Form 3200-24a

May 2007

United States

Bureau of Land Management

Department of the Interior

Bureau of Land Management I

OFFER TO LEASE AND LEASE FOR GEOTHERMAL RESOURCES

Serial No. NVN083965

The

undersigned (see page 2) offers to lease all or any of the lands in item 2 that
are available for lease pursuant to the Geothermal Steam Act of 1970, as amended
(30 U.S.C. 1001-1025).

Read Instructions Before Completing

WiAl

1.

Name RASER POWER SYSTEMS LLC

Street 5152 EDGEWOOD DR STE 375

City, State, Zip Code PROVO, UT 84604

Future Rental payments must be made

on or before the anniversary date to

Minerals Management Service

Royalty Management Program

P.O. Box 5640, Denver CO 80217

2. Surface managing agency if other than BLM:
___________________________________ Unit/Project:
_______________________________________________

Legal description of land requested (segregate by public domain and acquired
lands):

T. R Meridian State County

Total Acres Applied for_________________

Percent U.S. interest ___________________

Amount remitted: Processing Fee $__________________________ Rental Fee
$__________________________ Total $__________________________

DO NOT WRITE BELOW THIS LINE

 

3. Land included in lease:

 

T.

0150N R. 0440E Meridian MDM State NV County Nye  

Sec. 019 LOTS 1-4; Sec. 028 ALL;

019 E2E2, SWNE, E2W2, W2SE; 029 E2, SESW;

020 N2, SE; 030 LOTS 1-4;

021 ALL; 030 NE, E2W2, NESE, W2SE;

022 NE, NENW, N2SW, SESW, SWSE;

027 ALL;

 

Total acres in lease 4273.760

 

Rental Retained $8548.00

In accordance with the above offer, or the previously submitted competitive bid,
this lease is issued granting the exclusive right to drill for, extract,
produce, remove, utilize, sell, and dispose of all the geothermal resources in
the lands described in item 3 together with the right to build and maintain
necessary improvements thereupon, for a primary term of 10 years and subsequent
extensions thereof in accordance with 43 CFR subpart 3207. Rights granted are
subject to applicable laws; the terms, conditions, and attached stipulations of
this lease; the Secretary of the Interior's regulations and formal orders in
effect as of lease issuance; and when not inconsistent with the provisions of
this lease, regulations and formal orders hereafter promulgated.

Type of Lease:

THE UNITED STATES OF AMERICA

[x] Competitive [] Noncompetitive

 

BY

 

[] Noncompetitive direct use (43 CFR subpart 3205)

(Signing Official)

 

CHIEF, BRANCH OF MINERALS ADJUDICATION

AUG 29 2007

Comments

(Title) (Date)

     

Check if this is a converted lease []

 

EFFECTIVE DATE OF LEASE CONVERSION

 

(Continued an page 2)

4. (a) The undersigned certifies that:

(1) The offeror is a citizen of the United States; an association of such
citizens; a municipality; or a corporation organized under the laws of the
United States, any State or the District of Columbia; (2) All parties holding an
interest in the offer are in compliance with 43 CFR part 3200 and the
authorizing Act; (3) The offeror's chargeable interests, direct and indirect, do
not exceed those allowed under the Act; and (4) The offerer is not considered a
minor under the laws of the State in which the lands covered by this offer are
located.

(b) The undersigned agrees that signing this offer constitutes acceptance of
this lease, including all terms, conditions and stipulations of which the
offeror has been given notice, and any amendment or separate lease that may
cover any land described in this offer open to lease application at the time
this offer was filed but omitted for any reason from this lease. The offeror
further agrees that this offer cannot be withdrawn, either in whole or part,
unless the withdrawal is received by the proper BLM State Office before this
lease, an amendment to this lease, or a separate lease, whichever covers the
land described in the withdrawal, has been signed on behalf of the United
States.

