Exhibit 10.4.12


                                 LEASE AGREEMENT

              THIS AGREEMENT, made and entered into as of the 17 day of March,
1964, by and between HELEN S. FUGATE, a widow hereinafter called "Lessor"
(whether one or more) and STANDARD OIL COMPANY OF CALIFORNIA, a corporation ,
hereinafter called "Lessee,"

                               W I T N E S S E T H

              1. Lessor, for and in consideration of the sum of $10 in hand
paid, and of the royalties herein provided and of the covenants and agreements
hereinafter contained, hereby grants, demises, leases and lets unto Lessee, the
land hereinafter described with the sole and exclusive right to Lessee to drill
for, produce, extract, take and remove therefrom water, brine, steam, steam
power, minerals (other than oil), salts, chemicals, gases (other than gas
associated with oil), and other products produced or extracted by Lessee from
any thereof. Each of the foregoing is hereinafter sometimes termed "a lease
product" and all thereof are sometimes termed "the lease products." For the same
consideration Lessee is hereby granted the right to store, utilize, process,
convert, and otherwise use such lease products upon said land and to sell the
same or any part thereof off said land during the term hereof, with the right of
entry thereon at all times for said purposes, and to construct, use, maintain,
erect, repair and replace thereon, and to remove therefrom all roads, pipelines,
ditches and lanes, telephone and telegraph lines, utility installations, power
lines, poles, tanks, evaporation or settling basins, extraction or processing
plants, machinery, equipment, buildings, electric power plants, and equipment
for generation and transmission of steam power, and electric power, and for the
handling, treatment or storage of lease products, and all structures and
facilities relating thereto, which Lessee may desire to erect, construct or
install in carrying on Lessee's business and operations on or from said land and
other lands in the vicinity of said land; and Lessee shall have the further
right to erect, maintain, operate and remove a plant or plants, structures and
facilities, with all necessary appurtenances for the conversion of steam to
electric power, and for the extraction of lease products from steam, brine or
water produced from said land, and other lands in the vicinity of said land,
including all rights necessary or convenient thereto, together with rights of
way for passage over, upon and across and ingress and egress to and from said
land for any or all of the above mentioned purposes. Lessee shall also have the
right to dispose of waste brine and other waste products in a well or wells
drilled or converted for that purpose on the leased land or on other land in the
vicinity, and the right to inject water, brine, steam and gases in a well or
wells on said land or such other land for the purpose of maintaining or
restoring pressure in the productive zones beneath said land or other land in
the vicinity thereof. The said land included in this lease is situated in the
County of Imperial, State of California, and is described as follows, to wit:

              Tract No. 44 Township 16 South, Range 14 East, S.B.M. containing
80 acres of land more or less.

This lease shall cover all the interest in said land now owned or hereafter
acquired by Lessor, even though greater than the undivided interest (if any)
described above. For the purpose of calculating any payments based on acreage,
Lessee, at Lessee's option, may act as if said land and its constituent parcels
contain the acreage above stated, whether they actually contain more or less.



              2. Subject to the other provisions herein contained, this lease
shall remain in force for a period of twenty (20) years from the date hereof,
called the "primary term," and thereafter so long as lease products, or any one
or more of them, is produced from, or Lessee is engaged in drilling, extraction,
processing or reworking operations on said land hereunder or on land pooled or
unitized with said land, as provided in Section 19 hereof, (said land, together
with such pooled or unitized land, being hereinafter sometimes called "the unit
area").

              3. Lessee shall pay to Lessor, on or before the last day of each
calendar month, the royalties accrued and payable for the preceding calendar
month, and in making such payments Lessee shall furnish to Lessor statements
setting forth the basis for computation of such royalty.

As royalty and rental, Lessee shall pay to Lessor 10% of the value at the well
of all lease products produced, saved and sold. As used herein, the term "value
at the well" shall mean the actual price received by Lessee for the sale of
lease products at the well. If such products are not sold by Lessee at the well
but are sold at a plant or plants on or in the vicinity of said land, then the
value at the well shall be determined by deducting from the actual price
received by Lessee for the sale of such lease products all costs and expenses
incurred by Lessee in transporting, manufacturing, processing and otherwise
handling such lease products prior to the actual sale thereof. If lease products
are not sold by Lessee at the well or at such a plant but are otherwise used by
Lessee in its chemical operations or disposed of for value, then the value of
such lease products at the well shall be determined by deducting from the price
thereof at the nearest point where the same or similar products are sold in
substantial quantities, the cost of transporting, manufacturing, processing and
otherwise handling such lease products prior to sale thereof. Lessee shall
meter, gauge or otherwise determine the volume and quality of all lease products
commingled and such metering or gauging shall furnish the basis for computing
Lessor's royalties hereunder. Lessee may use, free of royalty, steam, steam
power, electric power, and water developed from said land by Lessee, for all
operations hereunder, and Lessee shall not be required to account to Lessor for,
or pay royalty on any lease product or products reasonably lost or consumed in
operations hereunder.

              4. Lessee agrees to commence drilling, extraction or processing
operations on said land or on the unit area within the period of thirty (30)
years from the date hereof and to prosecute such operations with reasonable
diligence until lease products or any thereof shall have been found, extracted
and processed in quantities deemed paying quantities by Lessee, or until further
operations would, in the judgment of Lessee, be unprofitable or impracticable,
or Lessee may at any time within said primary term terminate this lease and
surrender said land provided that, commencing with the 17th day of March, l965,
if Lessee has not theretofore commenced any such operations on said land or on
the unit area or terminated this lease, Lessee shall pay or tender to Lessor
annually, in advance, as rental, the sum of Eight-hundred and no/100 DOLLARS
($800.00) (each of such annual periods being hereinafter referred to as "rental
period") until operations are commenced on said land or lands which have been
pooled or unitized therewith, pursuant to paragraph 19 hereof, or this lease
terminated as herein provided; it being understood that in the event of the
surrender or termination of this lease as to any portion or portions of the land
covered thereby, said rental shall be reduced proportionately as provided in
paragraph 16 hereof. The consideration expressed in paragraph 1 hereof covers
all rental to the date last above mentioned. If Lessee shall elect not to
commence operations on said land or on the unit area during the primary term, as
above provided, this lease shall terminate.

