News

U.S. Geothermal progress on projects in California, Nevada, Oregon and Guatemala

Neal Hot Springs project site, Oregon (source: U.S. Geothermal)
Francisco Rojas 27 Jan 2015

US Geothermal provides updates on several projects: WGP Geysers in California, San Emidio Phase II in Nevada, El Ceibillo in Guatemala, Crescent Valley in Nevada, Neal Hot Springs in Oregon, Gerlach in Nevada and also M&A info.

Following a press release mentioned today from US Geothermal, the company has also provided an update on the progress on projects in California, Nevada, Oregon and Guatemala within the same press release.

DEVELOPMENT

WGP Geysers, California

A new transmission interconnection agreement has been applied for to the California Independent System Operator. Engineering optimization of the power plant design continues. The current well field reservoir model is being updated to reflect a new hybrid plant design that includes both water and air cooling, which will dramatically increase the volume of water available for injection back into the reservoir. Traditional water cooled steam plants re-inject approximately 20% of the water that is removed during power generation, while a hybrid design may re-inject up to 65% of the water. This higher injection rate will provide longer term, stable steam production, and will result in increased power generation over the life of the project.

A new conditional use permit application is being prepared for submittal to local regulatory agencies to replace the current conditional use permit that expires in July. A flow testing program for the production wells is being designed and will be scheduled during the first half of the year. During the quarter we responded to RFP’s from WAPA-Navy and Stanford University for renewable energy PPA’s, but unfortunately neither of the bids was selected.

San Emidio Phase II, Nevada

To further define the resource and confirm that it can support the Phase II plant, two additional wells (OW-14 and OW-15) were completed on the BLM administered land. While the wells extended the high temperature outline of the South Zone, neither well encountered the commercial permeability seen in Well 61-21 (OW-10). A cross tie pipeline was installed between the San Emidio Phase I and Phase II projects. Well 61-21 was connected and is producing 620 gpm of 297 degrees F fluid to the San Emidio Phase 1 power plant as part of a long term flow test of the South Zone portion of the reservoir. San Emidio Phase I plant generation has increased approximately a half of MW.

Permitting for an expanded temperature gradient drilling program is underway for an area south west of the current resource. Results from the recent OW drilling program combined with 1970s era, shallow temperature gradient data, indicate a high temperature trend into this south-west zone. Geophysical surveys have also identified structural trends in this area. Several 1,000 foot deep temperature gradient wells are being permitted to follow up on this portion of the resource.

NV Energy issued a Request for Proposal (“RFP”) from NV Energy for 100 megawatts of renewable energy on October 1st. We submitted a bid for an air cooled power plant to be developed on the Phase II project site. In early December, NV Energy submitted a request to the Nevada Public Utilities Commission (“NPUC”) that the 2014 solicitation be combined with the 2015 solicitation for a total of 200 megawatts to be procured in 2014. The request also allows re-submittal of any projects that had been previously submitted for the original 2014 RFP. We plan to submit an alternative option into the new solicitation that uses a water cooled plant as the basis if the NPUC approves the request.

El Ceibillo, Guatemala

During the year we completed the drilling associated with our resource delineation program, and obtained surface leases for an additional 97 acres. A new drill pad, pond and cellar for EC-2, our planned new well, was completed. EC-2 is located on the new surface leasehold. Drilling of EC-2 is expected to begin as soon as the approval to extend the development schedule contained in the concession agreement has been obtained from the Guatemalan Ministry of Energy.

Our attempts to obtain approval of our modified development schedule from the Guatemala Ministry of Energy (“MEM”) continue. Our request has been approved by the MEM legal department and is now being evaluated by the technical department. As a result of the delays in approval of the modified schedule, we requested an extension of our Memorandum of Understanding for a Power Purchase Agreement with the regional electricity broker. Our initial request was declined, but discussions are continuing regarding the terms of the memorandum and how it may be re-instated or renegotiated.

Crescent Valley, Nevada

In light of recently passed federal legislation that extended the qualification for the 30% Investment Tax Credit to projects that began construction prior to December 31, 2014, drilling of the first production well CVP-001 (67-3) was initiated in December of 2014 following completion of gravity surveys, and analysis of prior temperature gradient drilling data. The first string of production casing was set and cemented before year end, and drilling operations on Well 67-3 are continuing.

Neal Hot Springs, Oregon

A permit has been applied for to drill a water well at the Neal Hot Springs project. The water well will be tested for sustainable delivery, and if commercially successful, it would be used to support the installation of a water cooling system for the facility. The ability to use water cooling during the 5-6 months of summer and fall would increase power generation, when current air cooling results in a dramatic reduction in plant output.

Gerlach, Nevada

Drilling of well 18-10A was completed in late November. The well was drilled to a total depth of 2,889 feet, and encountered a maximum temperature of 275F.

MERGERS AND ACQUISITIONS

Our focus on M&A activities remains very active. As noted previously, the merger of Earth Power Resources (“EPR”) into U.S. Geothermal was completed on December 12, 2014. The EPR acquisition adds high quality development projects to the company’s pipeline, including the Crescent Valley prospect which is discussed above.

We are continuing due diligence on a number of other excellent opportunities that encompass operating projects, advanced development projects and green field opportunities.

Source: Press Release by US Geothermal