Apr 16 2008
Energy Holdings Limited LLC announced today that it has signed a Letter of Intent to acquire a 25 megawatt electric generation plant from Goodland Energy Resources, LLC (GER) for $42.0 million. The plant is located in Sherman County, Kansas and is approximately 80 percent complete and designed to burn coal and waste derived fuel that normally is disposed of in municipal landfills. The Goodland plant will provide power and steam to a newly constructed ethanol facility and other industrial facilities in the area and is expected to be fully operational by June 30, 2008.
"This acquisition would provide EHL with a dependable source of revenue and is consistent with EHL's strategy to acquire and control niche opportunities in the electricity generation market for both natural gas and clean coal fueled assets as well as alternative and renewable ("green") energy projects," stated Ketheesch Aran, EHL's Chief Financial Officer. "This is an important step for EHL as we strive to be a leader in the independent power generation business. This plant demonstrates that energy can be created economically and be good for the environment," added Aran.
The facility is designed to be fueled by coal and biomass, but can also generate electricity and industrial steam from diversified fuel sources such as railroad ties, tires and other waste products. Since the plant utilizes waste for fuel, emissions credits will be created, an important element of EHL's desire to produce eco-friendly energy and an asset with significant future value.
The LOI provides EHL with exclusivity for a specified period and is contingent upon completion of final due diligence, entering into a definitive purchase and sale agreement for the plant, obtaining acquisition financing and other closing conditions. Chadbourne & Parke LLP has been retained as EHL's legal counsel.
EHL plans to develop, own and operate a growing number of power generation facilities, generally smaller than 100 MW, from retrofitted natural gas facilities that have favorable emissions profiles to biomass plants that consume agricultural waste. The production of electricity and steam, or efficient combined cycle energy production, is key to EHL's future as many industrial facilities that require both elements are now faced with inefficient processes that are uneconomic in today's high cost energy market.
"EHL is in various stages of negotiation with multiple industry counterparties to develop and acquire a number of additional energy projects and expects to sign additional letters of intent on certain energy assets. EHL believes that its asset acquisition and development pipeline is exciting and executable and intends to aggressively move forward to fund and acquire energy assets," said G. William Eason, EHL's Managing Member.
About Energy Holdings Limited LLC:
EHL targets the Western United States to execute its energy acquisition and development strategy. EHL is seeking to acquire and control niche opportunities in the electricity generation market for both natural gas and clean coal fueled assets as well as alternative and renewable ("green") energy projects. EHL views the Goodland facility as such a niche opportunity. EHL intends to acquire, re-power and develop natural gas, clean coal and renewable assets in key geographic transmission and energy-constrained locations such as California, Arizona, Nevada, New Mexico and Colorado. EHL intends to specifically focus on existing assets, both operational and non-operational. EHL intends to maximize environmental emission and green credits and fuel efficiency.
EHL's involvement in its projects is at a relatively early stage. No financing commitments have been received and due diligence has not been completed with respect to any of its projects. Therefore, no assurances can be made regarding EHL's ability to complete its projects or their success should they be completed.