                                       2


              It is expressly understood and agreed by the parties hereto:

                  a.  That if within 10 years from the date hereof Lessee has
                      not completed one or more wells or a processing plant on
                      the unit area or on said land, capable of producing or
                      processing lease products or any thereof in quantities and
                      quality deemed paying quantities by Lessee, then Lessor
                      may, at his option, terminate this lease; and

                  b.  That if within 15 years from the date hereof Lessee has
                      not made or arranged for a sale or sales of lease products
                      or any thereof, produced from or allocated to said land,
                      then Lessor may, at his option, terminate this lease.

              5. If at any time or times after the primary term or within three
(3) months before expiration of the primary term, all operations and all
production hereunder on said land or on the unit area shall cease for any cause
other than those for which specific provision is made herein, this lease shall
not terminate if Lessee shall commence or resume drilling, processing,
extraction or reworking operations or production within three (3) months after
such cessation.

              6. Lessee shall be obligated to produce only such quantity or
quantities of lease products as it may be able to market at the well or wells,
plant or plants. It is recognized that the market demand for lease products may
vary from time to time and during such periods as there is no market at the
wells or plant for any lease product or products, Lessee's obligation to
produce, process and extract such lease product or products shall be suspended.

Subject to the foregoing and except as herein otherwise provided, it is agreed
that the Lessee shall drill such wells and operate each completed well with
reasonable diligence and in accordance with good operating practice so long as
such wells shall produce lease products in paying quantities while this lease is
in force as to the portion of said land on which such well or wells are
situated; but in conformity with any reasonable conservation program affecting
the drilling of wells or the production of lease products from said land, which
the Lessee may either voluntarily or by order of any authorized governmental
agency adopt, subscribe to or be subject to.

              7. The possession by Lessee of said land shall be sole and
exclusive excepting only that Lessor reserves the right to occupy and use or to
lease the surface of said land for agricultural, horticultural or other surface
uses, except those granted to Lessee hereunder, which uses shall be carried on
by Lessor subject to, and with no interference with, the rights or operations of
Lessee hereunder. No well shall be drilled closer than 100 feet to any residence
or barn now on said land without written consent of Lessor. Lessee shall pay for
damages caused by Lessee's operations to houses, barns, growing crops, fences
and irrigation systems. Lessee shall have the right to drill such wells on said
land as Lessee may deem desirable for the purposes hereof and Lessee shall
utilize or use only so much of said land as is necessary or reasonably
convenient for Lessee's operations hereunder and shall interfere as little as
reasonably necessary with the use and occupancy of said land by Lessor. No
default of Lessee hereunder with respect to any well, or portion of this lease,
shall impair Lessee's rights with respect to any other well or portion of this
lease.

                                       3



              8. The rights of Lessor and Lessee hereunder may be assigned in
whole or in part. No present or future division of Lessor's ownership as to
different portions or parcels of said land shall operate to enlarge the
obligations or diminish the rights of Lessee, and Lessee's operations may be
conducted without regard to any such division. If all or any part of this lease
is assigned, no leasehold owner shall be liable for any act or omission of any
other leasehold owner, and failure by one to pay rental shall not affect the
rights of others--rental being apportionable in proportion to acreage.

              9. The obligations of Lessee hereunder shall be suspended (but
without impairment of Lessor's rights under (a) and (b) of paragraph 4 hereof)
while Lessee is prevented or hindered from complying therewith in part or in
whole, by strikes, lockouts, labor distrubances, acts of God, unavoidable
accidents, laws, rules, regulations or orders of any Federal, state, municipal
or other governmental agency, acts of war or conditions arising out of or
attributable to war, shortage of necessary material, equipment or labor, or
restrictions in, or limitations upon the use thereof, inability to secure or
absence of a market for the sale of lease products which can be produced or
recovered in commercial quantities from said land, delays in transportation, and
also matters beyond the control of Lessee, whether similar to the matters herein
specifically enumerated or not. This lease shall remain in full force and effect
during any suspension of Lessee's obligations under any provisions of this
paragraph, and for a reasonable time thereafter, provided that after the removal
of the cause or causes preventing or hindering the performance of such
obligation, Lessee, subject to the other provisions of this Lease, diligently
commences or resumes the performance of such obligation. Notwithstanding
anything to the contrary herein provided, if any of Lessee's obligations
hereunder conflict with or violate the provisions of any reasonable conservation
program or plan of orderly development, whether now or hereafter adopted, to
which Lessee may voluntarily subscribe, or of any conservation program or plan
which is now or may hereafter be prescribed by any order of any governmental
agency, Lessee shall not be obligated to perform such obligation.

              10. If Lessee shall fail to pay any installment of royalty or
rental when due and if such default shall continue for a period of 15 days after
receipt by Lessee of written notice thereof from Lessor to Lessee, then at the
option of Lessor, this lease shall terminate as to the portion or portions
thereof as to which Lessee is in default; provided, however, that if there be a
bona fide dispute as to the amount due and all undisputed amounts are paid, said
15-day period shall be extended until 5 days after such dispute is settled by
final court decree, arbitration or agreement.

If lessee shall be in default in the performance of any obligations under this
Lease, other than the payment of rentals or royalties, and if, for a period of
90 days after written notice is given to Lessee by Lessor of such default,
Lessee shall fail to commence and thereafter diligently and in good faith
prosecute action to remedy such default, Lessor may terminate this Lease.

              11. Lessee shall pay all taxes that may be levied against the
improvements, plant, machinery and personal property owned by Lessee and located
upon any part of said land.

                                       4


              12. Lessee shall also pay Lessee's share of any and all taxes
assessed during the term of this lease upon any products of Lessee's operations
hereunder, together with Lessee's share of all severance, production and license
taxes or other taxes or assessments levied or assessed on account of the
production of lease products or any thereof on or from said land, or on or from
such portion of said land as Lessee may be holding under this lease on the date
of such tax lien.

