SOURCE: Ram Power, Corp.

Ram Power, Corp.

November 15, 2010 17:44 ET

Ram Power Announces 2010 Third Quarter Results

RENO, NV--(Marketwire - November 15, 2010) - Ram Power, Corp. (TSX: RPG) ("Ram Power" or the "Company"), today reported its financial and operating results for the third quarter ended September 30, 2010. This earnings release should be read in conjunction with Ram Power's MD&A and financial statements, which are available on the Company's website at and have been posted on SEDAR at

Concurrent with today's release, Hezy Ram, CEO of Ram Power, said, "The third quarter 2010 has been another rewarding and growth oriented quarter. Early in the quarter, we completed the Mayacamas Energy transaction thereby ensuring the development of our Geysers project in Northern California. Additionally, in the later part of the quarter, we completed the Sierra Geothermal Power, Inc. acquisition which adds additional exploration properties to our existing geothermal projects in Clayton Valley, Nevada. Finally, subsequent to the quarter end, the closing of the San Jacinto-Tizate Phase II Credit Facility ensures the build out of the 72 MW facility in Nicaragua, supplying clean, renewable energy to the region for years to come. Further, the Company enhanced our already experienced management team with the additions of John O'Neill as Vice President and Chief Financial Officer and Gordon Alter as Vice President and General Counsel. We continue to be excited about the future of Ram Power."


The financial results of Ram Power for the three and nine months ended September 30, 2010 and 2009 are summarized below:

                      For the       For the
                    Three Months  Three Months  For the Nine  For the Nine
                        Ended         Ended     Months Ended  Months Ended
(All figures in     September 30, September 30, September 30, September 30,
 U.S. dollars)          2010          2009          2010          2009
                    ------------  ------------  ------------  ------------

Total revenue       $    996,227  $  1,239,603  $  3,052,189  $  3,611,983
Direct cost of
 energy production      (371,283)     (418,027)   (1,274,606)     (993,926)
Expenses              (5,671,797)   (3,527,033)  (16,179,757)   (6,147,378)
Other income (loss)   (1,656,636)  (13,072,487)   (3,418,942)  (19,212,341)
Income tax and
 interest                112,275        70,500       739,883        77,659
Net loss               6,591,214    15,707,444   (17,081,233)  (21,999,408)
Loss per share             (0.04)        (0.16)        (0.12)        (0.26)

                         As at        As at
                     September 30, December 31,
                         2010          2009
                     ------------  ------------

Total assets         447,851,705   370,298,161
Long-term debt, net
 of debt discount     45,569,253       849,688
Total liabilities     93,476,575    28,515,147
Cash and short term
 investments          42,684,091   123,341,372
Working capital       21,428,017   115,150,121

For the purpose of this summary, the results of Polaris Geothermal Inc. for the three and nine months ended September 30, 2009 are used as comparatives because, for accounting purposes, the financial statements of the Company are deemed to be a continuation of the financial statements of Polaris Geothermal Inc.

For the third quarter ended September 30, 2010, the Company reported a net loss of approximately $6.6 million ($0.04 per share). On a cash basis, for the same period, the Company had a negative cash flow of about $4.5 million from operating activities and spent approximately $51.4 million on additions to geothermal properties and capital assets, including approximately $40 million on the Phase I and II San Jacinto-Tizate expansions and approximately $9.1 million on the Orita Project. At September 30, 2010, the Company had cash and short term investments of approximately $42.6 million, and long-term (non recourse) debt, net of debt discount, of approximately $45.6 million.

Phase I & II Expansions of San Jacinto-Tizate

Phase I Expansion:

Construction continued during the third quarter on the Phase I 36 MW expansion of the current operating facility to increase the production capacity to 46 MW with an anticipated commercial operation date in the second quarter of 2011. There is certified production and injection well capacity to support the planned production increase. The Company is using a combination of equity and a $77 million credit facility to fund the $152 million cost of the expansion. The Company had $120 million in accumulated costs, including accruals, related to the Phase I expansion as of September 30, 2010. As of September 30, 2010, the Company satisfied the equity investment requirement for the credit facility and had drawn $47 million of the $77 million available under the facility. The Company held $16.5 million in cash as of September 30, 2010 to be used for payment of the $14.5 million of accounts payable and accruals at period end and other costs related to the Phase I expansion. The additional $2 million of cash on hand and the remaining $30 million to be drawn on the credit facility will be used to fund the remaining $32 million of the Phase I expansion.

Phase II Expansion:

Construction and Financing: Construction continued during the third quarter on the Phase II expansion from 46 MW to 72MW of capacity with an anticipated commercial operation date at the end of the fourth quarter of 2011. On November 4, 2010, the Company entered into a credit facility with a group of development banks led by International Finance Corporation and Inter-American Development Bank to provide the debt financing for the Phase II expansion. The financing consists of $140 million in senior construction and term loans and $20 million in subordinated debt which is available for Phase II contingencies and for general corporate purposes. Phase II is being constructed in parallel to Phase I, and is being financed with cash on hand until the Company can draw on the Phase II credit facility, which is expected to occur in the fourth quarter of 2010. As of September 30, 2010, the Company had invested equity of approximately $37 million in accumulated costs related to the Phase II expansion. Upon the funding of the Phase II Credit Agreement, the Company expects to receive back under conditions precedent approximately $20 million in equity. With the certification of additional geothermal resources for Phase II, the Company will be entitled to draw on the credit facility to recover the remaining portion of its equity investment in Phase II.

