Magma Offices Will Close, Top 2 Executives to Leave : Takeover: Merger makes California Energy world’s largest producer of geothermal energy.

California Energy Co. completed its hard-fought takeover of San Diego-based Magma Power Co. Tuesday by announcing that Magma’s two top executives have resigned and a much-reduced headquarters staff will be moved to California Energy’s main offices in Omaha, Neb.

The $950-million merger makes California Energy the world’s largest producer of geothermal energy--electricity derived from the earth’s heat--with more than $400 million in projected annual revenue. California Energy relocated from San Francisco to Omaha in 1991, after 43% of the company was bought by Peter Kiewit Sons’ Inc., a big Nebraska-based construction firm.

As part of the merger agreement, Magma Chairman Paul M. Pankratz and Chief Executive Ralph W. Boeker have been replaced by David L. Sokol, chairman, president and chief executive of California Energy. Magma’s board has also been replaced by six nominees of California Energy--with the exception of Pankratz and Boeker, who will remain on the board subject to shareholder approval.

Magma’s San Diego offices will be closed by the end of April, though Magma’s California operating facilities--centered near Brawley, in the Imperial Valley--will remain unaffected, Dale R. Schuster, California Energy vice president of administration, said Tuesday.

Of the 35-person headquarters staff, about a third have been terminated and another third have been asked to stay on for a transition of up to 90 days.

“We have offered roughly a third of the people here in San Diego positions with us in Omaha, ranging from secretarial positions to professional and management positions,” Schuster said. Consolidating headquarters staff is necessary because “the two organizations are roughly mirror images of each other,” Schuster said. The merged companies at present have about 550 employees in all.

Terminated employees will be offered a six-months salary and health care package. Pankratz and Boeker will receive provisions of a golden parachute approved by the Magma board last fall.

Both companies, like other U.S. renewable-energy firms, have been pursuing contracts to build power plants overseas, particularly in Indonesia and the Philippines. California Energy can expect to save money by non-duplication of its efforts there as well.

California Energy executives “probably felt they had the better contacts anyway. . . . ,” said Jay G. Ferguson, an analyst with Ferguson, Andrews and Associates, in Charlottesville, Va. “They have gotten a lot of their projects finalized faster,” Ferguson noted.

“You could see real explosive growth in their production in the next five years,” Ferguson predicted of the merged firm.