U.S. Geothermal project and corporate updates
San Emidio power plant in Nevada, U.S. (Source: U.S. Geothermal)
Alexander Richter
24 Eki 2014
US Geothermal Inc. has just released an update on the results of its three operating projects for the third quarter of 2014 and the status of development activities done this year.
In a recent press release by US Geothermal, the latest update on the results of its three operating projects for the third quarter of 2014, and the status of development activities is detailed. The following is the verbatim press release done by the company.
OPERATIONS
Neal Hot Springs, Oregon
All three units continue to operate well, with third quarter availability for the facility of 99.1%. Generation for this third quarter of 2014 was 32,264 megawatt-hours, for a total generation for the first nine months 2014 of 128,945 megawatt-hours. This compares to 101,989 megawatt-hours for the first nine months of 2013, reflecting a 26% increase over the prior year period. Under the terms of our Power Purchase Agreement (“PPA”), generation for July, and August were paid at the seasonally adjusted price of $123.34 per megawatt-hour and September was paid at the average 2014 contract price of $102.78 per megawatt-hour.
San Emidio, Nevada
The plant continues to operate well, with third quarter availability of 96.1%. Generation for the third quarter of 2014 was 18,240 megawatt-hours, for a total generation for the first nine months 2014 of 55,150 megawatt-hours. This compares to 55,585 megawatt-hours for the first nine months of 2013. Inclusion of higher temperature brine from well 61-21 in late September is expected to result in a moderate increase in power generation at the Phase I plant.
Under the terms of our PPA, generation during the quarter was paid at the price of $91.18 per megawatt-hour. There is no seasonal adjustment under this power purchase agreement.
Raft River, Idaho
The plant continues to operate well, with third quarter availability of 99.7%. Generation for this third quarter of 2014 was 18,500 megawatt-hours, for a total generation for the first nine months 2014 of 58,181 megawatt-hours. This compares to 55,610 megawatt-hours for the first nine months of 2013, reflecting a 5% increase over the prior year period. Under the terms of our Power Purchase Agreement (“PPA”), generation for July and August were paid at the seasonally adjusted price of $72.86 per megawatt-hour and September was paid at the average 2014 contract price of $60.72 per megawatt-hour. In addition to the price paid for energy, Raft River currently receives $4.75 per megawatt-hour under a separate contract for the sale of Renewable Energy Credits.
“Our operations team has done an outstanding job during this first three-quarters of the year focusing on maximizing production from all of our facilities. Our units are all performing with exceptionally high availabilities, and with output that is at or above what we had expected. The total generation from all of our units for the first nine-months of 2014 was 242,276 megawatt-hours, compared to 213,184 megawatt-hours for the first nine-months of 2013, reflecting a 14% increase over the prior year period”, said Dennis Gilles, Chief Executive Officer of U.S. Geothermal. “As a result of this strong performance, we anticipate our projected year-end results should be at the higher end of the guidance range previously provided.”
DEVELOPMENT
El Ceibillo, Guatemala
The final lease for surface use of a 97 acre parcel was signed on October 15. Construction of a drill pad, pond and cellar for EC-2, our new well, has been 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. We are optimistic that we will receive approval of our application shortly.
San Emidio, Nevada
To further define the resource and confirm that it can support the Phase II plant, a drill rig was mobilized to the site on June 26th. Two additional wells were completed on the BLM administered land. Well OW-14 was drilled to a depth of 3,501 feet and had a bottomhole temperature of 265°F. Well OW 15 was drilled to a depth of 3,716 feet and had a maximum downhole temperature of 300°F. 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). Geologic, geochemical and temperature data generated by the drilling program is being evaluated to determine the next phase of drilling. A cross tie pipeline was installed during September between the San Emidio Phase I and Phase II projects. Well 61-21 has been connected and is producing 630 gpm of 298°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.
A Request for Proposal (“RFP”) from NV Energy for 100 megawatts of renewable energy was issued on October 1st. We are evaluating the RFP requirements and anticipate submitting a bid for the Phase II project if it qualifies. In parallel, we are investigating pursuing a power purchase agreement with California power off-takers, where power prices are typically higher.
WGP Geysers, California
We continue to evaluate the detailed design and project costs for two development scenarios:
1) Build a new power plant and sell electricity, or
2) Build pipelines and sell steam.
Discussions are underway with counterparties for both scenarios, and we are reviewing several California based renewable energy contract solicitations for which the project may qualify. Designs for each scenario are being optimized,
and we are refining our detailed cost estimates and associated economic models.
Preparation is underway to continue evaluation of the Gerlach resource with the deepening of well 18- 10A. Drilling is planned to start by early November. The 18-10A well was drilled to a depth of 1,900 feet in 2010, but was not completed at the time. The current drilling plan has a permitted depth of up to 3,000 feet. The original 18-10 well was drilled to a total depth of 2,868 feet in 1994 but was plugged and abandoned in 2006, before we acquired the property. The original well encountered a very promising, total lost circulation zone at a depth of 2,788 feet, but the well was not flow tested and the resource temperature is undetermined. The U.S. Geological Survey considered the Gerlach resource to be the 3rd largest geothermal resource in the state of Nevada in their Assessment of Geothermal Resources of the United States published in l975.
MERGERS AND ACQUISITIONS
Our focus on M&A activities remains very active. As noted previously, we announced the merger of Earth Power Resources (“EPR”) into U.S. Geothermal on October 16. The merger is expected to close by the end of November 2014 following approval of EPR shareholders. The EPR acquisition adds high
quality projects to the company’s pipeline. We are continuing due diligence on a number of other excellent opportunities that encompass operating projects, advanced development projects and green field opportunities.
To read the full Press Release in PDF, please follow the link
Source: US Geothermal Inc
