U.S. Geothermal says test results show Nevada project can be expanded

U.S. Geothermal Inc. (NYSE MKT: HTM) announced Jan. 11 that the estimate of the geothermal reservoir capacity associated with its San Emidio II project has increased from the earlier estimate of 10 net MW, to an estimated generation capacity of up to 47 net MW.

This increased capacity is in addition to the current 10 MW being produced by the existing San Emidio I plant.

In early 2016, five 1,000-foot temperature gradient wells were drilled in the Southwest Zone and later in the year, two of those wells were deepened. Both wells intersected a high permeability, high temperature geothermal reservoir. Data from flow tests that took place in late 2016 on the two deepened wells were incorporated into a Probabilistic Power Density model developed by Geothermal Science Inc., an independent geothermal reservoir engineering company.

Based on the flow rate and temperature produced by the two wells, and by measurement of pressure response across the wellfield, the model estimates that the area encompassed by the five wells drilled in 2016 (0.18 square miles) has a 90% probability of 18.8 net MW of generation capacity as the minimum. A larger area (1.4 square miles), defined by additional temperature gradient wells and geophysics, has a 50% probability of 47 net MW and was rated as the “Most Likely” outcome.

“This large increase in the size of the San Emidio II reservoir is an exceptional result from our development program,” said Dennis Gilles, Chief Executive Officer. “Having the ability to add a larger power plant to our San Emidio complex will help reduce capital and operating costs, and give us a very cost competitive project. Additionally, it will allow us to deploy two, or possibly three, of the previously acquired power plants whose acquisition we had announced in early 2016.”

The three remaining 1,000-foot-deep temperature gradient wells all have high temperature gradients and bottomhole temperatures indicating that an active geothermal resource exists below them. Permits to deepen these three remaining wells down into the production reservoir were received from the U.S. Bureau of Land Management and State of Nevada in late December of 2016. Subject to weather conditions, drilling to deepen those wells is planned for the first quarter of 2017. If the three wells intersect geothermal resource with similar permeability and temperature, the extent of the resource may be expanded and its power generation estimate increased. Additional permitting that will allow for more drilling to further expand the resource and to prepare for site development and construction activities is also underway.

U.S. Geothermal is currently operating geothermal power projects at: Neal Hot Springs, Oregon,;San Emidio, Nevada; and Raft River, Idaho. These facilities have a total power generation of approximately 45 MW. The company is also developing an additional 90 MW of projects at: the Geysers, California; a second phase project at San Emidio, Nevada; at Crescent Valley, Nevada; and the El Ceibillo project located near Guatemala City, Guatemala. U.S. Geothermal’s growth strategy is to reach 200 MW by 2021 through a combination of internal development and strategic acquisitions.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.