              13. Lessor agrees to pay Lessor's share of any and all taxes
assessed upon any products of Lessee's operations hereunder, together with
Lessor's share of all severance, production and license taxes or other taxes or
assessments levied or assessed on account of the production of lease products
from said land and to pay all, other taxes assessed against said land, whether
the same are assessed to Lessor or Lessee or otherwise, and Lessee is hereby
authorized to pay all such taxes and assessments on behalf of Lessor and to
deduct the amount so paid from any royalties or moneys due Lessor hereunder.
"Lessee's share" and "Lessor's share", as used above refers to Lessee's and
Lessor's respective proportionate parts of the gross proceeds from the sale of
any and all lease products produced, saved and sold from said land by Lessee or
allocated to said land under the terms of any unit or pooling plan during the
preceding calendar year.

              14. All royalties, rentals and other payments payable in money
hereunder shall be paid to Lessor by Lessee mailing or delivering a check
therefor to Lessor at 515 - Sandalwood Drive, El Centro, California, or Lessee
may, at its option, pay any or all royalties, rentals and other payments payable
in money hereunder by mailing or delivering a check therefor to Bank of America
at El Centro, California its successors and assigns, herein designated by Lessor
as depositary, hereby granting to said depositary full power and authority on
behalf of Lessor and on behalf of the heirs, executors, administrators,
successors and assigns of Lessor, and each of them, to collect and receipt for
all sums of money due and payable from Lessee to Lessor hereunder, and to settle
all accounts and accounting of rentals, royalties and other payments payable in
money hereunder. No change in the ownership of the land or minerals covered by
this lease and no assignment of rentals or royalties shall be binding upon
Lessee or the depositary until both Lessee and the depositary have been
furnished with written evidence thereof satisfactory to them. Said depositary
above named shall continue to act as such until the owners and holders of at
least two-thirds of Lessor's estate hereunder shall in writing designate a
different depositary and notify Lessee in writing at P.O. Box 3495, San
Francisco, California, 94120, of the name and address of such new depositary.
The payment of any and all rentals, royalties and other payments hereunder by
Lessee to the depositary designated herein or to any other depositary hereafter
designated by Lessor, as aforesaid, shall be a full acquittance and discharge of
Lessee of and from any and all liability to Lessor, and to the heirs, executors,
administrators, successors and assigns of Lessor, and each of them, for any part
of such rentals, royalties or other payments, and Lessee will not be responsible
at any time for the disposition or disbursement by any such depositary of all or
any part of any moneys received by it hereunder.

              15. It is agreed that if Lessor owns a less interest in the sole
and exclusive rights herein granted Lessee, than the entire and undivided fee
simple estate therein, then any royalties, rentals and other payments herein
provided for shall be paid Lessor only in the proportion which Lessor's interest
bears to the whole and undivided fee. In the event Lessee's estate hereunder
shall fail, for a cause other than Lessee's default hereunder, in regard to any
portion of said land or any interest therein, such failure shall not affect or
invalidate Lessee's estate hereunder in

                                       5


regard to the remaining portions of said lands or the remaining interests
therein and this lease shall nevertheless continue in full force and effect with
respect to said remaining portions of said land or remaining interests therein,
and Lessee shall not be accountable to Lessor for any payment theretofore made
with respect to said portion of said land or such interest in regard to which
Lessee's estate hereunder has failed. If and whenever it shall be necessary so
to do in order to protect Lessee's interest under this lease, Lessee may at its
option pay and discharge at any time any mortgage or other lien now or hereafter
attaching to said land or any part thereof and in such event lessee shall be
subrogated to all of the rights of the owner or holder of such mortgage or other
lien and Lessee may in addition thereto, at its option, apply to the discharge
of any such mortgage or other lien, or to the reimbursement to lessee for any
amount so paid by it, any rentals, royalties or other sums accruing or payable
hereunder, to the owner of the lands to which such mortgage or other lien
attaches.

              16. Lessee may at any time or times surrender this lease as to all
or any portion of said land and be relieved of all obligations thereafter
accruing as to the acreage surrendered, and thereafter the rental shall be
reduced in the same proportion that the acreage covered hereby is reduced. In
the event this lease shall be surrendered under the provisions of this
paragraph, or assigned as hereinabove provided as to any portion or portions of
said land, Lessee shall have such rights of way or easements hereunder, over,
upon and across the land as to which this lease is so surrendered or assigned as
shall be necessary or convenient for Lessee' s operations on the land retained
by it and other lands in the vicinity thereof. Upon any surrender or assignment
of this lease as to all or any portion of said land, Lessee shall be relieved of
all further obligations hereunder with respect to the lands so surrendered or
assigned. Any such surrender shall become effective upon delivery to Lessor, or
to the depositary bank herein designated, or the deposit in the United States
mail, postage prepaid, of a duly executed duplicate of an instrument of
surrender properly addressed to Lessor or to such depositary bank. Within a
reasonable time thereafter, Lessee shall record the original of such instrument
of surrender.

              17. Lessee shall have the right at any time and from time to time
during the continuance hereof and within a reasonable time after the surrender
or any termination of this lease, to remove from said land all equipment,
machinery, installations, and any other property or improvements belonging to or
furnished by Lessee or Lessee's permitees.

              18. All labor to be performed and material to be furnished in the
operations of Lessee hereunder shall be at the cost and expense of Lessee, and
Lessor shall not be chargeable with nor liable for any part thereof. Lessee
shall protect said land from liens arising from Lessee's operations thereon.

