stock Purchase Agreement to U.S. Geothermal, as announced by both companies. Expected close of the deal is April 30, 2014.
U.S. Geothermal Inc. announced yesterday, “that it has signed a Stock Purchase Agreement to acquire Ram Power Corp.’s (“Ram”) Geysers project for $6,400,000 in cash. The Ram subsidiaries included in the transaction are Western Geopower, Inc., Skyline Geothermal Holdings, Inc., and Etoile Holdings, Inc., which, in turn, includes all membership interests in Mayacamas Energy LLC and Skyline Geothermal LLC. The transaction, which is subject to customary closing conditions, is expected to close on or before April 30, 2014. The acquisition will be funded with cash on hand.
The acquired Geysers project is located at the former Pacific Gas and Electric (PG&E) Unit 15 project site, which once had a 62 megawatt (gross) capacity power plant. The project is located within the broader Geysers geothermal field located in Sonoma County, California, approximately 75 miles north of San Francisco. The broader Geysers geothermal resource is the largest producing geothermal field in the world, and has been generating greater than 850 megawatts of power for more than 30 years.
The acquired Ram subsidiaries possess the full development interest in the project. These interests include all geothermal leases (covering 3809 acres), development design plans, and permits for a proposed 26 net megawatt power plant. Also included is land and geothermal mineral rights ownership of the Mayacamas property purchased by Ram in 2010. This property contains 4 of the 5 existing geothermal wells immediately available for production or injection. Finally, the acquisition includes a 50% undivided interest in the geothermal mineral rights relating to the property that contains the 5(th) existing well also purchased by Ram in 2010. The other 50% interest in this property is contained within an acquired leasehold interest.
At the time Western Geopower was merged into Ram, the drilling by Western Geopower had successfully developed an initial steam flow totaling 462,000 pounds per hour. A report prepared in 2012 by Geothermex, a third party reservoir engineering firm, states that the total initial power capacity from these existing wells is estimated at about 30 megawatts. The report further estimated that the sustainable long-term production from the resource is conservatively estimated at approximately 30 megawatts gross (26 megawatt net), assuming only 25% of the withdrawn geothermal fluid is injected back into the reservoir.
“We are very pleased to add this advanced stage development project to our portfolio,” said Dennis Gilles, Chief Executive Officer of U.S. Geothermal Inc. “Acquiring this project having 5 completed wells available for immediate production with roughly 30 megawatts of total steam behind pipe, is a significant near-term growth opportunity for our company. We are currently evaluating two development approaches for the acquired project. The first involves obtaining a power purchase agreement and constructing a power plant, while the second option involves selling steam to one of several companies currently operating power plants in the Geysers. We are pleased with the terms of the transaction, recognizing that the Ram Power subsidiaries have previously invested over $90 million in the project. We had previously announced that our plan for continued growth would come through a combination of the development of internal projects and growth thru strategic acquisition. This acquisition at the Geysers is a solid first step in the execution of that plan.”
Source: Release by U.S. Geothermal via Wallstreet Journal
