BOISE, IDAHO--(Marketwired - April 29, 2015) - U.S. Geothermal Inc. (TSX:GTH)(NYSE MKT:HTM), a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy, provides this update on the results of its three operating projects for the first quarter of 2015, and the status of development activities.
OPERATIONS
Our three operating plants produced 95,926 megawatt-hours during the first quarter, which compares to 98,884 megawatt-hours during the first quarter of 2014, a 3% reduction in generation. Mild winter temperatures across the west, which averaged 6-7°F warmer than normal during the quarter, reduced generation during the period. Planned annual maintenance outages for all three facilities will take place during the second quarter.
Neal Hot Springs, Oregon
First quarter availability for the facility was 96.9%. The vaporizer on Unit 3 suffered plugged tubes from scale during January that required 181 hours (7.5 days) of outage to repair. Generation for the first quarter was 53,500 megawatt-hours, with average generation of 25.56 net megawatts per hour of operation. This compares to 56,047 megawatt-hours for the first quarter of 2014.
Under the terms of our Power Purchase Agreement ("PPA"), the average contract price for 2015 is $106.79 per megawatt-hour. January and February were paid at the average contract price, while March was paid at a seasonally adjusted price of $78.28 per megawatt-hour.
San Emidio, Nevada
The plant performance was again exceptional, with first quarter availability of 99.9%. Total generation for the first quarter was 21,754 megawatt-hours with average generation of 10.1 net megawatts per hour of operation. This compares to 21,223 megawatt-hours for the first quarter of 2014. Despite the warmer than normal weather, San Emidio was able to generate above last year's first quarter due to the addition of hotter fluid from Phase II well 61-21 which began production in September 2014.
Under the terms of our PPA, generation during 2015 will be paid at the average contract price of $92.08 per megawatt-hour. There is no seasonal adjustment under this power purchase agreement.
Raft River, Idaho
The plant performance was also exceptional, with first quarter availability of 99.7%. Total generation for the first quarter was 20,672 megawatt-hours with average generation of 9.60 net megawatts per hour of operation. This compares to 21,614 megawatt-hours for the first quarter of 2014.
Under the terms of our PPA, January and February generation was paid at the average contract price for 2015 of $62.00 per megawatt-hour, while March was paid at the seasonally adjusted price of $45.57. 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, with the Company preferentially receiving 70% of the REC income.
DEVELOPMENT
WGP Geysers, California
Engineering optimization of the power plant design is continuing with a focus on the new hybrid plant design that includes both water and air cooling. This design 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.
An updated steam reserve estimate, which incorporated the past five years of wellfield pressure data and the increased injection rate from the hybrid plant design, was completed in March by an independent geothermal reservoir consulting firm. The report supports past analysis that the project has 30 megawatts gross steam capacity already behind pipe and that a 27.4 net megawatt plant can be supported for a 20-30 year project life. A detailed reservoir analysis will be prepared upon completion of the flow test planned for this spring. Upon completion of the reservoir analysis and power plant optimization, the size of the new plant will be finalized.
The flow test program was designed by the same independent consulting firm, and preparations are underway to run the test during the second quarter. The three wells with the best steam production will be tested at three different flow rates to determine the reservoir pressure characteristics. Steam samples will be taken to determine the various components of the steam for plant design purposes.
Our new transmission interconnection application was accepted by the California Independent System Operator and has now entered the evaluation process. The 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.
In addition to pursuing a PPA, with associated construction of a power plant, we continue to pursue a steam sale agreement.
San Emidio Phase II, Nevada
Permitting 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 investigate this portion of the resource.
NV Energy issued a Request for Proposal ("RFP") 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") to combine the 2014 solicitation with the 2015 solicitation for a total of 200 megawatts to be procured in 2014. An alternative option for Phase II that incorporated a water cooled plant was submitted to NV Energy on February 16th, and on March 3rd we were notified that our bid was advanced to the initial short list of projects. NV Energy has not announced the final short list for this round of bidding.
El Ceibillo, Guatemala
The modified development schedule has received approval from the legal, technical, environmental, and mining departments of the Guatemalan Ministry of Energy and Mines ("MEM"), and the Vice-Minister of MEM has approved the new schedule as well. Final paperwork is being prepared for the Minister's signature and his approval is expected in the near term. Once the modified development schedule has received final approval, we intend to commence drilling well EC-2, which is targeted at the high temperature anomaly defined by the 2014 temperature gradient drilling program.
Crescent Valley, Nevada
Well CVP-001 (67-3) was completed on March 27th to a depth of 2,746 feet. The well exhibited modest permeability making the well suitable for duty as an injection well. The next phase of drilling is currently in the planning process.
Neal Hot Springs, Oregon
The drilling of a water supply well that would be used for hybrid cooling is planned for early May. If the well finds an adequate flow of fresh water, it will be tested and determined if the aquifer can provide enough water 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 significant reduction in plant output.
MERGERS AND ACQUISITIONS
Our focus on M&A activities remains very active. We are continuing due diligence on a number of excellent opportunities that encompass operating projects, advanced development projects and green field opportunities.
"During the first quarter, our operations team continued to do an outstanding job of providing high operational availability at all of our facilities", said Dennis Gilles, Chief Executive Officer of U.S. Geothermal. "Our optimism for growth this year remains high considering the numerous opportunities we are evaluating."
About U.S. Geothermal Inc.:
U.S. Geothermal Inc. is a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy and is operating geothermal power projects Neal Hot Springs, Oregon; San Emidio, Nevada; and Raft River, Idaho. The company is currently developing a project at the Geysers, California, a second phase project at San Emidio, Nevada, a project at Crescent Valley, Nevada, and a project at El Ceibillo, in Guatemala.
The information provided in this news release may contain forward-looking statements within the definition of the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Readers are cautioned to review the risk factors identified by the company in its filings with US and Canadian securities agencies. All statements, other than statements of historical fact, included herein, without limitation, statements relating to the future operating or financial performance of U.S. Geothermal, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or "should" occur or be achieved. These forward-looking statements may include statements regarding perceived merit of properties; interpretation of the results of well tests; project development; resource megawatt capacity; capital expenditures; timelines; strategic plans; or other statements that are not statements of fact. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from U.S. Geothermal's expectations include the uncertainties involving the availability of financing in the debt and capital markets; uncertainties involved in the interpretation of results of well tests; the need for cooperation of government agencies in the development and operation of properties; the need to obtain permits and governmental approvals; risks of construction; unexpected cost increases, which could include significant increases in estimated capital and operating costs; and other risks and uncertainties disclosed in U.S. Geothermal's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the United States Securities and Exchange Commission and Canadian securities regulatory authorities and in other U.S. Geothermal reports and documents filed with applicable securities regulatory authorities from time to time. Forward-looking statements are based on management's expectations, beliefs and opinions on the date the statements are made. U.S. Geothermal Inc. assumes no obligation to update forward-looking statements if management's expectations, beliefs, or opinions, or other factors, should change.
The NYSE MKT and the TSX do not accept responsibility for the adequacy of this release.