              19. (a) Lessee is given the sole right and option by written
declaration of pooling at any time or from time to time, within twenty (20)
years from the date hereof, to combine, pool or unitize in whole or in part as
to any stratum or strata all or any part of said lands with other lands not
subject to this lease so as to create one or more reasonably compact operating
units for any operating or producing purpose. Such written declaration of
pooling shall describe the pooled lands and shall become effective when recorded
in the Office of the County Recorder in the county where the land is situated.
Lessee shall give written notice of such pooling to those Lessors whose lands
are so pooled. Lessors agree that with respect to all lease products obtained
from any lands included within any such operating unit, whether or not from
lands covered by

                                       6


this lease, there shall be allocated to and deemed to have been produced from
the lands covered by this lease and included in such operating unit, only that
proportion of the entire production from such operating unit that the amount of
acreage within the lands herein leased and included in such operating unit bears
to the total acreage of all of the land in such operating unit, and royalty
payable under this lease with respect to leased land included in such operating
unit shall be computed only on that portion of such production so allocated to
such leased lands. The entire acreage so pooled or unitized shall be treated as
if it were covered by one lease and the drilling of a well or performance of any
other obligations in any part of such operating unit, whether or not on land
subject to this lease, shall fulfill Lessee's drilling and other obligations
under this lease to the same extent as if such well were drilled and other
obligations performed on land subject to this lease. No offset obligation shall
accrue under this lease as a result of any well drilled within any such
operating unit. Lessee may, at its sole option, at any time when there is no
production in such operating unit of lease products in quantities deemed paying
by Lessee terminate such operating unit by a written declaration thereof, in the
same manner in which it was created.

              (b) Lessee is hereby granted the right at any time or times within
the period hereinafter provided to unitize this lease and the lands covered
hereby, in whole or in part or as to any stratum or strata, with other lands and
leases and to increase or decrease the size of any such unit. Any change in the
amount of Lessor's royalties resulting from unitization of this lease or from
any increase or decrease in the size of any such unit shall not be retroactive.
In the event of any such unitization, this lease, unless sooner terminated by
Lessee, shall continue in effect for so long as any of the lands hereby leased
remain subject to such unit. The drilling and producing operations conducted on
any of the unitized lands shall constitute full compliance with the drilling and
producing obligations of Lessee hereunder and Lessor shall be entitled to the
royalties in this lease provided, on the fractional part only, if any, of the
unit production allocated to this lease in accordance with the provisions of
said unit. The method of allocation of production from lands subject to said
unit shall be set forth therein and may be based upon the surface acreage or the
estimated volumetric content of recoverable lease products, or any weighing of
either or both thereof, of lands within such unit or within the estimated
productive limits of such unit, or such allocation may be made upon any other
basis approved by State or Federal authorities having jurisdiction thereof. The
provisions of this paragraph authorizing the establishment and enlargement or
contraction of such unit and change of the ratio of participation thereunder
shall not extend beyond the period of twenty (20) years from the date of this
lease; provided, however, that if such unit is established before the expiration
of said twenty-year period, such unit may continue in effect beyond said
twenty-year period. Any such unit may be established, enlarged, or diminished,
and, in the absence of production therefrom, may be dissolved by Lessee's filing
for record an instrument so declaring. A copy of such instrument shall be
delivered to Lessor or to the depositary.

              20. Whenever used herein, the expression "drilling operations"
shall mean, for all purposes hereof, any work or actual operations undertaken or
commenced for the purpose of drilling of a well, including without limiting the
generality hereof, the preparation of the ground therefor, the building of roads
and other facilities therefor, the construction of a derrick and other necessary
structures for the drilling of a well followed by the actual operation of
drilling in the ground. Any such work or operations preliminary to the drilling
in the ground may be

                                       7


undertaken in any order Lessee shall see fit. All such work and operations shall
be prosecuted with reasonable diligence.

              21. This agreement may be executed in any number of counterparts
with the same force and effect as if all parties signed the same document.

              22. This lease shall be binding upon all who execute it, whether
or not they are named in the granting clause hereof and whether or not all
parties named in the granting clause execute this lease. All the provisions of
this lease shall inure to the benefit of and be binding upon the heirs,
executors, administrators, successors and assigns of Lessor and Lessee.

IN WITNESS WHEREOF, the parties hereto have executed this agreement.



STANDARD OIL COMPANY OF AMERICA

By:  /s/ Indecipherable
   ------------------------------------        ---------------------------------
   Contract Agent

By:  /s/ Indecipherable                         /s/ Helen S. Fugate
   ------------------------------------        ---------------------------------
   Assistant Secretary                                  HELEN S. FUGATE


   ------------------------------------        ---------------------------------
              LESSEE                                        LESSOR


           Witness to the above signature(s)  /s/ Kenneth B. Masre
                                            -----------------------------




                                       8



                                                             BOOK 1678 PAGE 1069

                                DOLORES PROVEHCIO

                                COUNTY RECORDER

                               BOOK 1678 PAGE 1069                   -----------
                               '91 JUL 30 PA 2 23                    REG      $5
                                                                     -----------
                                OFFICIAL RECORDS                     RIF      $3
                              IMPERIAL COUNTY, CA                    -----------
                                                                     MC       $1
                                                                     -----------
                                                                     NIL      $_
                                                                     -----------
                                                                     TOTAL    $9
                                                                     -----------

RECORDING REQUESTED BY AND

     Return to:
     CHEVION RESOURCES COMPANY                                    LEASE # 226420
     LAND & LEGAL DEPARTMENT
     P.O. BOX 5049
     SAN RAMON, CA 94583-0949

                            ROYALTY PAYMENT AGREEMENT

     WHEREAS, HELEN S. FUGATE, as Lessor and STANDARD OIL COMPANY OF CALIFORNIA,
as Lessee, entered into that certain Lease Agreement, ("Said Lease)" dated March
17, 1964 and recorded in the Office of the County Recorder of Imperial County,
California in Book 1193, Page 42 et seq, as amended, whereby Lessor did grant,
let and lease unto Lessee for the purposes stated therein, the following
described land, ("Said Land"):

          Tract 44, Township 16 South, Range 14 East SBM, Imperial County,
          California

