U.S. Geothermal Provides Corporate Update

U.S. Geothermal

provides the following updates on: the construction of its new 8.6 net megawatt ("MW") Phase I power plant and development of its 8.6 net MW Phase II project at San Emidio, Nevada; the progress of construction of its new 22 net MW power plant at Neal Hot Springs, Oregon; the current status of its 13 net MW power plant at Raft River, Idaho; and, activities related to its Guatemala geothermal project. SAN EMIDIO At San Emidio, yesterday the EPC contractor operated and tested the new Phase I power plant in a key trial operation sequence. The plant has already been operated in test mode on several occasions. It has been synchronized to the transmission grid and has generated electricity but there is still unacceptable levels of vibration in the gearbox. The vibration data is under analysis so adjustments can be made. The new plant must complete component commissioning and performance testing prior to achieving commercial operation. The EPC contractor is providing its services under a fixed price contract that includes financial guarantees for the original completion date and power output of the plant. At San Emidio Phase II, the drilling program discovered a new, higher temperature portion of the geothermal reservoir in an area south of the Phase I plant. Work is continuing on the development of new production wells under a ten-well cost sharing grant from the U.S. Department of Energy ("US DOE"). Four of five planned wells, located in the southern part of the project, have already been drilled (OW-6, OW-8, OW-9 and OW-10) with the fifth well (45A-21) currently being drilled. Well OW-10 is the first new production well for the Phase II power plant and produces a flowing temperature of 302 degrees F from a reservoir zone 2,500 feet below the surface. Well OW-8 encountered the highest recorded reservoir temperature in the San Emidio field to date at 320 degrees F and will undergo flow testing to determine zone permeability. Well OW-9 exhibited commercial flow of 280 degrees F from a zone at 2,090 feet. During drilling operations at OW-9, a total lost circulation zone was encountered with 294 degrees F fluid at 1,830 feet, but was sealed off behind casing to allow the drilling to proceed to deeper targets. Testing of the 1,830 foot zone in well OW-9 is planned. Well OW-6 also discovered commercial permeability with a flowing temperature of 279 degrees F at 1,930 feet.