Sierra Geothermal with update on strategy work and projects
Canadian Sierra Geothermal Power provides an update on its two-tiered strategic approach. The company continues to find a suitable merger, JV partner or purchaser for the company and drives its project to add value for shareholders.
In a circular, “Sierra Geothermal Power Corp. (TSX-V: SRA) provides an update on its recent efforts to enhance shareholder value. These efforts remain focused primarily on two strategies. The first of these is a structured process to find a suitable merger or joint venture partner or a purchaser for the Company, assisted by its financial advisor, Jacob Securities Inc. This effort was originally announced in a January 26, 2010 news release, and is being managed by Sierra’s Special Committee. The second strategy remains focused on adding value by developing projects to the power production stage.”
On the strategic option of a Merger, Joint Venture or Sale, the company states that “In February 2010, Jacob Securities circulated a detailed Confidential Information Memorandum to select parties, inviting them to engage Sierra in a formal process. Groups have shown active interest, and have initiated due diligence reviews in SGP’s data room.
Exploration and Development Update: SGP is currently drilling a well at Alum and has recently completed a well at Silver Peak. Both wells are drilled as part of the US Department of Energy’s Geothermal Technologies Program grant award on a 50/50 cost share basis between SGP and the US government.
Silver Peak Project: Drilling of the core well 38-11 on the Silver Peak project has been completed to a total depth of 1,649 meters (5,409 feet). The primary targeted structure, a major fault zone, was encountered in the interval from 1,515 meters to 1,631 meters (4,970 feet to 5,350 feet). SGP plans to complete the well with casing to allow for ongoing fluid testing and temperature measurements.
Alum Project: While drilling the coil tube slim-well 26-19 at Alum a zone of high permeability was encountered at 1,187 meters (3,895 feet) to 1,341 meters (4,400 feet). The coiled tube rig was released and the core rig from Silver Peak will be moved to Alum to resume drilling at 26-19. SGP plans to use the core rig to install a second liner to the bottom of the well, which should allow for temperature measurements to be made, in particular within the permeable zone. Once the preliminary temperatures are logged possible next steps include a flow test of the permeable zone and coring the well deeper.
“We are encouraged by the level of permeability that was encountered in these two exploration wells. We are eager to see the stable temperature results as soon as they can be obtained as this is the key element, combined with permeability (flow rate), for commercial production,” said Gary Thompson, SGP’s President and Chief Executive Officer.
Reese River Project: Temperature measurements were recently taken from Reese River temperature gradient wells. Of the 10 wells drilled from 30 meters (100 feet) to 304 meters (1000 feet), gradients ranged from 100 to 200 degrees Celsius per kilometre. This data is encouraging, indicating economic temperatures, and warrants a future extension of the thermal gradient program at Reese River.
In collaboration with the University of Nevada, Reno and the University of British Columbia, SGP’s geologists are working on a novel approach synthesizing geological and geophysical data (magnetotelluric inversion data along with Z-TEM data) to create a conceptual 3D project model, helping us better understand Reese River’s subsurface geology. Results of this collaboration are expected shortly.
Barren Hills Project: The Environmental Assessment is still in progress with the Bureau of Land Management and the US Forestry Service. Completing this is the first step before we can undertake significant exploration work on the project.”
Source: Company release via e-mail.