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5 Years : From Jun 2011 to Jun 2016
Ram Power, Corp. (TSX: RPG) ("Ram Power" or the "Company"), a renewable energy company focused on the development, production and sale of electricity from geothermal energy, is pleased to provide the following update on the progress at the Company's 72 MW expansion of the San Jacinto-Tizate geothermal power project (the "Project").
Power Sales Tariff Increase has been Registered and is Effective
As recently disclosed, the Company received approval from the Nicaraguan Government for a power sales tariff increase under its power purchase agreement for the Project. The tariff increase has been registered by the Nicaraguan Energy Institute and the Nicaraguan electricity grid operator, Centro Nacional de Despacho de Cargo, and is in effect for power sold from the Project on or after October 1, 2012.
Phase II Expansion Update
The Phase II, 36 MW net expansion continues to be constructed on time and on budget, with construction activities 95% complete, power plant critical component engineering 100% complete and plant engineering 99% complete. The Phase II main transformer was successfully energized and plant pre-commissioning activities are ongoing. The unit is expected to be in commercial operation in December 2012.
Update on San Jacinto Steamfield and Initial Electricity Production
The Company and its resource consultant, Sinclair Knight Merz ("SKM"), continue to investigate ways to further expand the resource of the Project in order to maximize the overall project returns. As a result, the Company and SKM have developed short-term and medium-term resource production enhancement plans to increase the steam capacity for the Project.
The Company and SKM are currently estimating that initial total steam availability for the Project will be in the 500-530 tonnes/hour range. This estimate is based on current production trends for Phase I of the Project and field monitoring results indicating the stabilization of the reservoir pressure following the substantial increase of production associated with the commercial operation of Phase I. A recent report from the Phase II lenders resource consultant, GeothermEx Inc., is consistent with this estimate. At this initial steam availability level initial electricity production is estimated to be 60-64MW net for the Project once Phase II is in commercial operation.
The Company is currently executing its short-term production enhancement plan with expected completion by the end of the year. The 2012 Plan (the "2012 Plan") includes, among other things, the conversion of well SJ 6-1 from an injection well to a production well and use of well SJ 12-1 as an injection well. The successful completion of the 2012 Plan is estimated to increase steam availability by 30-40 tonnes/hour, raising the total steam availability to 530-570 tonnes/hour, which would increase estimated initial electricity production approximately 4-5 MW net for the Project once Phase II is in commercial operation.
The Company plans to reassess the production capacity of the San Jacinto steamfield in the first several months after Phase II is placed in commercial operation. During this period, additional geo-scientific and reservoir data collection and analysis will permit the Company to make decisions regarding further production enhancement activities in order to optimize long term reservoir management and utilization. The Company and SKM have tentatively determined, under the medium-term production enhancement plan that deepening, forking and perforating the casing of well SJ 9-3 is the highest priority option for production enhancement based on technical, cost and operational factors. These activities are estimated to increase the steam availability at San Jacinto by approximately 70-110 tonnes/hour, enabling the Project to run at its full 72MW net capacity, and to be funded primarily from the Project's major maintenance reserves established under the Phase I and II Credit Facilities.
Shuman Moore, Ram Power's President and CEO, stated, "I am proud of the Ram and PENSA teams for their continued success in completing critical milestones for our Company, especially over the last several months. The tariff increase provides a critical level of margin allowing the Company to focus on the completion of the Phase II expansion at San Jacinto, and diligently execute its steamfield improvement plans while meeting all its loan covenants."
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.
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, revenue and production costs, 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 the Company's Annual Information Form. 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. Other than as required by applicable securities laws, Ram Power assumes no obligation to update or revise the information contained in this news release to reflect new events or circumstances.
Director of Investor Relations
Ram Power, Corp.
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