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Nevada Geothermal Power receives $58m federal grant

1 Dec 2009

Nevada Geothermal Power has received a $57.9m federal grant through its subsidiary, NGP Blue Mountain 1. The grant relates to the successful completion of the Faulkner 1 geothermal plant.

The company said that it would use the funds to pay down TCW debt and to perform new drilling at Blue Mountain.

On 13 November of this year, NGP repaid $30m of the TCW loan. The balance to pay the loan down to approximately $70m is expected to come from a senior debt financing planned with John Hancock Life Insurance Company which is anticipated to close in January 2010, the company said.

NGP has contracted Ensign Drilling to complete three wells, two deep injector wells and one production well, which are designed to increase the Faulkner 1 plant output from the current level of 27MW to greater than 40MW. NGP said that Faulkner 1 plant output could potentially be optimised at around 47MW.

According to NGP, the existing production well field is comprised of six wells, each capable of producing greater than 7MW individually, or greater than 40MW together, however, in order to prevent drawdown of the reservoir, two existing shallow injection wells have to be replaced by two new deep injectors.

‘We are very pleased with smooth performance of the Faulkner 1 plant and of the well field since discontinuing shallow injection,’ said Brian Fairbank, president and CEO. ‘We are embarking on a make-up drilling project that will enable Faulkner 1 to be amongst the largest producing plants in Nevada. I want to thank NGP’s highly capable team and our industry partners for helping make this happen.’

Nevada Geothermal Power currently owns a 100 per cent leasehold interest in Blue Mountain, Pumpernickel, Black Warrior, all of which are ideally situated in Nevada and Crump Geyser in Oregon. These properties are at different levels of exploration and development. NGP estimates a potential of over 200MW from the combined leaseholds.

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