Ormat boosts its exploration

Ormat Technologies Inc. is stepping up its search for geothermal sites that could be used to drive electric generation plants.

The Reno-based company said last week it is doing exploration activity on nine properties in Nevada. Ormat won bidding last summer for geothermal leases on nearly 69,000 acres of federal land in the state.

Three of the Nevada properties under exploration Buffalo Valley, Carson Lake and Grass Valley appear to have strong potential, said Yoram Bronicki, Ormat's president and chief operating officer. Each might support plants that would generate between 18 and 30 megawatts of power, he said.

But Dita Bronicki, Ormat's chief executive officer, said investors shouldn't assume that all the exploration will lead to commercial production. "Some of them turn out to be zero," she said.

To speed the exploration process and control its costs, Ormat has acquired two drilling rigs and intends to buy a third, Yoram Bronicki said. The company's exploration program is budgeted at $61 million through 2009.

Along with developing its own sites for geothermal power, Ormat also sells equipment to other developers. In recent days, it nailed down a $20 million contract to provide gear to Nevada Geothermal Power Inc. as it develops its Blue Mountain geothermal plant in Humboldt County. Ultimately, Yoram Bronicki said, that contract could add some $56 million to Ormat's backlog of orders.

The company also is negotiating three power-product agreements with utilities unnamed as of yet that are interested in buying production from new Ormat-operated geothermal facilities in Nevada.

Construction of new facilities in Nevada, California and elsewhere in the world is likely to carry a $345 million price tag this year, Yoram Bronicki said.

The company just brought on-line another 13 megawatts of production from its Galena III plant at the south edge of Reno.

The publicly held company earned $8.9 million in the fourth quarter of last year compared with $4.2 million a year earlier. Revenues of $70.6 million during the quarter were up 6 percent from year-earlier figures.

Ormat will pay a dividend of 5 cents a share on March 27.