Ormat Industries Ltd. (TASE: ORMT) subsidiary Ormat Technologies Inc. (NYSE: ORA) has secured geothermal rights for approximately 35,000 acres of land for exploration near Anchorage, Alaska. The company paid $3.3 million for the rights.
Ormat won 15 of the 16 tracts offered for lease on Mount Spurr, a snowcapped 3,374-meter volcano, 120 km west of Anchorage. Mount Spurr is in an active volcanic region. This increases the likelihood of finding a large geothermal field, compared with the more mature geological structures of Nevada and California, where the company is developing geothermal fields.
Ormat chairman and CTO Yehuda Bronicki said, "Alaska is a new frontier in the geothermal arena with many technological and logistical challenges. Our global experience, particularly in Hawaii, and the support of the local government along with the collaboration of other local stakeholders, will turn this challenge into an opportunity.
Bronicki noted that Ormat's first deal in Alaska goes back to 1975, when it supplied 100 remote gate valve power systems used for protection of the environment along the TransAlaska pipeline. The company's first geothermal unit was for the University of Fairbanks for 130 deg Fahrenheit water at the Manley Hot Spring.
In a separate development, Piper Jaffray upgraded Ormat Technologies to "Buy" from "Neutral", while reiterating the target price of $49. Piper Jaffray analyst Charles Fishman noted, "The demand for geothermal energy, a lower-priced alternative versus wind, solar and other renewables, remains strong."
Ormat Industries is one of the participants in the tender to build the solarthermal power plant at Ashelim in the Negev.
Ormat Technologies' share rose 6% on Friday to $43.06, giving a market cap of $1.95 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 14, 2008
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