This offer will be rejected and will afford the offeror no priority if it is not
properly completed and executed in accordance with the regulations or if it is
not accompanied by the required payments. Title 18 U.S.C.

Sec. 1001 makes it a crime for any person knowingly and willfully to make to any
Department or agency of the United States any false, fictitious, or fraudulent
statements or representations as to any matter within its jurisdiction.

Duly executed this day of , 20 ______

(Signature of Lessee or Attorney-in-fact)

LEASE TERMS

Sec.1. Rentals-Rentals must be paid to the proper office of the lessor in
advance of each lease year. Annual rental rates per acre or fraction thereof, as
applicable, are: (a) Noncompetitive lease (includes post-sale parcels not
receiving bids, a direct use lease or a lease issued to a mining claimant):
$1.00 for the first 10 years; thereafter $5.00; or (b) Competitive lease: $2.00
for the first year, $3.00 for the second through tenth year; thereafter $5.00.
Annual rental is always due by the anniversary date of this lease (43 CFR
3211.13), regardless of whether the lease is in a unit or outside of a unit, the
lease is in production or not, or royalties or direct use fees apply to the
production. Rental may only be credited toward royalty under 43 CFR 3211.15 and
30 CFR 218.303. Rental may not be credited against direct use fees. Failure to
pay annual rental timely will result in late fees and will make the lease
subject to termination in accordance with 43 CFR 3213.14.

Sec.2. (a) Royalties-Royalties must be paid to the proper office of the lessor.
Royalties are due on the last day of the month following the month of
production. Royalties will be computed in accordance with applicable regulations
and orders. Royalty rates for geothermal resources produced for the commercial
generation of electricity but not sold in an arm's length transaction are: 1.75
percent for the first 10 years of production and 3.5 percent after the first 10
years. The royalty rate is to be applied to the gross proceeds derived from the
sale of electricity in accordance with 30 CFR part 206 subpart H. The royalty
rate for byproducts derived from geothermal resource production that are
minerals specified in section 1 of the Mineral Leasing Act (MLA), as amended (30
U.S.C. 181), is 5 percent, except for sodium compounds, for which the royalty
rate is 2 percent for sodium produced between September 29, 2006 and September
29, 2011 (Pub. L. No. 109-338,

SEC 102; note to 30 U.S.C. 262). No royalty is due on byproducts that are not
specified in 30 U.S.C. SEC 181. (43 CFR 3211.19.) If this lease or a portion
thereof is committed to an approved communitization or unit agreement and the
agreement contains a provision for allocation of production, royalties must be
paid on the production allocated to this lease. (b) Arm's length
transactions-The royalty rate for geothermal resources sold by you or your
affiliate at arm's length to a purchaser is 10 percent of the gross proceeds
derived from the arm's-length sale (43 CFR 3211.17, 3231.18). (c) Advanced
royalties-In the absence of a suspension, if you cease-production for more than
one calendar month on a lease that is subject to royalties and that has achieved
commercial production, your lease will remain in effect only if you make
advanced royalty payments in accordance with 43 CFR 3212.15(a) and 30 CFR
218.305. (d) Direct use fees-Direct use fees must be paid in lieu of royalties
for geothermal resources that are utilized for commercial, residential,
agricultural, or other energy needs other than the commercial production or
generation of electricity, but not sold in an arm's length transaction (43 CFR
3211.18; 30 CFR 206.356). This requirement applies to any direct use of federal
geothermal resources (unless the resource is exempted as described in 30 CFR
202.351(b) or the lessee is covered by paragraph (e), below) and is not limited
to direct use leases. Direct use fees are due on the last day of the month
following the month of production. (e) If the lessee is a State, tribal, or
local government covered by 43 CFR 3211.18(a)(3) and 30 CFR 206.366, check here.
G A lessee under this paragraph is not subject to paragraph (d), above. In lieu
of royalties, the lessee under this paragraph must pay a nominal fee of $______.

Sec.3. Bonds. A bond must be filed and maintained for lease operations as
required by applicable regulations.

