Ormat: Revenue growth to slow in 2010

Ormat Technologies reported record revenues for 2009 last week, but it cautions that the trend isn't likely to continue this year.

The Reno-based company works the geothermal industry in two ways. It develops its own power plants, a business that's continuing to grow steadily. Revenues generated from its power plants last year totaled just a hair under $256 million, an increase of 1.4 percent from a year earlier.

Ormat also sells equipment to other companies that develop geothermal plants around the world, and revenues from that side of the business climbed by 72 percent last year to $159.4 million.

That figure, however, included contracts on three big geothermal plants including Nevada Geothermal Power's Faulkner 1 plant at Blue Mountain near Winnemucca.

Revenues in the product segment this year will return to normal and are more likely to run between $75 million and $85 million, said Dita Bronicki, Ormat's chief executive officer. The company had a backlog of $90 million in product orders at the start of the year.

Even though the company expects its electricity sales to increase to somewhere in the range of $284 million to $294 million, that won't be enough to overcome the projected decline in sales of geothermal equipment.

Ormat has been buying up exploration leases on geothermal properties in the West and elsewhere around the world. The company said last week test results from several of the sites are promising and should result in commercial geothermal plants during the next year.

A more advanced project is the Hot Sulphur Springs geothermal project in the Independence Valley of northeast Nevada, which Ormat has contracted to purchase. The deal is expected to close early this year, Bronicki said.

The project is planned to become operational in 2012 and has contracted to sell 40 megawatts to NV Energy. Terms of the deal with private equity funds managed by Energy Investors Funds of San Francisco haven't been disclosed.

Because construction of the first phase of the project a plant that would generate 16 megawatts is expected to begin this year, the Hot Sulphur Springs facility would qualify for federal stimulus funding.

It's on about 9,800 acres in Elko County.

Publicly held Ormat said last week that it earned $68.6 million during 2009, including profits of $16.1 million during the fourth quarter. That compares with earnings of $43.3 million in the previous year.

The fourth-quarter earnings translate into 35 cents a share, beating the consensus estimate of 31 cents among analysts surveyed by First Call.

(The company made changes in the way it accounts for exploration and geothermal expenses that resulted in a restatement of its 2008 earnings. The restatement reduced its reported 2008 earnings by $6.2 million.)

Ormat will pay a quarterly dividend of 12 cents a share on March 25 to shareholders of record March 16.

The company, which has a goal of paying a dividend equal to at least 20 percent of its annual net income, said it expects to pay a dividend of 5 cents a share in each of the next three quarters.

Vulcan: Fernley-area drilling back on track

Vulcan Power Co. said last week it's resumed drilling on its Patua geothermal project near Fernley.

The privately held company headquartered at Bend, Ore. received a second equity investment of $108 million from Denham Capital in February, and the financing allowed work to continue.

Vulcan expects that production from the plant would begin in early 2012, and it's projecting that the facility would generate 60 megawatts of electricity. It's negotiating a deal to sell the power to an undisclosed utility.