     AND, WHEREAS, by Decree of Final Distribution in the Estate of Helen S.
Fugate, deceased, Superior Court of Imperial County, Case No. 9694 dated August
13, 1976 and recorded in Book 1390, Page 1830 of said official records, Lessor's
interest in said lease vested in Norman E. Wallace and Norman E. Wallace,
Trustee, each as to an undivided one half interest, and

     WHEREAS, by mesne conveyance, Lessee's interest is now vested in Chevron
Geothermal Company of California, and

     WHEREAS, Said Land ("Unit Tract 61") was designated for development and
operation by the Heber Geothermal Unit Agreement recorded in Book 1437, Page
1277 of said Official Records and Lessors were receiving royalty payments In
accordance with said Lease and Unit Agreement, and

     WHEREAS, by Decree of Final Distribution in the Estate of Norman Elliot
Wallace, deceased, Superior Court of San Diego County, Case No. 150960 dated
March 4, 1991 and recorded in Book 1671, Page 554 of said Official Records,

                                    ORIGINAL
--------------------------------------------------------------------------------



                                                             BOOK 1678 PAGE 1070

                                                                  LEASE # 226420

Norman E. Wallace's undivided one-half interest in said lease is now vested in
Rowan Sokolowski as a life tenant and Clairemont Mesa Masonic Lodge No. 799 as
remainderman.

     The undersigned parties hereby agree that the royalties paid under said
unit tract 61 as to the aforementioned undivided one-half interest shall be paid
to Rowan Sokolowski during her lifetime and thereafter revert to Clairemont Mesa
Masonic Lodge No. 799.

     All payments as provided for herein shall constitute full and proper
compliance with the payment provisions of said lease. Said parties hereby agree
to indemnify and hold harmless, Chevron Geothermal Company of California, its
successors and assigns ("Chevron") from any claims brought against Chevron
arising from Chevron relying on this royalty payment agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
dates set forth below to be effective June 1, 1991.

                                             Lessors:


                                             /s/ Rowan Sokolowski
7-15-91                                      -----------------------------------
Date                                         Rowan Sokolowski
                                             Life Tenant

                                             CLAIREMONT MESA MASONIC
                                             LODGE NO. 799, Remainderman


July 15, 1991                                By: /s/ Illegible
Date                                             -------------------------------


                                        2



                                                             BOOK 1678 PAGE 1071

                                                                  LEASE # 226420

State of California   )
                      ) ss
County of SAN DIEGO   )

     On JULY 15, 1991, before me, SIDNEY E. TAMBURINE, Notary Public, personally
appeared WILLIAM S. HERTIG, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person(s) whose name(s) is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/their authorized capacity, and that by his signature(s) on the Instrument
the person, or the entity upon behalf of which the person(s) acted, executed the
Instrument.

     WITNESS my hand and official seal.


                                                  ------------------------------
Signature /s/ Illegible                                   OFFICIAL SEAL
          ------------------------------               SIDNEY E. _________
                                                     NOTARY PUBLIC CALIFORNIA
                                                         SAN _____ COUNTY
                                                  MY _____ _______ OCT. 31, 19_4
                                                  ------------------------------
                                                  (Seal)

State of California   )
                      ) ss
County of SAN DIEGO   )

     On JULY __, 1991, before me, SIDNEY E. TAMBURINE, Notary Public, personally
appeared ROWAN SOKOLOWSKI, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that she executed the same in her
authorized capacity, and that by her signature(s) on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                                  ------------------------------
Signature /s/ Illegible                                   OFFICIAL SEAL
          ------------------------------               SIDNEY E. __________
                                                     NOTARY PUBLIC CALIFORNIA
                                                         SAN _____ COUNTY
                                                  MY _____ _______ OCT. 31, 19_4
                                                  ------------------------------
                                                  (Seal)


                                        3



RE______________________       BOOK 1483 PAGE 1171             DOLORES PROVENCIO
TITLE RESURRANCE & TRUST CO.                                    COUNTRY RECORDER

RETURN TO: 226423                                            APR 22 8 33 AM'B2
                                                            BOOK 1483 PAGE 1171
                                                             OFFICIAL RECORDS
                                                         IMPERIAL COUNTY, CALIF.

Chevron Geothermal Company       NO TAX DUE - FEE $28.00
of California                    No Consideration.
Land & Legal Department          Assignee is wholly owned subsidiary of Assignor
P.O. Box 7147                    Robin ____ Title Insurance and Trust Company
San Francisco, CA 94120-7147     Per Chevron Resources

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

KNOW ALL MEN BY THESE PRESENTS: THAT CHEVRON U.S.A. INC., a California
Corporation (hereinafter called "Assignor"), for and in consideration of stock
representing 100% ownership in CHEVRON GEOTHERMAL COMPANY OF CALIFORNIA, a
Delaware Corporation, the receipt of which is hereby acknowledged, does hereby
sell, transfer, set over and assign unto CHEVRON GEOTHERMAL COMPANY OF
CALIFORNIA, (hereinafter called "Assignee") subject to the terms, covenants,
conditions and provisions hereinafter set forth all of Assignor's right, title
and interest in those certain agreements and permits as more particularly
described in Exhibit "A" attached hereto and those certain geothermal leases and
related instruments covering lands situated in Imperial County, California, as
more particularly described in Exhibit "B" attached hereto (said agreements and
permits and said geothermal leases and related instruments being hereinafter
collectively called the "Assigned Agreements"), together with all wells,
pipelines and related facilities or interests therein owned by Assignor,
situated on the lands included in said geothermal leases and related
instruments.

Assignee hereby accepts the aforesaid assignment by Assignor and assumes all of
those duties and obligations on the part of Assignor to be hereafter performed
under the Assigned Agreements. Assignee shall indemnify, hold harmless and
defend Assignor from and against any and all claims, damages, loss, liability
and obligation hereafter arising under the Assigned Agreements due to the
exercise by Assignee, its successors or assigns, of any rights thereunder, or
the default or failure to perform by Assignee, its successors or assigns, with
respect to any duty or obligation thereunder, including, without limitation, all
obligations as to the payment of rent, minimum annual advance royalties, earned
royalties, taxes and surface damages and every other obligation on the part of
the Assignor to be performed under the Assigned Agreements which arises on or
after the date hereof.