Sec.4. Work requirements, rate of development, unitization, and drainage-Lessee
must perform work requirements in accordance with applicable regulations (43 CFR
3207.11, 3207.12), and must prevent unnecessary damage to, loss of, or waste of
leased resources. Lessor reserves the right to specify rates of development and
production and to require lessee to commit to a communitization or unit
agreement, within 30 days of notice, if in the public interest. Lessee must
drill and produce wells necessary to protect leased lands from drainage or pay
compensatory royalty for drainage in the amount determined by lessor. Lessor
will exempt lessee from work requirements only where the lease overlies a mining
claim that has an approved plan of operations and where BLM determines that the
development of the geothermal resource on the lease would interfere with the
mining operation (43 CFR 3207.13).

Sec.5. Documents, evidence, and inspection-Lessee must file with the proper
office of the lessor, not later than (30) days after the effective date thereof,
any contract or evidence of other arrangement for the sale, use, or disposal of
geothermal resources, byproducts produced, or for the sale of electricity
generated using geothermal resources produced from the lease. At such times and
in such form as lessor may prescribe, lessee must furnish detailed statements
and all documents showing (a) amounts and quality of all geothermal resources
produced and used (either for commercial production or generation of
electricity, or in a direct use operation) or sold; (b) proceeds derived
therefrom or from the sale of electricity generated using such resources; (c)
amounts that are unavoidably lost or reinjected before use, used to generate
plant parasitic electricity (as defined in 30 CFR 206.351) or electricity for
lease operations, or otherwise used for lease operations related to the
commercial production or generation of electricity; and (d) amounts and quality
of all byproducts produced and proceeds derived from the sale or disposition
thereof. Lessee may be required to provide plats and schematic diagrams showing
development work and improvements, and reports with respect to parties in
interest.

In a format and manner approved by lessor, lessee must keep a daily drilling
record, a log, and complete information on well surveys and tests; keep a record
of subsurface investigations; and furnish copies to lessor when required. Lessee
must keep open at all reasonable times for inspection by any authorized officer
of lessor, the leased premises and all wells, improvements, machinery, and
fixtures thereon, and all books, accounts, maps, and records relative to
operations, surveys, or investigations on or in the leased lands. Lessee must
maintain copies of all contracts, sales agreements, accounting records, billing
records, invoices, gross proceeds and payment data regarding the sale,
disposition, or use of geothermal resources, byproducts produced, and the sale
of electricity generated using resources produced from the lease, and all other
information relevant to determining royalties or direct use fees. All such
records must be maintained in lessee's accounting offices for future audit by
lessor and produced upon request by lessor or lessor's authorized representative
or agent. Lessee must maintain required records for 6 years after they are
generated or, if an audit or investigation is underway, until released of the
obligation to maintain such records by lessor.

Sec. 6. Conduct of operations-Lessee must conduct operations in a manner that
minimizes adverse impacts to the land, air, and water, to cultural, biological,
visual, and other resources, and to other land uses or users. Lessee must take
reasonable measures deemed necessary by lessor to accomplish the intent of this
section. To the extent consistent with leased rights granted, such measures may
include, but are not limited to, modification to siting or design of facilities,
timing of operations, and specification of interim and final reclamation
measures. Lessor reserves the right to continue existing uses and to authorize
future uses upon or in the leased lands, including the approval of easements or
rights-of-way. Such uses will be conditioned so as to prevent unnecessary or
unreasonable interference with rights of lessee. Prior to disturbing the surface
of the leased lands, lessee must contact lessor to be apprised of procedures to
be followed and modifications or reclamation measures that may be necessary.
Areas to be disturbed may require inventories or special studies to determine
the extent of impacts to other resources. Lessor may require lessee to complete
minor inventories or short term special studies under guidelines provided by
lessor. If, in the conduct of operations, threatened or endangered species,
objects of historic or scientific interest, or substantial unanticipated
environmental effects are observed, lessee must immediately contact lessor.
Lessee must cease any operations that are likely to affect or take such species,
or result in the modification, damage or destruction of such habitats or
objects.

