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Fellows Energy Signs Option To Acquire Two Advanced Geothermal Projects
Broomfield CO (SPX) Dec 09, 2008 Fellows Energy is pleased to announce that it has entered into an agreement, subject to due diligence, to acquire two advanced geothermal projects in the Andes Region of Argentina from Geothermia Andina, SA, a private Argentine entity. The two new projects are in addition to the Company's recent announcement relating to Grupo Minero Aconcagua SA, a private Argentine company in advanced stages of negotiation to acquire rights to geothermal and wind energy projects in central and southern Argentina. The two projects now under option include the Valle Del Cura and the Tuzgle-Tocomar projects, both entering the pre-feasibility stage and hosting an estimated combined 300 MW of electric power generating potential. Fellows has targeted a third project in Argentina which has been the subject of a feasibility study covering the first 30 MW of an estimated 100 MW of generating potential. The three projects combined would host an estimated 400 MW of potential. The Company is also working toward the completion of its acquisition of GMA. Although the precise terms of the purchase options have not been disclosed at this time for competitive reasons, the purchase options call for nominal up-front payments and a graduated option payment schedule over several years. This structure gives the Company adequate time to evaluate the value of the projects and obtain joint venture or other funding for development and purchase capital. In spite of the current conditions in the financial markets in general, the Company believes that a number of financial incentives and an emerging, favorable market and attractive financing terms for geothermal, wind and other alternative energy projects will provide a solid basis to move forward. In addition to the revenue associated with generating power, it is also expected that the projects will qualify for "carbon bonds" and national premiums that will further enhance the cash flow potential of the projects. Although the Company is now actively refocusing its efforts to take advantage of the alternative energy segment of the industry, it also continues in its efforts to obtain joint venture financing on its oil and gas exploration projects in the western United States to enable it to eliminate its convertible debt and strengthen its balance sheet. "The signing of option agreements to acquire these two projects is a big step forward in bringing value into the Company and restructuring our asset base," said Fellows CEO, George Young. "Acquiring the rights to these two advanced-stage projects will greatly assist us in building shareholder value and enable us to grow the Company while we improve our balance sheet and capital structure. We plan to move forward quickly with preliminary project evaluation and assessment of financing alternatives through partnerships or joint venture arrangements." Share This Article With Planet Earth
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