[LETTERHEAD OF MAGMA POWER COMPANY]

NEWS RELEASE                                         CONTACT: Investor Relations
FOR IMMEDIATE RELEASE                                         
                                                              
                 MAGMA POWER COMPANY SIGNS FINAL AGREEMENTS ON 400 MW
                     GEOTHERMAL POWER PROJECT IN INDONESIA

          San Diego, California, December 2, 1994 ... Magma Power Company 
(NASDAQ NNM:MGMA) today announced that it has signed final agreements with 
Pertamina, the national oil company of Indonesia, and PT. PLN, Indonesia's 
national electricity company, to develop the Wayang Windu geothermal resource on
the island of Java, and to build, own and operate power plants to supply up to
400 MW of electricity to Indonesia.

          The initial development project will consist of up to 280 MW to be 
built by 1998, with the balance to follow. Magma Power will develop the 
geothermal resource and build, own and operate the power plants under a 30-year 
contract. Resource development is expected to begin in 1995.

          The agreements, consisting of a Joint Operation Contract with 
Pertamina and an Energy Sales Contract with Pertamina and PT. PLN, were signed 
in Jakarta in a ceremony with the Minister of Mines and Energy, Pertamina, and 
PT. PLN.

          Magma Power has formed a new company, to be named Mandala Magma 
Nusantara, B.V., to develop and own the Wayang Windu project. Participating in 
the project with Magma are two local Indonesian companies, P.T. Okha Hutomo 
Satrya and Figear Limited.

                                    (more)


Magma Power Company Signs Final Agreement on 400 MW Geothermal...Page 2


            Ralph W. Boeker, president and chief executive officer of Magma 
Power Company stated, "Wayang Windu is considered one of the most promising 
geothermal resources in the region and is strategically located to supply energy
to Jakarta and the rest of the growing Java market. This agreement extends Magma
Power's position as an established, competitive player in the international 
market for geothermal power. When combined with our two Philippine geothermal
power projects -- the 216 MW Malitbog project now under construction and the 72
MW Alto Peak project -- the Wayang Windu project brings to 688 MW our new,
international capacity under contract and in development. With these projects,
and with offices now open in both Manila and Jakarta, Magma Power is well
positioned to play an expanding role throughout the region as these countries
seek new generating capacity to meet their growing energy needs."

            Magma Power Company is a leader in the geothermal industry. The 
company currently operates seven geothermal plants in Southern California on 
geothermal leaseholds and fee interests held by the company and holds additional
geothermal leaseholds and fee interests in other parts of California and Nevada.
Magma is also currently developing additional geothermal projects in the 
Philippines and in Indonesia.


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