Sec. 7. Production of byproducts-If the production, use, or conversion of
geothermal resources from these leased lands is susceptible of producing a
valuable byproduct or byproducts, including commercially demineralized water for
beneficial uses in accordance with applicable State water laws, lessor may
require substantial beneficial production or use thereof by lessee.

Sec.8. Damages to property-Lessee must pay lessor for damage to lessor's
improvements, and must save and hold lessor harmless from all claims for damage
or harm to persons or property as a result of lease operations.

Sec.9. Protection of diverse interests and equal opportunity-Lessee must
maintain a safe working environment in accordance with applicable regulations
and standard industry practices, and take measures necessary to protect public
health and safety.

Lessor reserves the right to ensure that production is sold at reasonable prices
and to prevent monopoly. Lessee must comply with Executive Order No. 11246 of
September 24, 1965, as amended, and regulations and relevant orders of the
Secretary of Labor issued pursuant thereto. Neither lessee nor lessee's
subcontractor may maintain segregated facilities.

Sec.10. Transfer of lease interests and relinquishment of lease-As required by
regulations, lessee must file with lessor any assignment or other transfer of an
interest in this lease. Subject to the requirements of 43 CFR subpart 3213,
lessee may relinquish this lease or any legal subdivision by filing in the
proper office a written relinquishment, which will be effective as of the date
BLM receives it, subject to the continued obligation of the lessee and surety to
be responsible for: paying all accrued rentals and royalties; plugging and
abandoning all wells on the relinquished land; restoring and reclaiming the
surface and other resources; and complying with 43 CFR 3200.4.

Sec.11. Delivery of premises-At such time as all or portions of this lease are
returned to lessor, lessee must place all wells in condition for suspension or
abandonment, reclaim the land as specified by lessor, and within a reasonable
period of time, remove equipment and improvements not deemed necessary by lessor
for preservation of producible wells or continued protection of the environment.

Sec.12. Proceedings in case of default-If lessee fails to comply with any
provisions of this lease or other applicable requirements under 43 CFR 3200.4,
and the noncompliance continues for 30 days after written notice thereof, this
lease will be subject to termination in accordance with the Act and 43 CFR 3213.
This provision will not be construed to prevent the exercise by lessor of any
other legal and equitable remedy or action, including waiver of the default. Any
such remedy, waiver, or action will not prevent later termination for the same
default occurring at any other time.

Whenever the lessee fails to comply in a timely manner with any of the
provisions of the Act, this lease, the regulations, or other applicable
requirements under 43 CFR 3200.4, and immediate action is required, the lessor
may enter on the leased lands and take measures deemed necessary to correct the
failure at the lessee's expense.

Sec.13. Heirs and successors-in-interest-Each obligation of this lease will
extend to and be binding upon, and every benefit hereof will inure to, the
heirs, executors, administrators, successors, or assigns of the respective
parties hereto.

Instructions

A. General

 1. Items 1 and 2 need to be completed only by parties filing for a
    noncompetitive lease. The BLM will complete the front of the form for other
    types of leases. The BLM may use the Comments space under Item 3 to identify
    when: the lessee has elected to make all lease terms subject to the Energy
    Policy Act of 2005 under 43 CFR 3200.7(a)(2) or 43 CFR 3200.8(b) (box
    labeled converted lease must also be checked); the lease is being issued
    noncompetitively to a party who holds a mining claim on the same lands as is
    covered by the lease under 43 CFR 3204.12; the lease is a direct use lease
    issued to a State, local, or tribal government (box at section 2(d) under
    Lease Terms must also be checked); the lease is a competitive lease with
    direct-use-only stipulations attached; or other circumstances exist. A
    lessee who seeks to convert only the royalty rate of a lease under 43
    CFR 3212.25 or who qualifies for a case-by case royalty rate determination
    under 43 CFR 3211.17(b)(1)(i) should not use this form, but should instead
    use an addendum to the existing lease.
 2. Entries must be typed or printed plainly in ink. The offeror must sign the
    form (item 4) in ink.
 3. An original and two copies of this offer must be prepared and filed in the
    proper BLM State Office. See regulations at 43 CFR 1821.10 for office
    locations.
 4. If more space is needed, additional sheets must be attached to each copy of
    the form submitted.