Drilling and Exploration: The first exploration/production well, SJ 12-1, completed in July 2010 to the depth of 5,400 ft. had a bottom hole temperature of approximately 500° Fahrenheit with good permeability. Over the past 90 days the well has been undergoing a cleaning process whereby a high-pressure air cap is applied to the well and then intermittently released. The process has been successful in removing drilling debris and improving the overall production quality of the well. The Company anticipates testing and certification of this well in the fourth quarter of 2010. A second production well, SJ 9-3, was completed on August 21, 2010 to a depth of 6,158 ft. A short term flow test was done and the well was deemed a commercial well of 8 MW gross. The Company is currently conducting a long-term flow test on well SJ 9-3 which involves the connection of the well to the project's production piping. The results of this testing will be certified by GeothermEx, Inc. in the fourth quarter of 2010. Drilling of a third production well, SJ 9-2 was started in September 2010 and consisted of the re-drilling of the previously non-commercial SJ 9-2 well. The well was directionally drilled to intersect identified fracture targets. The well was completed to a depth of 6,245 ft. in November 2010 and indicated a very high bottom hole temperature with good permeability. The well is currently being cleaned and tested with the results expected in the fourth quarter 2010.

Geysers Project Update

The Company has been diligently working on finalizing a strategy for the Geysers Project. The project has four completed wells which have an estimated initial resource capacity of 26.1 MW. From August 2009 through June 2010, the Company was approached by two unrelated parties that were interested in either purchasing the resource or entering into a sale of steam from the existing steam field. However, the Company has decided in order to fully maximize the resource it will develop the project internally. Currently, the Company is actively pursuing project financing and is in discussions with engineering, procurement, and a construction contractor for the development of the Geysers Project. It is expected that financing will close in early 2011 with construction to follow. The Company expects the Geysers Project to be completed by 2013.

Orita Exploration Activities

During the quarter ended September 30, 2010, the Company continued its Orita drilling and exploration. As previously disclosed, drilling on the Orita No. 2 well was suspended in July 2010 at a depth of 9,267 ft due to mechanical problems and the well was lined with perforated casing, cleaned and tested. A flow test produced fluids that confirmed the desired low-salinity benign chemistry but only marginal permeability at this depth. The Company, in October 2010 has commenced the partial re-drilling of this well. The drilling plan calls for a drilling depth of up to 14,000 ft. to test known zones of high permeability previously encountered in the Emanuelli #1 well.

In July 2010 drilling commenced on Orita No. 3 well and it was drilled to the targeted depth of approximately 11,800 ft. As of September 2010, the well was completed to the targeted depth and showed significant hydrothermal alteration and had intercepted a major fault controlled low-resistivity zone with loss circulation. Bottom hole temperature of the well was in excess of 450° Fahrenheit. The well was successfully cased to 9,198 ft., however, the perforated liner was damaged during installation and productivity testing could not be successfully completed. The Company will re-evaluate this well once it has the results from the re-drill and testing of Orita No. 2 well.

Mr. Ram concluded, "I am pleased at what we accomplished in the quarter, and continue to be excited about the future for Ram Power. We will continue to develop our San Jacinto-Tizate project, which will deliver clean, renewable geothermal power to the citizens of Nicaragua for the foreseeable future. Our decision to move forward with financing and constructing the Geysers project will greatly enhance our future production and cash-flow. Finally, we continue to be very optimistic about the continued development of our pipeline projects including Orita and our projects in Nevada."

Ram Power, Corp. will hold its earnings call to discuss the Third Quarter 2010 financial and operating results on Tuesday, November 16, 2010 at 10:30am EST (7:30am PST). To listen to the call, please dial 1-866-696-5910 with participant pass code 6454353, or on the web at

About Ram Power, Corp.

Ram Power is a renewable energy company based in Reno, Nevada, engaged in the business of acquiring, exploring, developing, and operating geothermal properties and has interests in geothermal projects in the United States, Canada, and Latin America.

Cautionary Statements

This news release contains certain "forward-looking information" which may include, but is not limited to, statements with respect to future events or future performance, management's expectations regarding the Company's growth, results of operations, estimated future revenues, requirements for additional capital, production costs and revenue, future demand for and prices of electricity, business prospects and opportunities. In addition, statements relating to estimates of recoverable geothermal energy "reserves" or "resources" or energy generation are forward-looking information, as they involve implied assessment, based on certain estimates and assumptions, that the geothermal resources and reserves described can be profitably produced in the future. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "predicts", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. A number of known and unknown risks, uncertainties and other factors may cause the actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current geothermal energy production, development and/or exploration activities and the accuracy of probability simulations prepared to predict prospective geothermal resources; changes in project parameters as plans continue to be refined; possible variations of production rates; failure of plant, equipment or processes to operate as anticipated; accidents, labor disputes and other risks of the geothermal industry; political instability or insurrection or war; labor force availability and turnover; delays in obtaining governmental approvals or in the completion of development or construction activities or in the commencement of operations; as well as those factors discussed in the section entitled "Risk Factors" in this news release. These factors should be considered carefully and readers of this news release should not place undue reliance on forward-looking information.

Although the forward-looking information contained in this news release is based upon what management believes to be reasonable assumptions, there can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Such forward-looking information is made as of the date of this news release and, other than as required by applicable securities laws, Ram Power, Corp. assumes no obligation to update or revise such forward-looking information to reflect new events or circumstances.

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