While at the GRC Annual Meeting last month, one of the interesting talks was about the state of geothermal power production in Mexico. The map below shows the major geothermal fields in the country:

There are primarily 3 active sites producing electricity using geothermal harvest:

• Cerro Prieto – 720 MWe
• Los Humeros – 42 MWe
• Los Azufres – 188 MWe

These areas are divided into the volcanic belt stretching across the middle of the country and the Cerro Prieto which is part of the Imperial Valley/Salton Sea production zones working in the US today. Currently, around 950 MWe are online producing some 6.6 GWh of electricity for Mexico, or about 3.1% of their annual electricity consumption. By 2010, it is expected that an addition 220 MWe will be available (100 MWe Cerro Prieto, 45 MWe Los Humeros, and 75 MWe in Cerritos Colorados.) It is estimated that Mexico has some 8,000 MWe of commercial quality, clearly more exploration and development is possible.

The major geothermal operator in Mexico is CFE. Images from the sites are available below.

Turbine at Cerro Prieto


Binary Plant at Los Azufres


Steam emissions at Los Humeros

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6 month Ormat (ORA) Stock Chart

Today, despite the earlier dilution from a secondary offering on the public market, Ormat’s market capitalization has surged past $2B. That puts the P/E ratio at nearly 95 trailing twelve months. Ormat is a good company in a hot market. But, does the company’s performance justify this sort of premium? Caveat Emptor.

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Ormat, the largest “pure play” geothermal company in the US, yesterday announced that it would place 3 million shares on the public market. This will increase Ormat’s outstanding shares to 41.13M and effectively dilutes current shareholders by 7.8%. Unsurprisingly, the stock price dropped yesterday nearly that same percentage and seems to be creeping up incrementally today. This move should raise over $140M (less underwriter’s fees) to be used for general corporate purposes including paying down debt levels, exploration, and new geothermal plant development.

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This event is upcoming November 14-16 in San Jose. Looking at the agenda, it is geared toward educating financial types about geothermal development and geothermal developers about financing options. The details of the event are available here. There is also a one day pre-session specifically on financing activities. If you’re in the Bay Area or planning to be in the Bay Area, this could be an interesting session to attend.

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Flow test of well 23-14 at Blue Mountain


Last week, Nevada Geothermal Power announced the results of the flow test for their production well, 23-14, on the Blue Mountain property. The well tested out at 10MW gross power and 7.5MW net power when pump assisted and it produced from depths of around 1,000m (~3,300 feet) at temperature of 190C (375F). Armed with this information, the development of the site should now rapidly progress enabling a plant to be operational in the foreseeable future. The last remaining hurdle is transmission, a new line will need to be constructed to deliver the power to the grid.

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