The terms, covenants, conditions, and provisions of this Assignment and
Assumption Agreement, together with the further obligations, liabilities,
conditions and restrictions as set



                                       -2-


                                                             BOOK 1483 PAGE 1172

forth in the Assigned Agreements, shall be binding upon and shall inure to the
benefit of Assignor and Assignee and their respective successors and assigns.

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment and
Assumption Agreement as of this 8th day of April, 1982.

                                        CHEVRON U.S.A. INC.


                                        By:             /s/ Illegible
                                            ------------------------------------
                                                       Vice President


                                        By:           /s/ M. M. Dryden
                                            ------------------------------------
                                                     Assistant Secretary


                                        CHEVRON GEOTHERMAL COMPANY OF CALIFORNIA


                                        By:           /s/ A. M. Cooper
                                            ------------------------------------
                                                       Vice President


                                        By:             /s/ Illegible
                                            ------------------------------------
                                                          Secretary

                                                [TITLE INSURANCE AND TRUST LOGO]
                                                A ______ COMPANY

O. 1945 CA (8.74)
(Corporation)

STATE OF CALIFORNIA     }
                        } SS.
COUNTY OF San Francisco }

On April 15, ____ before me, the undersiged, a Notary Public in and for said
State, personally appeared ___________________, known to me to be the Vice
President, and _________________, know to me to be ___________________ Secretary
of the corporation that executed the within Instrument, known to me to be the
persons who executed the within Instrument on behalf of the corporation therein
named, and acknowledged to me that such corporation executed the within
instrument pursuant to its by-laws or a resolution of its board of directors.

WITNESS my hand and official seal.

                                       ----------------------------------------
                                       [SEAL]      MARY LOUISE MAHONEY
                                                NOTARY PUBLIC CALIFORNIA
                                                     CITY & COUNTY OF
                                                      SAN FRANCISCO
                                           My Commission Expires _______________
                                       -----------------------------------------

State of California              )
City and County of San Francisco )ss

     On April 15th, 1982, before me, the undersigned, a Notary Public in and for
said City and County and State, residing therein, duly commissioned and sworn,
personally appeared M. M. ______, known to me to be Assistant Secretary of
Chevron U.S.A. Inc., the Corporation described in and that executed the within
instrument, and also known to me to be the person who executed it on behalf of
the said Corporation therein named, and acknowledged to me that such Corporation
executed the name.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official
Seal, in the City and County and State aforesaid the day and year in this
certificate above written.

----------------------------------
[SEAL]    OFFICIAL SEAL
        TAMARA C. SLOVER
      NOTARY PUBLIC-CALIFORNIA                /s/ Illegible
      ___________________________             ----------------------------------
      ___________________________             Notary Public in and for said City
----------------------------------            and County of San Francisco,
                                              State of California



_______________________________                              DOLORES PROVENCIO
_________________________                                     COUNTY RECORDER
_________________
P.O. ________                                               Dec 14 10 06 AM _79
SAN FRANCISCO, CA ____                                       BOOK 1444 PAGE 1279
                                                            OFFICIAL RECORDS
                                                          IMPERIAL COUNTY, CALIF

                           CONSENT AND RATIFICATION TO
                     UNIT AGREEMENT FOR THE DEVELOPMENT AND
                     OPERATION OF THE HEBER GEOTHERMAL UNIT,
                     COUNTY OF IMPERIAL, STATE OF CALIFORNIA

                                                                    Lease
                                                          FEE       CA Hibe
                                                          $5.00     _______ H.S.

     In consideration of the execution of that certain Unit Agreement for the
development and operation of the above Unit by CHEVRON U.S.A. INC., as Unit
Operator and working Interest owner, UNION OIL COMPANY OF CALIFORNIA, as working
interest owner and NEW ALBION RESOURCES COMPANY, as working interest owner, the
undersigned owners of lands, interests in land, royalties or other interests in
production from lands lying within the boundaries of the Unit Area described in
said Unit Agreement, do hereby severally, each to the extent of his particular
ownership or interest, consent to the commitment of their lands, interests or
royalties to said Unit Agreement and ratify the terms of said Unit Agreement as
applicable to such lands, interests and royalties. The undersigned do further
agree that the drilling and development requirements of all leases and other
agreements in which their several rights and interests are created or defined
shall be deemed fully performed by the conduct of operations under said Unit
Agreement on any part of the Unit Area or production of unitized substances from
any part of the Unit Area. Such operations or production shall be considered as
operations upon or production from each tract included therein and such
operations or production shall continue in full force and effect each lease and
other agreement covering such tracts and that payment for the proceeds of
unitized substances upon the basis of allocation to such tracts in accordance
with the respective tract participations, as provided in said Unit Agreement
shall constitute full performance of all such obligations to the undersigned
existing under such leases or other agreements.

     Executed the day and year hereinbelow set forth.

     Tract No.: 6l
     Date: 10-5-78


Witness: Roy M. Rains                        Owners: /s/ Norman E. Wallace
                                                     ---------------------------
                                                     Norman E. Wallace
Witness:
        ---------------------------
                                             Address: 2076 Emarald Street
                                                      San Diego, CA. 92109


Witness:                                     Owners: /s/ Norman E. Wallace
        ---------------------------                  ---------------------------
Witness:                                             Norman E. Wallace Trustee
        ---------------------------
                                             Address: 2076 Emarald Street
                                                      San Diego, CA. 92109

Witness:                                     Owners:
        ---------------------------                  ---------------------------
Witness:
        ---------------------------                  ---------------------------
                                             Address:
                                                     ---------------------------

                                                     ---------------------------

Witness:                                     Owners:
        ---------------------------                  ---------------------------
Witness:
        ---------------------------                  ---------------------------
                                             Address:
                                                     ---------------------------

                                                     ---------------------------

                                                               RES-4 (CD-8-78)
                                                               Printed in U.S.A.



