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DPG-LLC
DPG-LLC
East Brawley Geothermal Report Orita IBHX-001, Investor Summary
109 E 17th St., STE 4423Cheyenne, WY 82001Mailing: 1821 S Bascom Ave., STE 279
Campbell, CA 95008Phone: + 1 408.390.8877https://[email protected]
Until: 2019.07.31Created: 2019.01.25
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ContentsINTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Funding Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Project Description and Location. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PROJECT HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Additional significant permits and approvals are required to construct and operate a geothermal facility, including: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Accessibility, Climate, Local Resources, Infrastructure and Physiography . . . . . . . . . . . 8History of the Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Geological Setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EXPLORATION DRILLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9RESOURCE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Resource Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Planned Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Proposed Legal team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Energy and Infrastructure Practice: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
LEGAL REPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Our Services: Build Companies, Build Projects, and Arrange Financing . . . . . . . . . . . . . 12Our Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Geotechnical Services Provider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
GEOTECHNICAL SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13PROJECT RISK MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Project Construction Risk & Financial Performance Insurance . . . . . . . . . . . . . . . . . . . . 14PROJECT RISK MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15AON INSURANCE LETTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16PATENT FILING RECEIPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18ABOUT US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Who We Are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20What We Do? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
OUR TEAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21GEOTHERMAL RISK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Location - Imperial Valley, California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Extensive Project Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Reduced Risk - Known Resource . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
RISK MITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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TASK/CAPITAL PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Brawley, California Prospect 28MWe Net, 30MWe Gross . . . . . . . . . . . . . . . . . . . . . . . . 24Consulting Agreement - Operational Development Tasks Schedule . . . . . . . . . . . . . . . 25Pre-Construction - Operational Development Tasks Schedule . . . . . . . . . . . . . . . . . . . . 27Construction - Operational Development Tasks Schedule . . . . . . . . . . . . . . . . . . . . . . . . 29Online Operations Bridge - Operational Development Tasks Schedule . . . . . . . . . . . . . 31
CAPITAL NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31CASE STUDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
East Brawley (Orita Project) Imperial Valley, California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Design / Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Turnkey Construction & Commissioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33PROJECT DETAILS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Preliminary Work Scope (Example For Discussion Purposes) . . . . . . . . . . . . . . . . . . . . . 34Contract Acceptance and Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Detailed Power Plant Design and Enginnering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Phase 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Phase 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Equipment Procurement and Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Project Completion, Commissioning and Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Operations and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Phase 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Phase 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
PROJECT LOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36The project location is depicted on the following satellite images of the Imperial Valley. 36
LAND MAPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37EXISTING PLANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
One of the most studied and productive geothermal resources in the world . . . . . . . . 38Proposed Power Plant Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
TURBODEN TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Dual Closed Loop Working Fluid Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Project Cost Savings from Previous Designs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Water Chemistry and IBHX Coating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Performance and Risk Management Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Drilling and Logging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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IBHX FUNCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Heat Exchanger Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Nomenclature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Greek Symbols . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43THERMODYNAMICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Geothermal ORC Power Plant Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Power Plant Modeling & Simulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
MODELING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45WELL ENGINEERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
IBHX Geothermal Well Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Best Practice Handbook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Temperature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
BEST PRACTICES GEOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Geology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Geochemistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Drilling practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Well design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
BEST PRACTICES WELL DESIGN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Casing depths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Casing diameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
BEST PRACTICES CASING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Casing materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Casing connections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Cementation of casings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
BEST PRACTICES DRILLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Perforated and slotted liner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Drilling rig and associated equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
BEST PRACTICES DRILLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Drilling fluids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Well control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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List of FiguresFigure 1 Schematic of Aon Risk Management and Risk Mitigation Process and Flowchart.
