US Geothermal: Egregiously Undervalued?

by Debra Fiakas CFA Last week US Geothermal (HTM:  AMEX), a power generator from geothermal projects in California, Oregon, Nevada and Idaho, made an appearance at the Marcum Microcap Conference in New York City.  The company stood out among most of the companies appearing in Marcum’s so-called ‘energy track’ as one of the few with solid revenue and profits.  US Geothermal reported a net profit of $1.9 million on $28.8 million in total sales in the twelve months ending March 2014.  The net profit is commendable, but what I find more interesting is the conversion of 30%...

US Geothermal: A Knack For Hot Rocks

by Debra Fiakas CFA U.S. Geothermal (HTM:  AMEX) is scheduled to report third quarter 2013 financial results on November 15th, taking every day allowed to a public company to reveal the fruits and labors of a quarter.  There will be plenty to talk about in the conference call with analysts and investors.  USG closed a loan financing to support the first phase of its San Emidio geothermal power project in Nevada.  The loan valued at $30.7 million bears a fixed interest burden of 6.75% will replace a $25 million construction loan for the project and supply working capital...

Waterfurnace 7 Series vs. Climatemaster Trilogy Geothermal Heat Pumps: The Best of the Best

UPDATE: I just looked into the 7 Series vs the Trilogy 40 in more detail here and came to a slightly different conclusion. Tom Konrad CFA Geothermal heat pump diagram via Bigstock Waterfurnace Renewable Energy (TSX:WFI, OTC:WFIFF) launched its new highly efficient 7 Series geothermal heat pumps (GHP) today.  The 7 Series commercial release beats Climatemaster’s (a division of LSB Industries (NYSE:LXU)) Trilogy 40 as the first commercially available GHP with a variable speed compressor.  The Trilogy 40 is currently available as part of a pilot program, and is expected to be commercially available...

Nevada Geothermal Power Inc. Commences Blue Mountain Development Drilling

Nevada Geothermal Power Inc. (NGLPF) announced that it has initiated development drilling at Blue Mountain Nevada. Production test data from the wells will be used to complete a feasibility study for an initial 30 MW geothermal power plant. In the initial program, four 13-inch diameter production wells will be drilled to 4000 feet (1200 metres) into the moderate temperature (300-330 degrees C) geothermal resource intersected in previous test holes. Permits have been obtained and drill pads are under construction. A water well rig will be used to drill the top 800 feet of each well and to...

Geothermal Stocks Overview

Tom Konrad CFA Geothermal power generation has several advantages over higher profile alternative energy such as wind and solar, but gets much less attention.  Part of the lack of recognition for Geothermal power arises from a confusion with the technology variously called Geoexchange, Ground Source Heat Pump, or Geothermal Heat Pumps.  Geoexchange uses the near constant temperature of the soil a few feet to a few hundred feet below the ground to heat and cool a building.  According to the Environmental Protection Agency, Geoexchange is the most efficient way to heat and cool a building, and...

Nevada Geothermal Begins Mapping of Deep Geothermal Source Waters at Pumpernickel Site

Nevada Geothermal Power Inc. (NGLPF) reported that exploration work at the Pumpernickel Geothermal Project (5710 acres/8.92 square miles) is underway. In Phase I - 3D "E-SCAN", resistivity survey methods will be utilized to map the deep geothermal source waters feeding surface hot springs. Results are expected in four weeks. Subsequently a series of six 250-meter (820 foot) gradient wells will be drilled to test the interpretation of the E-SCAN survey.

Closing the Geothermal Loop

by Debra Fiakas CFA Calpine Plant at The Geysers.  Photo Source: Calpine In the article “Is Ormat Technologies Misunderstood?”, I outlined a few performance measurement issues, but left out of the story Ormat’s position in the relative position in the geothermal industry.  Naturally I received comments from readers about why I made no comparison of Ormat to Calpine Corporation (CPN:  NYSE), the largest U.S. generator of electrical power using geothermal sources.  On a go-forward basis Calpine shares are valued about the same as Ormat Technologies,...

Ormat Technologies: Shame About the Price

Tom Konrad CFA Ormat Heat exchanger at GKW Landau. Geothermal water evaporates the carrier medium. Preheater and the evaporator. The steam line above connects to the turbine. Photo by Claus Ableiter via Wikimedia Commons Last Wednesday, Ormat Technologies (NYSE:ORA) reported a great quarter, beating analyst expectations for both earnings and revenues. Investors loved it: ORA was up 8% on the day to $20.69, and are up 14% at $21.85 as I write. I’m a big fan of geothermal power, and would love to own Ormat at the right...

