BOISE, IDAHO--(Marketwire - Oct. 29, 2012) - 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, announced today that its wholly owned subsidiary, U.S. Geothermal Guatemala, S.A., signed a binding Memorandum of Understanding ("MOU") with one of the largest distributors of electricity in Central America to negotiate a power purchase agreement ("PPA") for the El Ceibillo Project located near Guatemala City.
The MOU establishes the framework for a PPA that includes a 15-year term for up to 50 megawatts of power generation each year. The MOU includes a project power price that is competitive with the prevailing energy prices in the region. As published by Guatemala's wholesale market administrator, this year's average monthly spot power price through September is more than $145.00 per megawatt-hour. Several conditions precedent must be met before the PPA becomes effective including confirming the geothermal reservoir by an independent reservoir engineer, obtaining all required permits and authorizations, and securing a project finance commitment.
Daniel Kunz, Chief Executive Officer of U.S. Geothermal Inc., said, "This MOU is the framework for a PPA that will provide the necessary conditions to secure long term project finance and create attractive project economics. El Ceibillo is an important energy project that will expand Guatemala's use of renewable energy and lessen its dependence on imported fossil fuels."
El Ceibillo is an advanced stage geothermal prospect located within a 24,710 acre (100 square kilometers) energy rights concession area, and is located near a major transmission line in an industrial area approximately 8.5 miles (14 kilometers) southwest of Guatemala City, the largest city in Central America. Nine wells were drilled at El Ceibillo during the l990's, to depths ranging from 560 to 2,000 feet (170-610 meters). Six of the wells have measured temperatures of 365°F to 400°F (185°C to 204°C). These six wells have high conductive thermal gradients that indicate rapidly increasing temperatures with depth. By re-entering and deepening several existing wells, and drilling new ones, the Company's planned exploration program targets a deeper, higher-permeability reservoir with an expected production temperature between 410°F to 446°F (210°C to 230°C). An initial 25-megawatt power plant utilizing double flash steam technology is planned. The project is currently expected to achieve production in late 2015, subject to successful drilling and financing.
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About U.S. Geothermal Inc.:
U.S. Geothermal Inc. is a leading renewable energy development company that is operating geothermal power projects at Raft River, Idaho and San Emidio, Nevada. The Neal Hot Springs project, located in eastern Oregon, is currently in startup mode and will be the company's third operating power project. The company holds geothermal energy rights to 69,500 acres comprising six advanced stage geothermal development projects.
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. These statements are based on U.S. Geothermal Inc.'s current expectations and beliefs and are subject to a number of risks and uncertainties that can cause actual results to differ materially from those described, including but not limited to, the results from the exploration, production and injection well drilling at El Ceibillo. Readers are cautioned to review the risk factors identified by the company in its filings with Canadian and US securities agencies. 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.
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