Polaris Geothermal Inc.
TSX : GEO

Polaris Geothermal Inc.

February 29, 2008 18:58 ET

Polaris Geothermal Inc.: Well SJ9-1 Production Test-Successful Results

TORONTO, ONTARIO--(Marketwire - Feb. 29, 2008) - Polaris Geothermal Inc. ("Polaris Geothermal" or the "Company"), (TSX:GEO) a renewable energy geothermal power producer, is pleased to announce two milestones for the project.

Well SJ9-1 Production Test-Successful Results

Testing of well SJ9-1 at the San Jacinto - Tizate field in Nicaragua is showing excellent results. Preliminary tests of the potential of the well indicate that it has a production capacity of 16 MW. The well is a standard diameter (7" production liner), deviated well which was completed to a depth of 1200 meters on November 21, 2007. Since that time, the well has been reheating while the rig remained on the pad completing an adjacent well, SJ9-2. Testing commenced last week after the rig was released and moved to another pad to drill injection well SJ10-1. Well SJ9-1 was discharged under the supervision of Sinclair Knight Mertz (SKM) of Auckland, New Zealand, the independent geoscientific consultant of Polaris. The well was discharged on Thursday, February 28 for 5 hours and measurements during the discharge test show that the well produces up to 500 tonnes per hour of steam and water at a wellhead pressure of 12 barg. At this flow rate the well will supply sufficient steam to produce an estimated 16 MW of electricity. The feed zones have an average temperature of about 265 degreesC, and the reservoir is liquid dominated with a low gas content. Previous surveys indicate that the fluid comes from several permeable zones between about 730m and 1100m. This is consistent with other production wells presently in use, providing steam for the existing 10 MW plant which has been in operation for the past two and half years. Testing of Well SJ9-2 will take place during coming months after it has had sufficient time for reheating.

Exorka International - Kalina Binary Cycle Plant

Kalina technology could increase production by 11 MW without the need to drill new wells

Polaris is also pleased to announce that in accordance with its press release dated September 19, 2007, it has received a turn-key proposal from Exorka for the supply and installation of a Kalina Binary Cycle Power Plant. The new installation will utilize geothermal fluids from Polaris' existing Phase I - 10 MW Back Pressure Units operation and its proposed Phase I Modular Condensing Turbine expansion up to 34 MW to potentially generate an additional 11 MW of power without the need to drill any further wells. At the present time the parties are negotiating agreement on contractual terms.

Exorka will now be proceeding with necessary brine testing work to finalize design details while Polaris analyzes the proposed capital costs and completes technical and operating due diligence as part of the contract negotiations. It is expected that these activities will requires several months to complete.

Tom Ogryzlo, President & CEO of Polaris, stated:

"Our new SJ9-1 production well is the first one completed as part of our expansion program. Preliminary tests show SJ9-1 to be the most productive of our four existing wells and we now have approximately 36 MW of proven steam under well head. This is over 50% of the total steam requirement for the full development of the eastern sector of San Jacinto and confirms our expectations for the reservoir.

"As an Exorka shareholder, we are extremely pleased to be a key participant in the development of this leading edge technology which may increase the production of our San Jacinto field by 25%. The Kalina Cycle Plant proposed for San Jacinto has the potential to provide an additional 11 MW of generating capacity at the completion of our Phase I - 34 MW expansion and an additional 22 MW when the Phase II - 72 MW expansion is completed."

Company Highlights:

Polaris Geothermal has been operating at an installed capacity of 10MW since 2005 and is expanding to 34MW.

Polaris Geothermal has been registered with the United Nations for almost two years as one of the largest Carbon Emissions Reduction producers in the world.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. All dollars in this release are in Canadian funds.

FORWARD-LOOKING STATEMENTS

This press release includes certain "forward-looking statements". Statements respecting the ability of the Company to successfully generate 16 MW from production well SJ9-1, to test SJ9-2, to successfully complete negotiations with Exorka upon satisfactory terms and conditions, to complete the proposed expansion to Phase I - 34 MW and to obtain additional production from the proposed Kalina Cycle Plant are forward looking statements that 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. All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are "forward-looking statements". We caution you that such "forward looking statements" involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include unpredictable results of exploration activities, uncertainties inherent in the estimation of geothermal resources, fluctuations in the costs of goods and services, problems associated with production operations, changes in legal, social or political conditions in the jurisdictions where the Company operates, lack of appropriate funding and other risk factors, as discussed in the Company's filings with Canadian securities regulatory agencies. The Company expressly disclaims any obligation to update any forward-looking statements.

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