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MAGMA POWER REPURCHASES 2 MILLION SHARE OPTION FROM THE DOW CHEMICAL COMPANY

 SAN DIEGO, Oct. 13 /PRNewswire/ -- Magma Power Company (NASDAQ: MGMA) announced today that it has repurchased at a discount The Dow Chemical Company's option to purchase 2 million shares of Magma Common Stock. Magma repurchased the options for 857,143 shares of newly issued and unregistered shares of its stock.
 Under the Option Surrender Agreement, Dow has agreed not to sell the newly issued shares before Sept. 30, 1994. Also, the newly issued shares will not materially impact current-year earnings per share calculations since the option shares are already reflected in the number of shares used in calculating primary earnings per share.
 J.P. Morgan Securities Inc. was retained by an independent committee of the company's board of directors to assist in valuing the option.
 Following the transaction, The Dow Chemical Company will hold over 5 million shares of Magma Common Stock, approximately 4 million of which are currently held in escrow for exchangeable notes issued March 20, 1991.
 Paul M. Pankratz, chairman and chief executive officer of Magma Power, stated, "We're pleased we were able to reach this agreement with Dow so that our shareholders suffer less dilution in future years than they would have had Dow exercised its option for the full 2 million shares."
 Magma Power Co. operates seven geothermal power plants in Southern California on geothermal leasehold and fee interests held by the company and holds additional geothermal leasehold interests in other parts of California and Nevada.
 -0- 10/13/93
 /CONTACT: Magma Power investor relations, 619-622-7800/
 (MGMA)


CO: Magma Power Co.; The Dow Chemical Co. ST: California IN: OIL SU:

JL-LS -- SD005 -- 1471 10/13/93 08:01 EDT
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Publication:PR Newswire
Date:Oct 13, 1993
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