B. Specific

Item 1-Enter the offeror's name and billing address.

Item 2-Indicate the agency managing the surface use of the land and the name of
the unit or project of which the land is a part. The offeror may also provide
other information that will assist in establishing status of the lands. The
description of land must conform to 43 CFR 3203.10. Total acres applied for must
not exceed that allowed by regulations (43 CFR 3203.10; 43 CFR 3206.12).

Payments: For noncompetitive leases, the amount remitted must include the
processing fee for noncompetitive lease applications (43 CFR 3204.10; 43
CFR 3000.12) and the first year's rental at the rate of $1 per acre or fraction
thereof. If the United States owns only a fractional interest in the geothermal
resources, you must pay a prorated rental under 43 CFR 3211.11(d). The BLM will
retain the processing fee even if the offer is completely rejected or withdrawn.
To maintain

the offeror's priority, the offeror must submit rental sufficient to cover all
the land requested. If the land requested includes lots or irregular
quarter-quarter sections, the exact acreage of which is not known to the
offeror, rental should be submitted on the basis of each such lot or
quarter-quarter section containing 40 acres. If the offer is withdrawn or
rejected in whole or in part before a lease issues, the BLM will return the
rental remitted for the parts withdrawn or rejected.

The BLM will fill in the processing fee for competitive lease applications (43
CFR 3203.17; 43 CFR 3000.12) and the first year's rental at the rate of $2 per
acre or fraction thereof.

Item 3-The BLM will complete this space.

PAPERWORK REDUCTION ACT STATEMENT

This information is being collected pursuant to law and regulations (30
U.S.C. 1000 et seq.; 43 CFR Part 3200). This information will be used to create
and maintain a record of geothermal lease activity.

3. Response to this request is required to obtain a benefit.

NOTICE

The Privacy Act of 1974 and the regulation at 43 CFR 2.48(d) provide that you be
furnished with the following information in connection with information required
by this geothermal lease application.

AUTHORITY: 30 U.S.C. 1000 et seq.

PRINCIPAL PURPOSE-The information is to be used to process geothermal lease
applications. ROUTINE USES:

(1) The adjudication of the lessee's rights to the land or resources.

 2. Documentation for public information in support of notations made on land
    status records for the management, disposal, and use of public lands and
    resources.
 3. Transfer to appropriate Federal agencies when concurrence is required prior
    to granting uses or rights in public lands or resources.

(4) Transfer to the appropriate Federal, State, local, or foreign agencies, when
relevant to civil, criminal, or regulatory investigations or prosecutions.

EFFECT

OF NOT PROVIDING INFORMATION-If all the information is not provided, the offer
may be rejected. See regulations at 43 CFR Part 3200.

ENDANGERED SPECIES ACT
SECTION 7 CONSULTATION STIPULATION

The lease area may now or hereafter contain plants, animals, or their habitats
determined to be threatened, endangered, or other special status species. BLM
may recommend modifications to exploration and development proposals to further
its conservation and management objective to avoid BLM-approved activity that
will contribute to a need to list such a species or their habitat. BLM may
require modifications to or disapprove proposed activity that is likely to
result in jeopardy to the continued existence of a proposed or listed threatened
or endangered species or result in the destruction or adverse modifications of a
designated or proposed critical habitat. BLM will not approve any
ground-disturbing activity that may affect any such species or critical habitat
until it completes its obligations under applicable requirements of the
Endangered Species Act, 16 USC Sec. 1531 et seq., as amended, including
completion of any required procedure for conference or consultation.