The Efficiency Tango: A Deeper Look at Geothermal Heat Pump Efficiency

Tom Konrad CFA Geothermal heat pump diagram via Bigstock A couple weeks ago, I compared the efficiency of the two most advanced geothermal heat pumps (GHPs) recently launched by Waterfurnace Renewable Energy (TSX:WFI, OTC:WFIFF) and Climatemaster, as division of LSB Industries (NYSE:LXU).  Like most things in life, it turns out that heat pump efficiency is a lot more complicated than just comparing a couple numbers. Since I concluded that Waterfurnace’s 7  Series heat pumps were slightly more efficient than Climatemaster’s Trilogy 40 pumps, one of Climatemaster’s district managers pointed me...

Geothermal Tie-up

Ormat Technologies (ORA:  NYSE) is buying U.S. Geothermal (HTM:  NYSE) for $5.45 per share in cash.   The offer represents a 29% premium to the HTM closing price the day prior to the announcement.  The shares had been in a steady decline over the past several months, hitting a 52-week low of $3.11 earlier in January 2018.  So while the offer price pales in comparison to the U.S. Geothermal’s all-time high stock price of $28.68 way back in October 2007, shareholders may be feeling a warm breeze coming off Ormat’s cash. Should Ormat shareholders be as thrilled as the company ponies up $110 million...

Pennsylvania to Generate 3,600 Megawatts of Wind Power by 2016 Due to New Standard

As mentioned in a previous entry, the Pennsylvania legislature passed SB1030, the Alternative Energy Bill, on November 20, 2004 which will require a total of 18% of Pennsylvania's electricity to be generated by alternative energy sources by 2020. The standard requires 8% of Pennsylvania's electricity to be generated by so-called "Tier I" renewable sources of energy by 2020. Tier I resources include solar, wind, geothermal and biomass. The standard also requires 10% of the state's electricity to come from a second category of resources that include waste coal, integrated combined coal gasification technology, municipal solid waste, large-scale hydro,...

US Geothermal: Wringing Profits From Hot Rocks

by Debra Fiakas CFA Last week I spent the better part of a day listening to presentations of energy companies at the Wall Street Analyst Forum in New York.  Although I had heard the management of  US Geothermal (HTM: NYSE) tell the company’s story before, I was impressed to hear about the progress the company has made in squeezing profits from electricity produced with turbines run by underground steam.  Management called it gratifying! The company reported $31 million in sales in the year 2014, delivering $14.9 million in net income to the bottom line.  That is something...

Ten Solid Clean Energy Companies to Buy on the Cheap: #10 United Technologies

Like most conglomerates, United Technologies Corporation (UTC), (NYSE:UTX) won't be found in any of the Clean Energy indices, but its growing portfolio of clean energy businesses makes it fit well into a diversified portfolio with a clean energy tilt.  A conservative capital structure and solid earnings and cash flow, and a decades long history of constantly increasing dividends make this a company that I'm comfortable holding for the long term.   In terms of sustainability, the company has been recognized by Dow Jones as in the top 10% of the world's most sustainable companies.  Long before it became fashionable for...

Blue Mountain Disappoints; Nevada Geothermal Power Looks Like a Takeover Target

Tom Konrad CFA Which company might snatch battered Nevada Geothermal Power out of the scratch-and-dent bin for a song? When Raser Technologies (RZTIQ.OB) declared bankruptcy at the end of April, I shrugged it off.  I saw the writing on the wall for Raser in September 2009, when they failed to get a DOE loan guarantee.  But part of the letdown also had to do with resource risk: the company was producing consistently less power from their 10MW (rated) Thermo plant than expected. Early in 2011, Ram Power (RPG.TO, RAMPF.PK) stock was clobbered when they announced construction...

The Magma/Plutonic Merger

A Great Deal for Plutonic Shareholders, Not bad for Magma Tom Konrad CFA As a shareholder of Magma Energy Corp. (MGMXF.PK), I'm reading through the joint information circular on the proposed merger of Plutonic Power Corp (PUOPF.PK) and Magma to form "Alterra Power Corp." I'm not thrilled with the merger, although I plan to vote for it, now that it's arranged. Overall, I think the merged Alterra will be a stronger company than either company alone. Both companies are in capital intensive niche Renewable Energy industries, so the added scale and diversification of Alterra should better...

Ormat Technologies (ORA): The 500-Pound Gorilla of Geothermal Power

Tom Konrad, CFA  Ormat is the 500-pound gorilla of the geothermal power industry.  Should you buy the stock? I've owned Ormat Technologies (NYSE:ORA) stock off and on since I first began to invest seriously in clean energy companies.  At one of the first renewable energy conferences I attended five years ago as part of my quest to understand the renewable energy investing landscape, I encountered a representative of the Geothermal Energy Association (GEA).  Here's how I recall our conversation: Me: "What are a few of the leading geothermal power companies?" GEA Rep: "Ormat." Me: "Are they...