(Individual)

STATE OF CALIFORNIA       )
COUNTY OF San Diego       ) SS.

On October 5, 1978, before me, the undersigned, a Notary Public in and for said
State, personally appeared N_rman E. Wallace known to me to be the person ______
whose name is subscribed to the within instrument and acknowleged that he
executed the same. in the capacity therein stated.

WITNESS my hand and official seal.

                                         ---------------------------------------
Signature /s/ Lori J. Vileta                            OFFICIAL SEAL
          -----------------------------                 LORI J. VILETA
              LORI J. VILETA                  [SEAL] NOTARY PUBLIC-CALIFORNIA
        Name (Typed or Printed)                      PRINCIPAL OFFICE IN
                                                       SAN DIEGO COUNTY
                                            My Commission Expires July 27, 1979
                                         ---------------------------------------
                                         (This area for official notarial seal.)

SF-423-4 (6/74)

                                                [TITLE INSURANCE AND TRUST LOGO]
                                                         A TICOR COMPANY

1950 CA (8.74)

(Witness - Individual)

STATE OF CALIFORNIA       )
COUNTY OF San Francisco   ) SS.

On October 31 1979, before me, the undersigned, a Notary Public, in and for said
State, personally appeared Ray M. _________, known to me to be the person whose
name is subscribed to the within Instrument, as a Witness thereto, who being by
me duly sworn, deposes and says: That he resides in Huntington Beach, Calif, and
that he was present and saw Norman E. Wallace, personally known to him to be the
same person described in and whose name _____ subscribed to the within and
annexed instrument execute the same; and he acknowledged to said affiant that he
executed the same; and that affiant subscribed his name thereto as a Witness to
said execution.

WITNESS my hand and official seal.

                                          --------------------------------------
Signature /s/ Mary Louise Mahoney                      MARY LOUISE MAHONEY
          -----------------------------     [SEAL]   NOTARY PUBLIC-CALIFORNIA
                                                         CITY & COUNTY OF
                                                           SAN FRANCISCO
                                           My Commission Expires August 17, 1981
                                          --------------------------------------
                                          (This area for official notarial seal)





                                                                     LEASE
          BLOCK                                                    RECORDING       WORKING
TRACT 1     1          OWNERS               DESCRIPTION            BOOK PAGE   INTEREST OWNER
-------   -----   ---------------   ----------------------------   ---------   --------------

61                Helen S. Fugate   Tact 144, T16S, R14E, S.B.M.   1193   42   Chevron
                                                                   1349 1147




                                 GENERAL RELEASE

     In consideration of the sum of $5,200 paid to the undersigned, the
undersigned hereby releases and forever discharges STANDARD OIL COMPANY OF
CALIFORNIA, its subsidiaries, including without limitation Chevron U.S.A. Inc.,
and affiliated companies (affiliated companies to include but not be limited to
Chevron Resources Company, a division of Chevron Industries, Inc. and Chevron
Geothermal Company of California), and its and their officers, employees,
agents, successors and assigns (all of which and whom are hereinafter
individually and collectively called "STANDARD") of and from any and all claims,
demands, actions or causes of action whatsoever of any kind or nature, known or
unknown, suspected or unsuspected, which the undersigned may have, or may
hereafter have, against STANDARD arising out of any matter or occurrence entered
into or happening as a result of; including particularly, but without limiting
the generality of the foregoing, any and all claims, demands, actions or causes
of action arising out of or in any way whatsoever directly or indirectly
connected with or caused by: the removal of approximately three and one half
acres of sugar beets for a construction site on or about the 23rd day of April,
1984, at a portion of the north one-half of Tract 44, Township 16 South, Range
14 East, SBM, Imperial County, California.

     This is a complete and final release and shall be binding upon the
undersigned and the heirs, executors, administrators, successors and assigns of
the undersigned and covers claims arising out of or connected with the
above-described occurrence or matter which the undersigned does not know or
suspect to exist in favor of the undersigned at the time of executing this
release which, if known by the undersigned, might have affected the settlement
covered by this release; and the undersigned hereby expressly waives any right
under or benefit of any law of any jurisdiction whatsoever providing to the
contrary.

     Neither the acceptance of this release nor any payment made hereunder shall
constitute any admission of any liability of STANDARD.

     DATED this 27 day of April, 1984.


                                                 /s/ Walter J. Holtz
                                                 -------------------------------
                                                 Walter J. Holtz

WITNESSES:

-------------------------------------

-------------------------------------

DG4-11



                                 GENERAL RELEASE

     In consideration of the sum of $1,200.00 paid to the undersigned, the
undersigned hereby releases and forever discharges STANDARD OIL COMPANY OF
CALIFORNIA, its subsidiaries, including without limitation Chevron U.S.A. Inc.,
and affiliated companies (affiliated companies to include but not be limited to
Chevron Resources Company, a division of Chevron Industries, Inc. and Chevron
Geothermal Company of California), and its and their officers, employees,
agents, successors and assigns (all of which and whom are hereinafter
individually and collectively called "STANDARD") of and from any and all claims,
demands, actions or causes of action whatsoever of any kind or nature, known or
unknown, suspected or unsuspected, which the undersigned may have, or may
hereafter have, against STANDARD arising out of any matter or occurrence entered
into or happening as a result of; including particularly, but without limiting
the generality of the foregoing, any and all claims, demands, actions or causes
of action arising out of or in any way whatsoever directly or indirectly
connected with or caused by: the removal of approximately one acre of sugar
beets for a pipeline right-of-way on or about the 12th day of December, 1983, at
a portion of the north one-half of Tract 44, Township 16 South, Range 14 East,
SBM, Imperial County, California.

     This is a complete and final release and shall be binding upon the
undersigned and the heirs, executors, administrators, successors and assigns of
the undersigned and covers claims arising out of or connected with the
above-described occurrence or matter which the undersigned does not know or
suspect to exist in favor of the undersigned at the time of executing this
release which, if known by the undersigned, might have affected the settlement
covered by this release; and the undersigned hereby expressly waives any right
under or benefit of any law of any jurisdiction whatsoever providing to the
contrary.