Strategy combines all contracts, insurance finance and warranties under one point of management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 2 Imperial County Geothermal Wells. . . . . . . . . . . . . . . . . . . . . . 38
Figure 3 Schematic of traditional geothermal power generation . . . . . . . . . . 41
Figure 4 Schematic of IBHX geothermal power generation . . . . . . . . . . . . . 41
Figure 5 Schematic of ORC Mathematical Model . . . . . . . . . . . . . . . . . . . 45
Figure 6 Downhole fluid conditions - BPD . . . . . . . . . . . . . . . . . . . . . . . 47
Figure 7 Casing strings and liner for a typical well. . . . . . . . . . . . . . . . . . . . . 49
BEST PRACTICES DRILLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Running the open-hole liner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53APPENDIX A RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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INTRODUCTION
East Brawley Geothermal Investment Imperial Valley, California, USA
This report follows up a recent trip to the Imperial Valley located in Imperial County, California. There are seven
Known Geothermal Resource Areas (KGRA’s) near the Salton Sea in Southern California. This report will focus on a
specific lease, the Emanuelli Orita Lease that is available in the East Brawley Geothermal Resource. We have had
direct telephone communication with the land owner and farmer that owns the surface and subsurface rights for
the 5 km2 existing lease. In addition, we have negotiated a purchase arrangement for the lease and, as of March 7,
2019, have accepted the offer to purchase the lease for development of the geothermal resource.
We were introduced to this landowner by a mutual friend that grew up in this area. They are long time personal
friends. This is important for several reasons. ..
• Generally, land owners in the area are critical of geothermal companies as the existing companies are not
good stewards of the land or the resource. Most of the existing power plants are unsightly and emit a lot
of steam. They are not polluting per Se but the emission of steam could be construed as pollution by those
unfamiliar with geothermal energy production.
• Our introduction gave us credibility and a warm reception. We were able to discuss not only the land
owned by our contact but also land owned by his friends and associates in the valley. If a land owner is not
impressed with you or your opportunity, they will not offer you access to their friends. This is very important in
this community.
• Our contact had a keen interest in our approach to geothermal power plant development. Our proposed use
of only 5 - 7 acres per well or 30MW power plant per well was viewed as a far better project opportunity than
the current operating power plants in the area. Our environmentally benign power plants would represent
good stewardship and our generous lease offer based on each operating production well was deemed as very
attractive.
This report will discuss our initial discovery regarding this lease both by our conversation with the landowner
and details obtained from the current lessor. Furthermore, we will suggest immediate funding needs to move
the project forward. We have a great deal of initial data regarding project development from the current lessor
in addition to past exploration performed by major oil companies. We must move quickly to obtain financing for
the lease as we were informed that there are other companies shopping the market and this is the only available
lease. We believe that we have an edge on the competition simply because of our technology and small footprint.
With the increased worldwide focus on geothermal energy as a baseload energy generation solution, many
companies are vying for position in the best resource areas. That means that the Imperial Valley is highly sought
after. There are many companies seeking land and subsurface rights. There are currently twenty-six operational,
approved or planned projects in various stages of development in the Imperial Valley. One might think that the
field is crowded but quite the contrary, the resources really are that good. This area presents undoubtedly the best opportunity to launch our IBHX.
It is imperative that we proceed quickly but cautiously. Initial seed capital is required to continue our momentum.
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INTRODUCTION
We are currently unable to fund further research that is needed as well as pay for professional services, geological,
legal and financial. We have exhausted the freely available resources to obtain the information we have gained so
far. At this point, we need to retain a legal team that specializes in geothermal regulatory and project permitting
in addition to the siting of geothermal power plants in California. Good news is that this lease already had a
permitted project and had obtained all environmental and interconnection reviews. Three idle wells exist on the
lease and we will utilize them for our projects.
These personnel and professional services resources are needed now to provide preliminary input into the design
and engineering resources that will be needed later in the development cycle.
Funding Requirements
We suggest an initial consulting arrangement not to exceed $750,000 to retain legal representation, fund the
research that is ongoing, cover travel expenses, set up an office in the project area, and define the JV structure, etc.