CULTURAL RESOURCE PROTECTION
LEASE STIPULATION

This lease may be found to contain historic properties or resources protected
under the National Historic Preservation Act, American Indian Religious Freedom
Act, Native American Graves Protection and Repatriation Act, EO 13007, or other
statutes and executive orders. The BLM will not approve any ground-disturbing
activities that may affect any such properties or resources until it completes
its obligations under applicable requirements of the NHPA and other authorities.
The BLM may require exploration or development proposals to be modified to
protect such properties, or it may disapprove any activity that is likely to
result in adverse effects that could not be successfully avoided, minimized, or
mitigated.

Form 3000-2

(January 2007)

FORM APPROVED
OMB NO. 1004-0074

Expires: December 3 l , 2009

State

UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT

COMPETITIVE OIL AND GAS OR
GEOTHERMAL RESOURCES LEASE BID

30 U.S.C. 181 et seq.; 30 U.S.C. 351-359;
30 U.S.C.1001-1025; 42 U.S.C. 6508

Date of Sale

PARCEL NUMBER

AMOUNT OF BID

(see instructions below)

TOTAL BID

PAYMENT SUBMITTED
WITH BID

THE BID IS FOR

(check one):

[]Oil and Gas Parcel Number

[x]Geothermal Parcel Number

Name of Known Geothermal Resource Area (KGRA)

The appropriate regulations applicable to this bid are: (1) for oil and gas
leases--43 CFR 3120; (2) for National Petroleum Reserve-Alaska (NPR-A)
leases--43 CFR 3132; and (3) for Geothermal resources leases--43 CFR 3220.

(See details concerning lease qualifications on next page.)

I CERTIFY THAT I have read and am in compliance with; and not in violation of
the lessee qualification requirements under the applicable regulations for this
bid.

I CERTIFY THAT this bid is not in violation of 18 U.S.C. 1860 which prohibits
unlawful combination or intimidation of bidders. I further certify that this bid
was arrived at independently and is tendered without collusion with any other
bidder for the purpose of restricting competition.

IMPORTANT NOTICE:

Execution of this form where the offer is the high bid, constitutes a binding
lease offer including all applicable terms and conditions. Failure to comply
with the applicable laws and regulations under which this bid is made will
result in rejection of the bid and forfeiture of all monies submitted.

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Print or Type Name of Lessee

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Address of Lessee

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Signature of Lessee or Bidder

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City State Zip

 

INSTRUCTIONS FOR OIL AND GAS BID
(Except NPR-A)

1. Separate bid for each parcel is required. Identify parcel by the parcel
number assigned in the

Notice of Competitive Lease Sale.

2. Bid must be accompanied by the national minimum acceptable bid, the first
year's rental and the administrative fee. The remittance must be in the form
specified in 43 CFR 3103.1-1. The remainder of the bonus bid, if any, must be
submitted to the proper Bureau of Land Management (BLM) office within 10 working
days after the last day of the oral auction. Failure to submit the remainder of
the bonus bid within 10 working days will result in rejection of the bid offer
and forfeiture of all monies paid.

3. If the bidder is not the sole party in interest in the lease for which the
bid is submitted, all other parties in interest may be required to furnish
evidence of their qualifications upon written request by the BLM.

4. This bid may be executed

(signed) before the oral auction. If signed before the oral auction, this form
cannot be modified without being executed again.

5.

In view of the above requirement (4), the bidder may wish to leave the AMOUNT OF
BID section blank so that final bid amount may be either completed by the bidder
or the BLM at the oral auction.

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Title 18 U.S.C. Section 1001 and Title 43 U.S.C. Section 1212 make it a crime
for any person knowingly and willfully to make to any department or agency of
the United States any false, fictitious or fraudulent statements or
representations as to any matter within its jurisdiction.

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