Jun. 9, 2011 (Marketwire Canada) —
RENO, NV–(Marketwire – June 09, 2011) – 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, announced today the successful production test results of well SJ 12-2 at its San Jacinto-Tizate geothermal project in Nicaragua.
The Company completed the initial drilling of well SJ 12-2 in January 2011 and completed a forked leg of the well in April 2011. Under the direction of Sinclair Knight Merz (“SKM”), a leading global consulting firm in the geothermal industry, the well was flowed for a 14 day period to allow for stabilization. Following stabilization, a two-day flow test of the SJ 12-2 well including the initial leg and the subsequent forked leg demonstrated that the well has the individual capacity to deliver initially 156 t/h of steam and 209 t/h of brine at the design separation pressure of 6.1 bar-a. Based on the production test results and plant design, management estimates the capacity of the SJ 12-2 well to be approximately 20 MW (gross).
GeothermEx, Inc. (a Schlumberger Company), the independent resource consultant for the Lenders under the Phase II Credit Facility, was present to observe and confirm the production test results. Polaris Energy Nicaragua, S.A., a subsidiary of Ram Power, has a $160 million debt facility in place (the “Phase II Credit Facility”) to finance the Phase II expansion which consists of $140 million in senior construction and term loans and $20 million in subordinated debt. Access to the Phase II Credit Facility requires that GeothermEx certify that the steam field reservoir capacity for the Phase II expansion is sufficient to achieve power generation capacity at the design plant capacity factor and efficiency.
With the demonstrated production of the SJ 12-2 well, management estimates the current proven production capacity of the San Jacinto Project to be approximately 79 MW gross. The additional capacity of SJ 12-2 has increased the current production level significantly above the Phase II Credit Facility minimum resource requirement of 65 MW and provides the Company access to borrow under both the senior construction and term loans and the subordinated debt under the Phase II Credit Facility. The Company is working with the Phase II Credit Facility lenders to satisfy the remaining conditions precedent to borrowing under the Phase II Credit Facility and is targeting an initial draw in July 2011.
Walt Higgins, Interim President and CEO of Ram Power, stated, “Well SJ 12-2 has the second highest flow rate of any well drilled at the San Jacinto-Tizate geothermal project. This prolific well is a direct result of the Board’s action to change the Company’s drilling protocol and to reappoint SKM to oversee the San Jacinto drilling program. With the successful production test results of well SJ 12-2, we will have the resource requirement necessary to access significant liquidity under the Phase II Credit facility. We will now look to complete the Phase II San Jacinto Resource Development Plan which targets 82 MW (gross) by turning our attention to the remaining drilling and injection strategies.”
About Ram Power
Ram Power is a renewable energy company based in Reno, Nevada, engaged in the business of acquiring, exploring, developing, and operating geothermal properties. Ram Power has an interest in geothermal projects, primarily in the United States, Canada, and Latin America.
This press release contains “forward-looking information” within the meaning of applicable securities laws including information regarding the business of Ram Power. Readers are cautioned not to place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by this information. The statements in this press release are made as of the date of this release. Ram Power undertakes no obligation to update forward-looking information, other than as required by law, or comment on analyses, expectations or statements made by third parties in respect of Ram Power, or its financial or operating results or its securities.
Ram Power, Corp.