U.S. Geothermal Inc. Acquires Majority of Goldman Sachs Interest in Raft River Power Plant

U.S. Geothermal Inc.is pleased to announce that it has acquired from Goldman Sachs the majority of their cash flow interest in and ownership of the Raft River geothermal project. U.S. Geothermal will receive 95% of the cash flow from the project on a going forward basis, along with all increased cash flow from any project improvements. The purchase price was $5.1 million for the 95% interest, with an option to purchase the balance of Goldman's interest for Fair Market Value at the end of 2017.

"This agreement with Goldman Sachs is a strong positive for our company," said Dennis Gilles, CEO of U.S. Geothermal. "It unlocks the ability to consider capital upgrades that should increase output from the facility and potentially reach its design capacity of 13 megawatts. It strengthens our commitment to becoming the North American leader in geothermal energy."

The purchase price consisted of a $3.5 million cash payment plus a promissory note of $1.6 million that bears interest at 8%. Under the promissory note agreement, $1 million of the note may be satisfied with shares of U.S. Geothermal common stock priced at the 10 day weighted average closing price of the common stock at time of conversion if not otherwise paid in cash by March 31, 2016. U.S. Geothermal will file a resale registration statement covering the shares to be issued in satisfaction of the promissory note.

The Raft River Geothermal Power Plant is located in Southeast Idaho and has a designed capacity of 13 megawatts net. The project is currently operating at approximately 9.4 megawatts. Power from the facility is sold under a firm price, 25 year contract with Idaho Power Company which allows for the full 13 megawatt output. Reservoir modeling indicates that the geothermal reservoir can support the full 13 megawatt contract. Plans are under consideration to drill for additional production to increase plant output to its full contract limit.

The promissory note and the shares issuable upon conversion have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

"We are also encouraged by the increasing focus on climate change and renewable energy," said Mr Gilles. "Geothermal is 24/7 baseload power and has significant advantages over wind and solar. We are seeing legislators paying closer attention to reducing emissions and expect a ready market for our pipeline of development projects as we bring them on stream."