US Geothermal has acquired from Goldman Sachs the majority of their cash flow interest in and ownership of the up to 13MW Raft River geothermal project in Southeast Idaho.
The company will receive 95% of the cash flow from the project on a going forward basis, along with all increased cash flow from any project improvements.
The project is currently operating at approximately 9.4MW with the electricity sold under a 25-year contract with Idaho Power Company, which allows for the full 13MW output.
Plans are under consideration to drill for additional production to increase plant output to its full contract limit.
The purchase price was $5.1m for the 95% interest, with an option to purchase the balance of Goldman’s interest for fair market value at the end of 2017.
It consisted of a $3.5m cash payment plus a promissory note of $1.6m that bears interest at 8%.
Under the promissory note agreement, $1m of the note may be satisfied with shares of US Geothermal common stock priced at the 10-day weighted average closing price of the common stock at time of conversion if not otherwise paid in cash by 31 March.
US Geothermal chief executive officer Dennis Gilles said: “This agreement with Goldman Sachs is a strong positive for our company.
“It unlocks the ability to consider capital upgrades that should increase output from the facility and potentially reach its design capacity of 13MW.”
Image: Raft River (US Geothermal)
