UPDATE 2-Ram Power CEO out after project cost blowout

Mon Feb 14, 2011 5:58pm EST

Related Topics

* Ram board member Walter Higgins appointed interim CEO

* Company says CEO departure was a mutual decision

* CEO search could take three to six months

* Stock fell 20 pct last week (Adds company, analyst comment. Updates stock price. In U.S. dollars unless noted)

VANCOUVER, Feb 14 (Reuters) - Ram Power Corp (RPG.TO) said on Monday its president and chief executive, Hezy Ram, has quit, knocking 23 percent off its stock, a week after the geothermal company warned about a big project cost over-run.

His departure was a mutual decision of Hezy Ram and the company he co-founded in 2008, which also bears his name, Ram Power investor relations head Steven Scott said.

"As a company we owe our sharholders what we said we are going to do, which is execute our projects. We have been finding that we have had some setbacks and we need to ensure that these setbacks don't carry forward," Scott said.

Walter Higgins, a Ram board member, has been appointed as interim president and CEO while the company searches for a new leader outside Ram, a process that could take three to six months, Scott said.

Higgins is the retired chairman and CEO of Sierra Pacific Resources, now called NV Energy, a Nevada electricity and gas utility, Ram said in a statement.

Ram's stock ended down 23 percent, or off 36 Canadian cents, at C$1.20 on the Toronto Stock Exchange.

The fall is on top of a 20 percent dive last week after the company revealed that its flagship San Jacinto-Tizate project in Nicaragua faced a delay of about three months and unexpected extra costs of about $50 million due to higher labor and material costs and disappointing drilling results.

"It is significant dollars over budget," said Jacobs Securities analyst John McIlveen.

Hezy Ram, formerly a top executive at Ormat Technologies Inc (ORA.N), one of the world's biggest geothermal energy company, owns about 3 percent of the outstanding shares in Ram Power, Scott said.

Geothermal energy is a renewable source of energy that comes from hot water and steam produced deep inside the earth. These are piped up to the surface and used to drive turbines to produce electricity.

($1=$0.99 Canadian) (Reporting by Nicole Mordant; editing by Rob Wilson)

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