I forgot to get this out yesterday, but it was announced that Nevada Geothermal Power (OTCBB: NGLPF) and Ormat Nevada Inc., a wholly-owned subsidiary of Ormat Technologies (ORA) signed an agreement letter to jointly develop and own under a LLC company one or more geothermal power plants at the Crump Geyser Project in Lake Country, Oregon. The 50/50 joint venture plans to begin construction and drill at least one development well for the first power plant this year and hope to have one power plant up and running by the end of 2013 in order to qualify for a government grant.
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Ormat will fund 100% of the initial development in the amount of $15 million while NGP provides technical and engineering data along with existing permits. Ormat will pay NGP installments of $2.5 million over a three year period. Once the development period is complete the companies will share the costs, but NGP will be at least partially financed by Ormat up to another $15 million. Ormat will act as the EPC contractor and be responsible for all development, plant operations and management services. This is sounding more and more like one heck of a deal for Nevada Geothermal!
“We are happy to join forces again with Nevada Geothermal Power, building on the strong relationship the two companies established when Ormat provided the EPC for NGP’s Blue Mountain Project,” said Yoram Bronicki, President and Chief Operating Officer of Ormat Technologies, Inc. “The CGC project increases Ormat’s portfolio of projects that are eligible for the ITC/Treasury Cash Grant program, and gives us access to a strong geothermal resource. We look forward to working with NGP as our partner to bring this project on-line as quickly as possible.”
Technically shares of both ORA and NGLPF are looking to emerge out of long bases and making progress. NGLPF is actually showing a decent amount of momentum down here and is offering a compelling entry point. ORA is struggling a bit more but will one day offer a terrific entry point in a geothermal leader.
Disclaimer: no position in either company
the 10 million new shares NGP diluted have yet to come to market which might pressure NGP price short term! Having Ormat as a partner big help for NGP long term!
Good, hope that does create nice buying opportunity of NGP. I like the opportunity down here even without the dilution.