     Neither the acceptance of this release nor any payment made hereunder shall
constitute any admission of any liability of STANDARD.

     DATED this 14 day of Dec, 1983


                                                 /s/ Walter J. Holtz
                                                 -------------------------------
                                                 Walter J. Holtz

WITNESSES:


-------------------------------------

-------------------------------------

DG4-11



                         O'NEIL'S PARALEGAL CONSULTANTS
                                doing business as
                              PARALEGAL CONSULTANTS

                               5441 LIMERICK COURT
                           SAN DIEGO, CALIFORNIA 92117

MARGERIE ANNE O'NEIL                                   TELEPHONE: (858) 279-0501
NEIL UNDERWOOD                                        TELECOPIER: (858) 278-1028

LEGAL DOCUMENT ASST. REG. NO. 9                           REGISTERED AND BONDED

VIA FEDERAL EXPRESS

                                 January 9, 2003

Heber Field Company
947 Dogwood Rd.
Heber, CA 92249

Attention: Mr. Sergio Cabana
           Administrative Manager/Land Manager

     Re:  The Helen S. Fugate Testamentary Trust, established September 25,
          1975
          Superior Court of California County of San Diego Probate
          Case No. 182357

Dear Mr. Cabana:

     Pursuant to our recent telephone conversation, enclosed is a certified
copy of the Order Approving Second and Final Account and Report of
Successor Trustee and Petition for its Settlement; for Payment of Trustee's
Fees; and for Termination of Trust Authorizing the Trustee to Distribute
the Trust's Interest in Heber Field Company to the Beneficiary, Paul Marsh
Pitman, Jr., a.k.a. Marsh Pitman (Social Security Number ###-##-####).

     Mr. Pitman's address is:

     Paul Marsh Pitman, Jr.
     2832 E. Arden Lane
     Merced, CA 95340

     Mr. Pitman is represented by attorney Robert T. Haden, whose address,
telephone, and fax number are as follows:

     Robert T. Haden, Esq.
     Robert T. Haden Prof. Corp.
     2241 N Street
     Merced, CA 95340-3614
     Telephone: (209) 723-3247
     Fax: (209) 723-5288



Heber Field Company
January 9, 2003
Page 2

     Please sign the enclosed copy of this letter and return it to me as an
acknowledgement of your receipt of the letter and the enclosure and inform me of
any additional information that you need from me in order to effect the
transfer. Also, kindly notify me in writing when the transfer has been
completed.

     Thank you for your consideration in this matter.

                                                 Sincerely,


                                                 /s/ Margerie Anne O'Neil
                                                 -------------------------------
                                                 Margerie Anne O'Neil
                                                 Legal Assistant to
                                                 Bryan J. Holland, Esq,

cc: Ms. Rowan Sokolowski
    Robert T. Haden, Esq.

Enclosure

RECEIPT ACKNOWLEDGED:

HEBER FIELD COMPANY


By: /s/ Sergio Cabana                                             Date: 01/17/03
    -------------------------------
    Sergio Cabana
    Administrative Manager/Land Manager

We have all the infomration that we need in order to effect the transfer. The
transfer will be completed this month and payment for production month of
December will be made to Mr. Paul Marsh Pitman, Jr. by January 31, 2003.



                                 GENERAL RELEASE

                       (Do Not Sign Without Understanding)

     In consideration of the sum of $1,432.26 paid to the undersigned, the
undersigned* hereby releases and forever discharges STANDARD OIL COMPANY OF
CALIFORNIA, its subsidiaries, and affiliated companies, and its and their
officers, employees, agents, successors and assigns (all of which and whom are
hereinafter individually and collectively called "STANDARD")** of and from any
and all claims, demands, actions or causes of action whatsoever of any kind or
nature, known or unknown, suspected or unsuspected, which the undersigned may
have, or may hereafter have, against STANDARD arising out of any matter or
occurrence entered into or happening to the date hereof; including particularly,
but without limiting the generality of the foregoing, any and all claims,
demands, actions or causes of action arising out of or in any way whatsoever
directly or indirectly connected with or caused by:

pipeline construction between the Nowlin #1, Holtz #1 and Holtz #2 geothermal
wells

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

on or about the 1st day of September l973, at Tracts 40, 43 1/2 and 44, T-16-S,
R-l4-E, S.B.B.&M., Imperial County, California

     This is a complete and final release and shall be binding upon the
undersigned and the heirs, executors, administrators, successors and assigns of
the undersigned and covers claims arising out of or connected with the
above-described occurrence or matter which the undersigned does not know or
suspect to exist in favor of the undersigned at the time of executing this
release which, if known by the undersigned, might have affected the settlement
covered by this release; and the undersigned hereby expressly waives any right
under or benefit of any law of any jurisdiction whatsoever providing to the
contrary.

     Neither the acceptance of this release nor any payment made hereunder shall
constitute any admission of any liability of STANDARD, Magma Energy, Inc., or
New Albion Resources Co.

     DATED this 20th day of August, 1975.

**(and Magma Energy, Inc. and New
Albion Resources Co. as this release
applies to them as Lessees in Tract 4O
as described below)                      JACKSON FARMING COMPANY


                                         By /s/ Illegible
                                         ---------------------------------------


                                         /s/ HELEN S. FUGATE
                                         ---------------------------------------
WITNESSES:                               HELEN S. FUGATE as to said Tract 44


/s/ Illegible                            /s/ JOSEPH L. HOLTZ
--------------------------------         ---------------------------------------
                                         JOSEPH L. HOLTZ as to said Tract 43 1/2


                                         /s/ WALTER J. HOLTZ
--------------------------------         --------------------------------------
*Check to be made payable to JACKSON     WALTER J. HOLTZ as to said Tract 40
FARMING COMPANY H.S.F.____
                                                                GO-43 (CD-1.64)
                                                              PRINTED IN U.S.A.