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| 5/16/2007 1:44:57 PM ET | News Release Index
| | Sierra Geothermal Power Corp., Announces Preliminary Drilling Results
From The Reese River Project, Nevada
| | | Vancouver, British Columbia, May 16, 2007 - Sierra Geothermal Power Corp. ("Sierra Geothermal") (TSX Venture: SRA) is pleased to announce preliminary drilling results from the Reese River exploration well 56-4. We are encouraged by the results from the recently completed well on the Reese River Geothermal Project. The exploration well was drilled on the southeast flank of the thermal gradient anomaly and was designed to test the reservoir characteristics. Independent consultants, GeothermEx Inc., have provided a preliminary evaluation of the exploration results and recommendations as follows:
“It should be noted that additional data that may be collected in the future could change some of these conclusions slightly. In particular, it is likely that part of the well had not heated up fully at the time of the last downhole temperature / pressure survey (April 28, 2007). Well 56-4, drilled to 1,198 m (3,930 feet), has encountered temperatures of at least 124 degrees Celsius (256 degrees Fahrenheit), confirming the evidence from shallow drill holes that a significant geothermal anomaly is present at drillable depths. Some additional heat-up of the well is expected as it recovers thermally from the drilling process, although a large increase in the maximum measured temperature is not likely. A positive temperature gradient is present throughout the well, indicating that still-higher
temperatures occur at greater depths. There is not yet a basis for estimating what the
maximum resource temperature may be. A major loss of circulation that occurred while drilling at 923 meters (3,028 feet) indicates the presence of permeability within the Paleozoic basement rock, in a zone where temperatures exceed at least 110 degrees Celsius (230 degrees Fahrenheit). However, the nature of the temperature profile in the well, and the results of well completion testing, suggest that this zone is above the principal geothermal reservoir, which probably lies (at this location) deeper than the bottom of well 56-4. The exploration well has provided valuable information regarding subsurface geology and the distribution of temperature and permeability within the Reese River geothermal anomaly. Production and analysis of fluid from the deep permeable zone in the well may yield a more precise estimate of the maximum resource temperature than is currently available. Additional exploratory drilling in the Reese River field is warranted by the results of 56-4. The objectives of subsequent exploratory wells should be to confirm the presence of higher temperatures (as indicated by 56-4), to define the extent of the thermal anomaly at deeper levels, and to identify and delineate zones of elevated reservoir permeability. Wells of design similar to 56-4, possibly supplemented by deep temperature gradient holes, would be appropriate to accomplish these objectives.”
Further planned work for the well 56-4 includes obtaining fluid samples for geochemical analysis and additional temperature profiles. Further exploration work is being planned at the Reese River project. Additional well sites and temperature-gradient holes have already been permitted and geophysical surveys and production assessment wells are being considered for permits.
The Reese River project was rated by Richards and Blackwell as one of the top 15 undeveloped geothermal prospects in Nevada (Source: Geothermal Resource Council, Bulletin March/April 2002, The Forgotten Ones). Phillips Petroleum and Amax Exploration drilled 52 temperature-gradient holes during the 1970's and 1980's. Contoured data of the temperature-gradient wells outline a 150 degrees C/km heat-flow anomaly that is approximately 4.8 km (3 miles) long in the northeast direction by approximately 1.6 km (1 mile) wide. The center of the anomaly reaches a temperature gradient of over 500 degrees C/km with an overall average of 225 degrees C/km. The maximum calculated heat flow at Reese River is 1117 mW/m2 (Amax 1998). Using a Monte Carlo simulation, the potential geothermal resource at Reese River was estimated to have a 90% probability of generating 13 MW and a 50% probability of exceeding 30 MW (Source: New Geothermal Site Identification and Qualification, PIER study prepared by GeothermEx, 2004). A 30 MW power plant is able to produce enough electricity to power 24,000 homes.
About GeothermEx
In business since 1973, GeothermEx is the longest-established full-service geothermal consulting firm in the world. Specializing in all aspects related to the geothermal resource, GeothermEx has been involved in nearly 1,000 projects in 49 countries, working for developers, financiers, utilities, land owners and agencies of government. GeothermEx’s staff consists of experts in geosciences (geology, geochemistry, geophysics, hydrology), engineering (drilling, well testing, reservoir, production, power plant, chemical), computer science and economic analysis. All have advanced degrees and many years of geothermal experience. GeothermEx has conducted due diligence and verified resource adequacy for financial institutions in nearly all geothermal projects world-wide that have been financed by bank loans or bonds. This has enabled the development of more than 6,000 MW of geothermal power, the total financed to date exceeding US $10,000,000,000. More details can be found at www.geothermex.com.
About Sierra Geothermal
Sierra Geothermal Power Corp. is a Vancouver based renewable energy company focused on the exploration and development of clean, sustainable geothermal power. Geothermal plants produce long-term revenues and provide continuous base-load power, often at or above 95% capacity factor. Sierra Geothermal Power controls a large portfolio of geothermal projects located in Nevada and California. The company intends to advance the development of its portfolio of projects through a combination of equity and/or joint ventures, while continuing to evaluate additional acquisitions.
On behalf of the Board of Directors,
Gary R. Thompson, P.Geo
Not for distribution to United States newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of United States securities laws. The information provided in this news release contains forward-looking statements within the definition of the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995, including statements regarding potential energy resources and project development possibilities. These statements are based on Sierra Geothermal's current expectations and beliefs and are subject to a number of risks and uncertainties that can cause actual results to differ materially from those described in forward-looking statements, including the risks that the resource potential of any one of our projects may be uneconomic due to the lack of a high temperature water supply, or financing will not be available for construction of the power plants, and the revenues generated will not prove sufficient to fund operations and/or service debt, among others. Readers are cautioned to review the risk factors identified by the company in its filings with Canadian securities agencies. Forward-looking statements are based on management's expectations, beliefs and opinions on the date the statements are made. Sierra Geothermal Power Corp. assumes no obligation to update forward-looking statements if management's expectations, beliefs, or opinions, or other factors, should change. This news release does not constitute an offer or a solicitation of an offer to sell any securities in the United States.
Sierra Geothermal Power Corp.
Mr. Gary R. Thompson, P.Geo, P.Geol.
President & CEO
(403) 870-1166 or Toll Free: 1-800-563-5631
Email: gthompson@sierrageopower.com
Website: www.sierrageopower.com
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