As of December 31, 2008, Sierra Geothermal Power had working capital of CAD4,039,809 compared to working capital of CAD10,676,587 as at December 31, 2007.

Highlights during 2008:

GeothermEx reported an increase in the reserve estimates for the Reese River project by 200%, up to 26 to 58 megawatt (MW) based on probability factors of 50% and 90%, respectively.

GeothermEx reported an increase in the reserve estimates for the Barren Hills project by 500%, up to 55 to 117 MW based on probability factors of 50% and 90%, respectively.

Received the Environmental Assessment approval with a Finding of No Significant Impact from the Bureau of Land Management for the Silver Peak Project, a key milestone in the project’s development.

Encouraging drill results were obtained in May 2008 from the Reese River project on three temperature gradient wells. Wells 88-5, 62-4 and 18-33 were drilled to depths of between 488 to 610 meters (1,600 to 2,000 feet). Bottom hole temperatures recorded were between 96 to 125 degrees C (194 to 257 degrees F).

Added strength to the Board of Directors, management and technical team.

Acquired 640 acres of land adjacent to the Silver Peak project and the 3,097 acre Pearl project to the east of Silver Peak, and entered into an option agreement to purchase a 50% interest in additional lands of 14,144 acres adjacent to the Pearl and Alum projects.

Received notice from Western Geothermal Partners, LLC that Sierra Geothermal Power has satisfied all requirements to earn a 100% interest in the Reese River project.

“I am pleased to report that although the past year has been very challenging, we have made good progress toward achieving our mission of building SGP into a leading independent producer of geothermal power,” said Gary R. Thompson, president and chief executive officer. “However, problems in the credit markets and the deteriorating global economic conditions increased the cost of obtaining capital and limited the availability of funds. As a result, we have and continue to be extremely prudent with our existing cash resources. We are conducting minimal exploration and advancing permitting work on our leading projects. In addition, we are working to position our company to take advantage of the US government’s expanded program of incentives for renewable energy projects”.