Denham Capital to Invest $145 Million in Vulcan Power Company



    BEND, Ore. and BOSTON, July 28 /CNW/ -- Vulcan Power Company ("Vulcan")
and Denham Capital ("Denham") announced today that Denham will invest $145
million in newly issued preferred equity securities of Vulcan. In addition,
Merrill Lynch Commodity Partners ("MLCP"), a principal investment fund of
Merrill Lynch, will convert its outstanding notes into Vulcan preferred
equity.
    Vulcan owns one of the largest geothermal property portfolios in the
United States including properties in California, Nevada, Oregon, and Arizona.
The Denham investment will allow Vulcan to continue to develop prime
geothermal property with potential to generate 900 to 2,000 megawatts (MW) of
natural steam fuel -- enough to provide baseload renewable energy for up to
two million people.
    Steve Munson, President and CEO of Vulcan, said that the company is
embarking on an ambitious drilling and project construction program: "This
investment by Denham allows the company to move forward aggressively with our
business plan of developing steam resources and power projects, and supporting
existing long term power purchase agreements.  With the strength and energy
sector knowledge of our investors, Denham and Merrill Lynch, we stand to
become one of the premier independent green energy companies."
    "Vulcan will be a strong addition to our power generation portfolio,
providing a low cost, baseload source of significant renewable electricity for
Western markets at a time of extreme volatility," said Scott Mackin, Partner
at Denham. "Its highly-valued, long term geothermal leases and seasoned
management team put Vulcan in a strong competitive position to serve those
markets through its long term power purchase agreements.  Together with
Merrill Lynch, we intend to help Vulcan grow quickly into a best in class and
significant renewable independent power producer."
    Geothermal energy involves drilling for heated water reservoirs, which
produce steam that can be used as a clean alternative to fossil fuels burned
to generate electricity. This process avoids the production of emissions
including carbon dioxide, a major greenhouse gas. Geothermal reservoirs are
replenished by re-injecting condensed water back into the reservoir
establishing a long-term renewable energy resource.
    
    About Vulcan Power:
    
    Vulcan Power is a Bend, Oregon based, privately-held company founded in
1991 by Steve Munson, the company's chairman and CEO.  Mr. Munson is a
recognized expert on 'green' power development, having participated in federal
and state power policy, regulatory and legislative process.  He is widely
credited in the energy industry for his leading role in new Renewable
Portfolio Standard laws in the Western United States.
    Vulcan acquired many geothermal leases when some of the major energy
companies were exiting geothermal after investing tens of millions of dollars
into steam exploration. Through opportunistic property acquisitions and
additional investment, Vulcan is now poised to reap the benefits of this work.
    Vulcan holds a property portfolio of geothermal leases and applications
covering more than 160,000 acres.  The company is focused on delivering
geothermal power to California, the largest green power market in the world,
and Nevada from properties mainly in northern California and Nevada.
    Vulcan has signed 20-year term Power Purchase Agreements (PPAs) with
Nevada Power Company, Pacific Gas & Electric Company and Southern California
Edison Company. It is also negotiating additional PPAs with other utilities.
For additional information on Vulcan and geothermal power, go to
www.vulcanpower.com.
    
    About Denham Capital:
    
    Denham Capital is a leading global private equity firm, with offices in
Boston, Houston, Short Hills, New Jersey and London.  With approximately $4.3
billion of invested and committed capital, Denham makes direct investments in
all segments of the energy and commodities value chain, including oil and gas,
mining, timber, power, carbon assets and energy-related infrastructure and
services. The firm invests globally, with investments currently in the US,
Canada, South America, Europe, Russia/CIS, Asia and Australia, and across all
parts of the capital structure and all stages of the corporate and asset
lifecycle, from development projects to mature, operating businesses. Denham
typically targets investments in the $50 million to $250 million range.  For
more information about Denham Capital, visit www.denhamcapital.com. Denham
Capital does not provide investment advisory services to the public. Denham
Capital Management "SM" is a trademark of Denham Capital Management LP.
    
    About Merrill Lynch:
    
    Merrill Lynch is one of the world's leading wealth management, capital
markets and advisory companies with offices in 40 countries and territories
and total client assets of approximately $1.6 trillion. As an investment bank,
it is a leading global trader and underwriter of securities and derivatives
across a broad range of asset classes and serves as a strategic advisor to
corporations, governments, institutions and individuals worldwide. Merrill
Lynch owns approximately half of BlackRock, one of the world's largest
publicly traded investment management companies with more than $1 trillion in
assets under management. For more information on Merrill Lynch, please visit
www.ml.com.

    
    Contacts:
    

    
    Vulcan Power
    Mark Albert
    Vice President(541) 317-1984
    malbert@vulcanpower.com
    

    
    Denham Capital Management
    Gina Sorice
    CJP Communications
    (212) 279-3115 ext 243
    gsorice@cjpcom.com
    

    
    Merrill Lynch
    Danielle Robinson
    Media Relations
    (212) 449-0097
    danielle_robinson@ml.com

    




For further information:

For further information: Mark Albert, Vice President, Vulcan Power,
+1-541-317-1984, malbert@vulcanpower.com; Gina Sorice, CJP Communications,
Denham Capital Management, +1-212-279-3115 ext. 243, gsorice@cjpcom.com;
Danielle Robinson, Media Relations, Merrill Lynch, +1-212-449-0097,
danielle_robinson@ml.com Web Site: http://www.vulcanpower.com                
http://www.denhamcapital.com                 http://www.ml.com

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DENHAM CAPITAL

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