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Reno, Nevada, 89521

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Tel: (775) 398-3700
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Email: info@ram-power.com

Orita

Project Description and Location
Accessibility, Climate, Local Resources, Infrastructure and Physiography
History of the Property
Geological Setting
Exploration
Drilling
Resource Estimates
Planned Operations

 

Orita Project Ram Power

Project Description and Location

The Orita Project is a planned project to develop, construct and operate a geothermal electric generation facility, an electric switchyard with transmission interconnection, a geothermal wellfield, and related auxiliary systems at a location approximately 11 miles east of Brawley, California (the “Orita Project”). The Company estimates that the 3,552 acre leasehold may support a commercial size geothermal resource potential based upon data in their extensive proprietary database.  The site is located within the East Brawley Known Geothermal Resource Area (“KGRA”).
The Company secured geothermal and surface leases at the Orita Project in 2009 (the “Orita Project Leases”). The Orita Project Leases provide for an initial term of five years. If certain performance standards are met prior to the expiration of the initial term, the term of the leases is extended for another five years.  Once production of electricity begins, the leases continue as long as electricity or other geothermal resources are being produced in commercial quantities. Reasonable outage periods are allowed under the leases for maintenance, equipment replacements, and force majeure events.
Annual rental payments are payable on each lease or have been prepaid.  Royalties are payable on each geothermal lease based upon gross revenue derived from the sale of electricity.  Royalties are also payable based upon the gross proceeds received by the Company from any sale of extractable minerals or from utilizing hot water, steam, or thermal energy for purposes other than power generation.  The pertinent royalty to be paid to the geothermal interest owners are:  Four percent (4%) of the proceeds from the sale of electric power, two percent (2%) of the proceeds from the sale of by-products, and (10%) of the proceeds from the sale of steam or other geothermal resources.
To the Company’s knowledge no environmental liabilities exist at the Orita Project site. Several significant permits have been secured for the initial exploration phase of the project including:

  • An Imperial County Conditional Use Permit providing for drilling of six wells;

  • A California Environmental Quality Act Initial Study/Negative Declaration;

  • An Imperial County Air Pollution Control District Authority to Construct;

  • A California Regional Water Quality Control Board Waste Discharge Requirement; and

  • California Division of Oil, Gas, and Geothermal Resources Permits to Conduct Well Operations.

Additional significant permits and approvals are required to construct and operate a geothermal facility, including:

  • An Imperial County Conditional Use Permit providing for construction of remaining wells, pipelines, generation facilities, and other associated structures;

  • A California Environmental Quality Act Environmental Impact Report;

  • An Imperial County Air Pollution Control District Authority to Construct;

  • A California Regional Water Quality Control Board Waste Discharge Requirement;

  • A California Division of Oil, Gas and Geothermal Resources Notice of Intent to Drill a Geothermal Well; and

  • • A California Division of Oil, Gas and Geothermal Resources Injection Project Permit.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Orita Project is accessible from paved and unpaved state and county roads and is approximately 11 miles east of Brawley, California.  Brawley, the nearest population center, had a population of approximately 22,000 in the 2000 census.  Rail, road, and sea transportation from the Los Angeles port is adequate for shipment of heavy equipment to the project site.  The local county graded and paved roads are adequate to support construction of the project.
The Company intends to rely upon excess water generated by operation of the Orita Project to generate some of the water necessary for cooling.  This water generated by operation of the Orita Project is a byproduct of the conversion of geothermal steam into energy. Additional makeup water is expected to be purchased by appropriation from the IID.  Sufficient surface rights are present in the existing Orita Project leases to construct and operate one or more geothermal generation facilities.  The net power production from the Orita Project plant will be delivered by a short radial line and interconnected to the IID 230 kV transmission line, which is along the East Highline Canal. 
The topography of the Orita Project is characterized by flat terrain bisected by irrigation canals, drains, and other irrigation structures.  The ambient temperatures range from 61°F to 122°F (16°C to 50°C).  The elevation of the proposed site is 26 ft. (8 m) below sea level.  The average annual precipitation is approximately 2.4 to 2.8 inches (6-7 centimeters) per year.  The predominant vegetation is farmed crops.

History of the Property

Concurrent with the KGRA designation in 1981, a total of eight deep exploration wells were drilled by Unocal, Occidental and Phillips Petroleum in the area. These wells were completed at depths from 8,500 ft. to 13,600 ft. (2,590 m to 4,115 m) and all encountered high temperature geothermal resources with temperatures as high as 576°F (302°C).  Testing of one well confirmed flow rates in excess of 500,000 lbs per hour at a well head pressure of 560 psig, demonstrating a 6 MW capacity from the seven inch diameter well.  In addition, operators drilled shallow gradient and slim-hole wells that confirm the extent of the thermal system, and borehole geophysics and mud logs are available to quantify and characterize all sandstone units that may be potential production horizons.
Commercial diameter wells are expected to produce at levels of up to 12 MW or greater in this resource.  The flow tests demonstrate that a deep high salinity reservoir is present.  The temperature profiles within the 14 mi2 (39 km2) area tested by the existing deep drilling are similar and all demonstrate temperatures of 400°F (205°C ) at a depth of 7,000 ft. (2,134 m).  The Orita Project property was leased from the owners of the surface and geothermal mineral interests.  There are no override interests on these Orita Project leases. 

