Energy Center, Merritt Road, Fort Bonifacio

1201 Taguig City, Philippines

Tel: +63 (2) 667-7332

Fax: +63 (2) 840-1575

August 15, 2011

JANET A. ENCARNACION

HEAD, Disclosures Department

The Philippine Stock Exchange, Inc. Philippine Stock Exchange Plaza

Ayala Triangle, Ayala Avenue, Makati City

Dear Ms. Encarnacion:

In compliance with the PSE’s disclosure requirements, we submit the attached press release

entitled “EDC declares Php2.3 billion net loss for 1st half of 2011.”

Thank you.

Energy Center, Merritt Road, Fort Bonifacio

1201 Taguig City, Philippines

Tel: +63 (2) 667-7332

Fax: +63 (2) 840-1575

EDC declares Php2.3 billion net loss for 1st half of 2011

Geothermal leader Energy Development Corporation (EDC) reported a net loss of Php2.3 billion for the first half of 2011 down from the Php5.63 billion net income posted for the same period last year. EDC President and COO Richard Tantoco explained that the net loss was largely due to the one time Php5 billion impairment charge for the Northern Negros Geothermal Power Plant (NNGP) in Negros Occidental and the PhP 900.0 Million reduction of steam revenues from Bacman.

In an earlier disclosure, Tantoco said that the impairment charge which is a non-cash loss resulted from the scaling down of the plant’s sustainable capacity to 5MW to 10MW from its previously rated capacity of 49.4MW. He emphasized that the impairment charge will not affect EDC’s ability to declare dividends considering that the company has over Php9 billion in unrestricted Retained Earnings. He also revealed that measures were being undertaken to right-size the plant.

Aside from the NNGP impairment charge, the decline in revenues of FG Hydro which operates the Pantabangan-Masiway hydroelectric plant and of the forgone Bacman steam revenues following the plant’s acquisition affected EDC’s income for the first semester. The hydroelectric plants’ lower dispatch for the period coupled with lower Wholesale Electricity Spot Market (WESM) prices have both led to the decline in revenue contribution from FG Hydro.

“We are headed towards the conversion of our NNGP plant into a cash accretive asset.

With the right-sizing initiative, we are putting a stop to the Php800 million yearly cash hemorrhage caused by the plant’s Sub-optimal operations. Some value on the steamfield will likewise be restored once the right sized replacement power plant is put in place,” Tantoco elaborated.

EDC’s recurring net income for the period decreased by 57.8 percent to Php2 billion from Php4.8 billion posted during the first half of 2010. This was mainly due to the decrease in revenues from FG Hydro’s electricity sales, absence of steam sales of Bacman and higher operating expenses mainly attributable to higher operations and maintenance expenses for steam field and power plant facilities in all areas where it operates.

Energy Center, Merritt Road, Fort Bonifacio

1201 Taguig City, Philippines

Tel: +63 (2) 667-7332

Fax: +63 (2) 840-1575

The company’s cash and cash equivalents, meanwhile, increased by 77 percent to

Php10.9 billion from the Php6.2 billion posted as of December 31, 2010.

“Our prudent fiscal management continues to boost our credibility to lending institutions and enabled us to fully settle our Yen loan which is now just down to less than 1 percent of our total debts, effectively shielding us from the risks accompanying the volatile Japanese currency,” Tantoco added. EDC settled the Php4.5 billion OECF 21st loan and prepaid the remaining Php228.9 million combined balance of OECF 9th and JBIC 19 th Yen loans.

EDC remains the largest producer of geothermal energy in the Philippines accounting for 62 percent of the total country installed geothermal capacity. Aside from geothermal, EDC also owns and operates the 132-MW Pantabangan-Masiway hydro electric plants and has investments in wind energy projects in Ilocos Norte and other provinces.