U.S. Geothermal to acquire Geysers project in California

U.S. Geothermal has signed a stock purchase agreement with Ram Power to acquire Geysers project, located within the broader Geysers geothermal field in Sonoma County, California, US, for $6.4m in cash.

Western Geopower, Skyline Geothermal Holdings and Etoile Holdings are the subsidiaries of Ram Power, which are included in the transaction.

The acquired Ram Power subsidiaries own the full development interest in the project, including all geothermal leases in about 3,809 acres, development design plans, and permits for a proposed 26MW power plant, along with the land and geothermal mineral rights ownership of the Mayacamas property purchased by Ram Power in 2010.

The broader Geysers geothermal resource is claimed to be the largest producing geothermal field in the world, which has generated around 850MW of power, since last 30 years.

U.S. Geothermal CEO Dennis Gilles said the acquisition of the project, which includes five completed wells available for immediate production with roughly 30MW of total steam behind pipe is a significant near-term growth opportunity for the company.

"The first involves obtaining a power purchase agreement and constructing a power plant, while the second option involves selling steam to one of several companies currently operating power plants in the Geysers," Gilles added.

The transaction, which is expected to complete in April 2014, is subject to customary closing conditions.

U.S. Geothermal is currently operating geothermal power projects at Neal Hot Springs, Oregon, San Emidio, Nevada and Raft River, Idaho, as well developing a second phase project at San Emidio Nevada.