Geological Setting

The Imperial Valley is a favorable area for geothermal development with high temperature geothermal resources identified in areas where the generated power can be relatively easily connected into the local grid. Imperial Valley geothermal systems occur within the Salton Trough, an area that marks the transition between two major geologic provinces. To the south, sea floor spreading characterizes the area that includes the Sea of Cortez in the Baja California Province. To the north, the San Andreas Fault system dominates the structural setting.  Either process can produce local areas of extended crust that provide enhanced permeability for development of geothermal systems. The process of sea floor spreading adds the element of magma intrusion as an enhanced heat source within the already high regional heat flow of the thin crust within the Salton Trough. This later process is most evident within the Salton Sea geothermal properties where the resulting geothermal resource exceeds 600°F. The total estimated capacity of the Greater Salton Sea area in the Imperial Valley is over 22,000 MW.
The geology of the Salton Trough is dominated at drillable depths by Quaternary and Holocene deposits related to Colorado River delta processes.  These sediments represent a range of sedimentary environments including true deltaic sediments, lacustrine units, eolean deposits and coarser clastics derived from uplifted units in mountain ranges bounding the trough. 

Exploration

The Company conducted a magnetotelluric survey, a seismic survey, and a gravity survey at and in the vicinity of the Orita Project area.  Results of these surveys are being utilized to support the Company’s plans to develop one or more power plants at the Orita Project area.

Drilling

In April 2010, the Company commenced its drilling program starting with Orita No. 2 well, which was drilled targeting the successful production zone encountered in the Emanuelli #1 well drilled in 1982.  The Emanuelli #1 well produced approximately 500,000 pounds per hour, which indicated commercial viability.  Drilling on the Orita No. 2 well was suspended at a depth of 9,267 ft. due to mechanical problems, and the well was lined with perforated casing, cleaned and tested.  A maximum temperature of 457˚F was measured in the well still cooled by drilling mud.  A flow test produced fluids that confirmed the desired low-salinity benign chemistry but only marginal permeability at this depth. 
In July 2010 drilling commenced on the Orita No. 3 well.  In September 2010, the well was completed to the targeted depth and showed significant hydrothermal alteration and had intercepted a major fault controlled low-resistivity zone with loss circulation.  Bottom hole temperature of the well was in excess of 450˚F.  The well was successfully cased to 9,198 ft., however, the perforated liner was damaged during installation and productivity testing could not be successfully completed. 
Following a number of mechanical drilling problems, consisting mainly of drilling tools and drill rig equipment failing, both above and below ground, the Orita No. 2 well was re-drilled from the bottom of its casing string at an approximate 5,400 ft. depth to a total depth 12,959 ft.  On December 21, 2010, the Company successfully flow tested the Orita No. 2 well.  The well was flow tested with a sustained flow rate of approximately 500,000 pounds per hour at 155 psig. 
In the January 2011, the Company commenced drilling of the Orita No. 4 well at the previously drilled and proven Emanuelli #2 well location. The Orita No. 4 well was drilled to a depth of 14,325 ft. and initial flow testing shows fluid entries at 10,100 ft. and 11,500 ft. with 555°F measured at 12,430 ft. under flowing conditions. A long-term flow test was completed in late June 2011.  The well exhibited erratic and surging flow behavior with an inability to achieve completely stable conditions.  The final flow was estimated to be around 3 MW at a flowing pressure of 120 psig, but was inconsistent and unstable.  The well test was terminated and the Company is assessing its viability as a commercial well. 
The Company is assessing the feasibility of completing further analysis and evaluation of the Orita resource and project development potential by Company personnel and independent parties including GeothermEx and SKM, including structural geology and geophysical examination of the field results from the drilling experiences of the three Orita wells drilled to date.  The feasibility of completing brine chemistry analysis to aid in determining resource characteristics and compatibility with power plant parameters will also be evaluated. In conjunction with these studies and their results, the Company will determine whether completing the long term test of Orita 2 will be necessary in evaluating the resource and the viability of further project development. The testing of Orita 2 would involve injection into Orita No. 4, which may cause positive changes or improvements to the flow potential and behavior of Orita No. 4. 

Resource Estimates

The Company estimates that the reservoir may have the potential to support as much as 300 MW within the current leasehold of about 5 mi2 (14 km2).  Additional leasing in the Orita Project area could increase the MW potential.  This estimate is based upon known geologic information from the wells that were drilled and geophysical information that was gathered by UnoCal, Occidental, Phillips, and others.  Additional information about the size and quality of the reservoir will be available when the Company obtains additional information from its geophysics and drilling program. 

Planned Operations

In 2009, the Company entered into a 20 year PPA for the Orita Project with SCE. The contract was for an initial facility between 40 and 100 MW with two expansion options of equal capacity.  In addition, to transmit power from the Orita Project, the Company had a transmission reservation on the Path 42 line that consists of a thirty-five mile long, double circuit 230kV transmission line segment between the IID Coachella Valley Substation and SCE Devers Substation.  

On August 31, 2011, the Company terminated the PPA with the SCE because it was not able to meet the critical milestone schedule as outlined in the PPA for development of the Orita Project.  As a result of the termination of the Orita PPA, the Company also assigned its rights associated with the Path 42 line to unrelated third parties.  The Company plans to re-evaluate the economics and feasibility and future resource development plan for the Orita Project once additional funds are available.