PONTE VEDRA, Fla. — Earth observation imagery and services provider GeoEye expects its planned GeoEye-2 satellite to cost up to $800 million, or 60 percent more than the GeoEye-1 satellite now in orbit, but company officials said Aug. 10 that the newer craft, while offering virtually the same imaging clarity as its predecessor, will have better agility for faster reaction time.

Of this amount, the U.S. National Geospatial-Intelligence Agency (NGA) will be contributing some $337 million as part of a new, 10-year agreement called EnhancedView, which NGA announced Aug. 6 and which takes effect Sept. 1.

One-third of NGA’s investment in GeoEye-2 will arrive midway through the satellite’s construction, in 2012. The remaining funds will be delivered to GeoEye once GeoEye-2, which is being built by Lockheed Martin Space Systems of Sunnyvale, Calif., is operational in 2013.

In a conference call with investors, officials from Dulles, Va.-based GeoEye said GeoEye-2 will cost $750 million to $800 million including the satellite’s construction, launch, insurance and ground infrastructure. That is about 60 percent above the $478.3 million the company paid for GeoEye-1, which was ordered in 2004 and entered service in late 2008.

“Time goes on. Costs have increased,” GeoEye Chief Executive Matthew O’Connell said in explaining the price difference between the two satellites. “We’re going with the top of the line. You have to pay more for that kind of capability.”

GeoEye-2 will orbit at 652 kilometers in altitude, a slightly lower orbit than that of GeoEye-1 that will give GeoEye-2 a slightly sharper imaging resolution. GeoEye-1 is capable of detecting objects 41 centimeters in diameter in black-and-white mode. GeoEye-2 will have a 33-centimeter resolution.

O’Connell said the new satellite also will be equipped with control momentum gyroscopes that will enable it to maneuver more quickly than GeoEye-1.

The NGA’s Aug. 6 announcement that it was awarding GeoEye and its principal competitor, DigitalGlobe of Longmont, Colo., 10-year EnhancedView contracts valued at a combined $7.3 billion ended a long waiting period as both companies anticipated a decision by their biggest customer on how future orders would be structured.

GeoEye’s EnhancedView contract is valued at $3.8 billion. During the conference call, the company said the money breaks down as follows:

å A total of $2.8 billion will be for satellite imagery purchased through a service level agreement with NGA; an average of about $150 million per year of that amount will buy imagery from the company’s existing Ikonos and GeoEye-1 satellites under terms similar to the NextView contract that EnhancedView is supplanting. GeoEye expects to generate $184 million a year in EnhancedView revenue from GeoEye-2 once that satellite is operational in 2013. GeoEye-2 will thus contribute $1.29 billion in revenue over the seven years it is available during the EnhancedView contract period.

å Another $700 million is expected in NGA contracts for value-added products and services over the 10-year period.

å The final $336.9 million will be NGA’s contribution to the cost of building GeoEye-2.

Because GeoEye-1 is expected to be retired before the EnhancedView contract ends in 2020, GeoEye will be contracting for a GeoEye-3 satellite in 2013, with the satellite scheduled to enter service in 2017, GeoEye Chief Financial Officer Joseph F. Greeves said during the conference call.

The final contours of the EnhancedView contract are more favorable to GeoEye than the company had forecast. Under terms previously proposed by NGA, GeoEye would have been obliged to place with the agency a $280 million letter of credit corresponding to the amount of GeoEye-2 costs it wanted NGA to offset.

To secure the letter of credit, GeoEye was obliged to seek a new investor. In May, it struck a deal with Cerberus Capital Management of New York for the credit, with the understanding that if the NGA dropped the requirement, Cerberus would still be eligible to purchase $80 million in preferred GeoEye stock.

Greeves said the credit facility will be scrapped. In an Aug. 9 filing with the U.S. Securities and Exchange Commission (SEC), GeoEye said Cerberus would purchase $80 million in GeoEye preferred stock for $78 million, with the stock carrying a guaranteed 5 percent dividend. GeoEye may elect to pay the dividend in cash or stock.

GeoEye reported revenue of $81 million for the three months ending June 30, an 11 percent increase over the same period a year earlier. EBITDA, or earnings before interest, taxes, depreciation and amortization, was 52 percent of revenue, compared with 56 percent a year earlier. Net income was up 5 percent, to $10.1 million.

U.S. government agencies represented 77 percent of revenue for the three-month period.

Order backlog at June 30 stood at $232.6 million.

Peter B. de Selding was the Paris bureau chief for SpaceNews.