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The Ubika Research Cleantech Stock Watchlist
| Ram Power Corp (T.RPG) |
| Company Name: |
Ram Power Corp |
| HQ Location: |
Reno, Nevada |
| Company Website: |
www.ram-power.com |
| Shares Outstanding |
146.05 Million |
| Market Cap: |
$427.93 Million |
| Current Share Price |
2.93 (as of May 13, 2010) |
| 52 Week Range |
$2.6 - $4.23 |
| Average Daily Volume |
142,000 |
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Share Highlight / 1-Year Stock Chart
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Business Overview
Ram Power, Corp. (TSX:RPG) is a renewable energy company focused in the business of acquiring, exploring, developing and operating geothermal power projects to address the growing demand for green energy in the United States and around the world. Founded in 2008 as Ram Power, Inc., by a highly experienced geothermal project development and management team, the Company combined with three publically traded Canadian geothermal power companies in October, 2009 to take advantage of the economies of scale in project development. Ram Power Corp., as the new corporate platform has an interest in geothermal projects in California, Nevada, Nicaragua, Canada and elsewhere. The Company’s mission is to become a leading global renewable power project developer and supplier of clean and reliable geothermal power.
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What is interesting?
- Geothermal as a source of power is a mature industry. Geothermal energy is power extracted from the heat stored in the earth’s core. The Earth’s internal heat naturally flows to the surface by conduction, and is replenished by radioactive decay of minerals. Consequently, the life-span of geothermal power generating facilities is expected to exceed 50 years.
- It is among the very few clean energy sources, which can be used as a source of base load power. Base load power is power which is available on a constant basis. For example, sources like solar and wind are notorious for their unreliability and hence cannot provide base load power. Solar will only produce when there is sunlight and wind turbine will turn only when the wind blows.
- Strong government incentives is available for this sector and there is now a recognition of geothermal as among a few very few reliable clean energy sources available that can provide base load power. Many of Ram’s advanced development sites are United States-based, where legislative support and the need for low-carbon sources of base-load electricity have never been higher. The stimulus programs and the Obama administration in general is pursuing policies which favour renewable power.
- Ram was formed through the merger of Ram with two currently existing, advanced-stage geothermal companies – Polaris Geothermal and Western GeoPower. The merged entity now has a critical mass of projects, deep pool of management talent, and access to capital and project management expertise to execute the complex geothermal projects.
- In October 2009, company raised around $170 Million dollars of equity capital providing the company with a strong balance sheet.
- Ram Power’s management team has well over 140 years of combined experience in oil and gas, mining, infrastructure and geothermal energy. The core of the executive team has gained its experience at Ormat Technologies (ORA-NYSE), a market leader in geothermal technologies.
- High-Quality Advanced Projects with focus in Latin America and South West US: Ram’s advanced projects include San Jacinto, Nicaragua, its Orita project in Southern California, and the Geysers project in Northern California. San Jacinto currently operates at a capacity of 10 MW, and is undergoing expansion to get upto 72 MW by the end of 2011.
- Ram Power has a large portfolio of geothermal projects located in California, Nevada, Nicaragua, and British Columbia with signed power purchase agreements for up to 335 MW in California, and 72 MW in Nicaragua. The Company’s Imperial Valley, Geyser’s, and Nicaragua projects are all located in regions well known for their world class geothermal resources.
- Apart from advanced stage projecs,t Ram also has several early stage exploration projects under development. Ram Power has secured land rights to over 161,000 acres in California, Nevada, Canada, and Nicaragua. These exploration projects could provide additional growth opportunity.
- Quarterly results or revenue of RAM at this point is meaningless from investment potential perspective. In RAM, the investment thesis rests on its ability to execute on the projects in pipeline which can generate a steady stream of future revenues as geothermal is a very long term resource and has zero input resource or fuel cost once built. So tracking the project progress of Ram should be the key focus for any potential investor.
- Company claims that their projects once on stream will have EBITDA margin of 65% to 75%, which would make this an attractive business as there is no input fuel cost and the resource has a very long life.
- Ram is also included in the new TSX clean technology index.
Risks
- RAM has very limited revenue currently. The project execution risk to implement projects on time and on budget remain very high.
- Renewable power economics relies on government grants. Government policies can change with political shifts and governments overall budget considerations. So the economics of RAM’s projects are tied to government incentives continuing.
- Projects in Latin America may pose country risk
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