The $1MM equity raise would be used to acquire the lease, fund office operations for the first six months, renew
and/or reapply for all permits and begin well confirmation and geological resource studies. To fully fund the initial
project through to confirmation of the resource and underwriting of the Construction and Performance Insurance
program, we would require capital input of $5MM. Additional equity would be introduced as the project moves
into later phases as would the debt financing secured by the insurance contract.
Following is a description of the Orita Project provided by the previous lessor. This lessor discontinued the project
in 2012 due to financial difficulties and had intended to start up again at a later date. They were acquired and
the current owner prefers to dispose of the lease and obligations. (Italicized text represents information obtained from and written by others. We assume no responsibility for the accuracy of the information provided.)
Project Description and Location
“The Orita Project is a planned project to develop, construct and operate a geothermal electric generation facility, an
electric switchyard with transmission interconnection, a geothermal wellfield, and related auxiliary systems at a location
approximately 11 miles east of Brawley, California (the “Orita Project”). The Company estimates that the 3,125 acre
leasehold may support a commercial size geothermal resource potential based upon data in their extensive proprietary
database. The site is located within the East Brawley Known Geothermal Resource Area (“KGRA”).
The Company secured geothermal and surface leases at the Orita Project in 2009 (the “Orita Project Leases”). The Orita
Project Leases provide for an initial term of five years. If certain performance standards are met prior to the expiration
of the initial term, the term of the leases is extended for another five years. Once production of electricity begins, the
leases continue as long as electricity or other geothermal resources are being produced in commercial quantities.
Reasonable outage periods are allowed under the leases for maintenance, equipment replacements, and force majeure
events.
Annual rental payments are payable on each lease or have been prepaid. Royalties are payable on each geothermal
lease based upon gross revenue derived from the sale of electricity. Royalties are also payable based upon the gross
proceeds received by the Company from any sale of extractable minerals or from utilizing hot water, steam, or thermal
energy for purposes other than power generation. The pertinent royalty to be paid to the geothermal interest owners is
Four percent (4%) of the proceeds from the sale of electric power.
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PROJECT HISTORY
To the Company’s knowledge no environmental liabilities exist at the Orita Project site. Several significant permits have
been secured for the initial exploration phase of the project including:
• An Imperial County Conditional Use Permit providing for drilling of six wells;
• A California Environmental Quality Act Initial Study/Negative Declaration;
• An Imperial County Air Pollution Control District Authority to Construct;
• A California Regional Water Quality Control Board Waste Discharge Requirement; and
• California Division of Oil, Gas, and Geothermal Resources Permits to Conduct Well Operations.”
Additional significant permits and approvals are required to construct and operate a geothermal facility, including:• An Imperial County Conditional Use Permit providing for construction of remaining wells, pipelines, generation
facilities, and other associated structures;
• A California Environmental Quality Act Environmental Impact Report;
• An Imperial County Air Pollution Control District Authority to Construct;
• A California Regional Water Quality Control Board Waste Discharge Requirement;
• A California Division of Oil, Gas and Geothermal Resources Notice of Intent to Drill a Geothermal Well; and
• A California Division of Oil, Gas and Geothermal Resources Injection Project Permit.
Accessibility, Climate, Local Resources, Infrastructure and Physiography
The Orita Project is accessible from paved and unpaved state and county roads and is approximately 11 miles east of
Brawley, California. Brawley, the nearest population center, had a population of approximately 22,000 in the 2000
census. Rail, road, and sea transportation from the Los Angeles port is adequate for shipment of heavy equipment to the
project site. The local county graded and paved roads are adequate to support construction of the project.
The Company intends to rely upon excess water generated by operation of the Orita Project to generate some of the
water necessary for cooling. This water generated by operation of the Orita Project is a byproduct of the conversion
of geothermal steam into energy. Additional makeup water is expected to be purchased by appropriation from the IID.
Sufficient surface rights are present in the existing Orita Project leases to construct and operate one or more geothermal
generation facilities. The net power production from the Orita Project plant will be delivered by a short radial line and
interconnected to the IID 230 kV transmission line, which is along the East Highline Canal.
