U.S. Geothermal reports year-end 2017 results with pending acquisition by Ormat

Geothermal developer U.S. Geothermal has released its year-end 2017 results. Published at an interesting point, as the company has entered into a definitive agreement to be acquired by Ormat Technologies in a deal expected to close in the second quarter of 2018.

Operating Revenue in 2017 was $32.10 million, compared to $31.48 million in 2016. EBITDA in 2017 was $12.65 million compared to $14.98 million in 2016. Net Income (loss) in 2017 was $(0.45) million, compared to $3.59 million in 2016. Net income (loss) attributable to U.S. Geothermal in 2017 was $(2.27) million, or $(0.12) per share, compared to $0.46 million, or $0.02 per share in the prior year period.

On a quarterly basis, Operating Revenue for the fourth quarter of 2017 was $10.50 million, compared to $10.58 million for the prior year period. EBITDA was $4.93 million for the fourth quarter of 2017 compared to $6.24 million for the prior year period. Net Income (loss) for the fourth quarter of 2017 was $0.15 million, compared to $2.52 million in the prior year period. Net income (loss) attributable to U.S. Geothermal for the fourth quarter of 2017 was $(0.26) million, or $(0.01) per share, compared to $0.95 million, or $0.05 per share in the prior year period.

“While we made up a significant amount of the generation lost due to the mechanical issues suffered at two of our plants earlier in the year, the repair costs and the non-recurring costs negatively impacted our financial results for the year,” said Douglas Glaspey, Interim Chief Executive Officer. “We remain on schedule to close the previously announced merger agreement with Ormat Technologies, Inc. and expect the transaction to close in the second quarter of 2018.”

Development Projects Update

• Successfully completed multi-well flow test at the recently drilled Southwest Zone wells at San Emidio II.  Flowing temperature from the three wells ranged from 319°F to 325°F. Test results confirm resource estimate of 25 megawatts (at 90% probability) up to 47 megawatts (at 50% probability).
• El Ceibillo development project awarded $3.42 million grant from the German Development Facility for Latin America for further production drilling.
• U.S. Trade and Development Agency (USTDA) awarded a $825,319 grant to U.S. Geothermal Guatemala S.A. to provide funding for a feasibility study on the El Ceibillo development project.
• Company continues to respond to RFPs/RFOs from potential customers in order to secure power purchase agreements.

Operations:

• The addition of a new production well (RRG-5) and an upgraded injection pump resulted in a total annual average increase of 1.6 net megawatts of generation at Raft River which should result in approximately $1 million additional revenue in 2018.
• Approved an enhancement program to increase generation at the San Emidio I project by drilling a new production well. The drilling permit was approved by the BLM, which will be a twin of an existing observation well.
• Generated a fleet wide total of 95,417 megawatt hours for the quarter, as compared to 97,879 megawatt hours in the 4th quarter of 2016.
• Generation from all facilities totalled 323,832 megawatt hours for 2017, as compared to 326,601 megawatt hours in 2016.

Strategic:

• Entered into definitive agreement to be acquired by Ormat Technologies, Inc. for $5.45 in cash per share. For additional information regarding the merger agreement, please reference the press release the Company issued on January 24, 2018.

Cash Management:

• Ended the fourth quarter of 2017 with $235.7 million in Total Assets, Cash and Cash Equivalents of $16.6 million (Company share of $14.6 million), and Restricted Cash of $23.6 million.

Source: Company release