Strong Industry Sector

The renewable energy sector has become the focus of attention in recent years and is poised for significant growth. Worldwide private investment in renewable energy projects is increasing and expected to surpass US$7 trillion by 2030. Current US energy consumption is near 3.8 billion MWhr/year, of which 20% could be provided from geothermal systems. Presently, 3000 MW of electricity is produced from geothermal sources in the US, which represents about a third of worldwide geothermal power generation. Some observers believe that new geothermal projects could increase installed geothermal capacity by at least 50% in the next five years and investors anticipate they will achieve strong returns once the projects reach production.

Large Pipeline of Projects

SGP’s 17 projects constitute a substantial land position, covering more than 365 km2 (90,000 acres) in Nevada and California. In addition to SGP’s top four advanced-stage projects, the remaining 13 sites provide a robust pipeline that will result in continued growth in production and revenue. All SGP’s projects are located near transmission infrastructure providing access to a large and growing marketplace. SGP continues to identify new areas of high geothermal potential and plans to add to its already extensive land base.

Growing Demand for Renewable Power

Demand for renewable power is being driven by several factors: the volatility of fossil fuel prices, recent legislation designed to address global warming, public and regulatory pressure to reduce carbon dioxide emissions, rapid population growth in the western U.S. resulting in increased energy consumption, and the need for stable economic growth.

Favourable Government and Regulatory Programs

The Renewable Portfolio Standard (RPS) is a policy presently adopted by 28 states. This policy requires electricity providers to obtain a certain percentage of their power from renewable sources by a specified date. The states of California and Nevada are driving renewable power demand in the west, requiring electrical providers to meet 20% of their electricity needs from renewable energy sources by 2010 and 2015, respectively. In addition, renewable energy developers qualify for a Production Tax Credit (PTC) at ~$20/MW hour for the first 10 years of a plant’s operation. Management expects the PTC to be extended past its current expiration date of December 31, 2008.

Additional Investment Opportunities

SGP’s growth strategy involves increasing its electrical generation capacity through additional acquisitions. SGP continues to evaluate opportunities on the basis of geothermal potential, transmission infrastructure and proximity to power markets.

Well-Qualified Management Team and Board

SGP benefits from the skills of an accomplished management team and Board of Directors, experienced in exploration, engineering and business development. SGP’s leadership team is well-qualified to develop its projects to production efficiently and profitably.