Magma energy invests in Reykjanes geothermal company
Magma Energy Corp. has announced that it has closed a previously announced agreement to acquire 32.32% of Iceland geothermal company HS Orka. HS Orka is the leading geothermal company in Reykjanes, Iceland, where the Ásbrú Enterprise Park is located. HS Orka is also a part owner of Keilir - Atlantic Center of Excellence and is working with companies and schools at Ásbrú on several green energy projects such as Keilir's new green energy laboratories. A further agreement to purchase a 2.16% stake in HS Orka is expected to close in March, 2010.
Magma's CEO Ross Beaty said, "I am really pleased we have completed this transaction, which will boost Magma's direct and indirect geothermal power production to 86 MW and its geothermal resources to approximately 600 MW. We will now focus on helping HS Orka expand its power production by 230 MW by 2015. This will boost Magma's attributable geothermal power production to 186 MW and provide a more robust tax and employment base for the Icelandic economy."
About Magma Energy Corp.
Magma Energy Corp. is a geothermal power company which operates, develops, explores and acquires geothermal energy projects. We have an extensive portfolio of properties throughout the western United States, Iceland and Latin America, including one operating power plant in Nevada and an interest in two other operating power plants in Iceland.
About HS Orka
HS Orka is the largest privately owned energy company in Iceland. Installed geothermal power capacity is 175 megawatts ("MW") from the Svartsengi and Reykjanes power plants. In addition, HS Orka generates 150 MW of thermal energy for district heating. Expansions are planned that will increase HS Orka's geothermal power production to 405 MW by 2015. HS Orka's 75 MW Svartsengi plant began production in 1978 and its 100 MW Reykjanes plant began production in 2006. Much of the power is sold under US dollar contracts to a large aluminum smelter that is one of the world's lowest cost aluminum producers. The expansion plans of HS Orka will provide power to a new aluminum smelter that is currently under construction.
About Iceland's Geothermal Industry
Iceland has one of the world's largest and best developed geothermal industries, supported by substantial geothermal resources and a highly skilled domestic workforce. Geothermal energy accounts for 23% of Iceland's electricity demand and powers many of Iceland's homes and businesses, including Iceland's large aluminum industry. Over 50% of Iceland's total energy consumption is provided by geothermal through electricity and direct use.
Magma was advised on the transaction by Glacier Partners in New York, and its affiliate Capacent Glacier in Reykjavik, investment advisory firms specializing in the geothermal and seafood industries.