Sierra Geothermal mulls options in credit crisis

OTTAWA, Oct 30 (Reuters) - Sierra Geothermal Power Corp (SRA.V) said on Thursday it is exploring strategic options because current market conditions have made it harder to find joint venture partners.

Sierra, with 17 projects in Nevada and California, said its stock is trading at a significant discount and it now needs to study ways to improve shareholder value.

The Vancouver, British Columbia-based company said that until it has secured additional capital at acceptable rates it will be "extremely prudent" with existing cash.

As of Sept. 30, Sierra had C$4.9 million ($4 million) in cash and equivalents, which it said was sufficient for minimum exploration and permitting work on properties.

It also said on Thursday that it has satisfied spending requirements from Western Geothermal Partners to gain 100 percent of the Reese River power project in Nevada.

A report this summer set a 90 percent probability for the project to generate at least 26 megawatts for 20 years. A 26 MW geothermal plant can provide power to about 21,000 homes.

"We remain committed to building Sierra Geothermal Power into a leading independent producer of geothermal power and have the foundation upon which to achieve this goal," Chief Executive Gary Thompson said in a statement.

There is growing interest in the geothermal sector, which is seen as a potential source of reliable and emission-free electricity.

The United States is the world leader in producing electricity from geothermal energy. Power is produced by piping super heated water from far below ground and releasing steam at surface level to spin turbines and generate electricity.

The sector includes a handful of publicly listed companies in Canada.

Polaris Geothermal GEO.TO, which is producing power from a geothermal reservoir in Nicaragua, may be the biggest player. In a recent presentation, Chief Executive Tom Ogryzlo said Nicaragua's petroleum-dependent economy represents a rich market.

The company, which has said it is on track to meet its 2010 target of 72 MW of output, also sells carbon credits.

Western GeoPower Corp's WGP.V 35 MW Geysers project in northern California is scheduled to start commercial generation in 2010 and it is developing the South Meager project north of Vancouver.

Nevada Geothermal Power Inc (NGP.V) has four properties in Nevada and Oregon. ($1=$1.22 Canadian) (Reporting by Susan Taylor; editing by Rob Wilson)