The topography of the Orita Project is characterized by flat terrain bisected by irrigation canals, drains, and other
irrigation structures. The ambient temperatures range from 61°F to 122°F (16°C to 50°C). The elevation of the proposed
site is 26 ft. (8 m) below sea level. The average annual precipitation is approximately 2.4 to 2.8 inches (6-7 centimeters)
per year. The predominant vegetation is farmed crops.
History of the Property
Concurrent with the KGRA designation in 1981, a total of eight deep exploration wells were drilled by Unocal, Occidental
and Phillips Petroleum in the area. These wells were completed at depths from 8,500 ft. to 13,600 ft. (2,590 m to 4,115
m) and all encountered high temperature geothermal resources with temperatures as high as 576°F (302°C). Testing of
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one well confirmed flow rates in excess of 500,000 lbs per hour at a well head pressure of 560 psig, demonstrating a
6 MW capacity from the seven inch diameter well. In addition, operators drilled shallow gradient and slim-hole wells
that confirm the extent of the thermal system, and borehole geophysics and mud logs are available to quantify and
characterize all sandstone units that may be potential production horizons.
Commercial diameter wells are expected to produce at levels of up to 12 MW or greater in this resource. The flow tests
demonstrate that a deep high salinity reservoir is present. The temperature profiles within the 14 mi2 (39 km2) area
tested by the existing deep drilling are similar and all demonstrate temperatures of 400°F (205°C ) at a depth of 7,000
ft. (2,134 m). The Orita Project property was leased from the owners of the surface and geothermal mineral interests.
There are no override interests on these Orita Project leases.
Geological Setting
The Imperial Valley is a favorable area for geothermal development with high temperature geothermal resources
identified in areas where the generated power can be relatively easily connected into the local grid. Imperial Valley
geothermal systems occur within the Salton Trough, an area that marks the transition between two major geologic
provinces. To the south, sea floor spreading characterizes the area that includes the Sea of Cortez in the Baja California
Province. To the north, the San Andreas Fault system dominates the structural setting. Either process can produce local
areas of extended crust that provide enhanced permeability for development of geothermal systems. The process of sea
floor spreading adds the element of magma intrusion as an enhanced heat source within the already high regional heat
flow of the thin crust within the Salton Trough. This later process is most evident within the Salton Sea geothermal
properties where the resulting geothermal resource exceeds 600°F. The total estimated capacity of the Greater Salton
Sea area in the Imperial Valley is over 22,000 MW.
The geology of the Salton Trough is dominated at drillable depths by Quaternary and Holocene deposits related
to Colorado River delta processes. These sediments represent a range of sedimentary environments including true
deltaic sediments, lacustrine units, eolean deposits and coarser clastics derived from uplifted units in mountain ranges
bounding the trough.
Exploration
The Company conducted a magnetotelluric survey, a seismic survey, and a gravity survey at and in the vicinity of the
Orita Project area. Results of these surveys are being utilized to support the Company’s plans to develop one or more
power plants at the Orita Project area.
Drilling
In April 2010, the Company commenced its drilling program starting with Orita No. 2 well, which was drilled targeting
the successful production zone encountered in the Emanuelli #1 well drilled in 1982. The Emanuelli #1 well produced
approximately 500,000 pounds per hour, which indicated commercial viability. Drilling on the Orita No. 2 well was
suspended at a depth of 9,267 ft. due to mechanical problems, and the well was lined with perforated casing, cleaned
and tested. A maximum temperature of 457˚F was measured in the well still cooled by drilling mud. A flow test
produced fluids that confirmed the desired low-salinity benign chemistry but only marginal permeability at this depth.
In July 2010 drilling commenced on the Orita No. 3 well. In September 2010, the well was completed to the targeted
EXPLORATION DRILLING
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RESOURCE ESTIMATES
depth and showed significant hydrothermal alteration and had intercepted a major fault controlled low-resistivity zone
with loss circulation. Bottom hole temperature of the well was in excess of 450˚F. The well was successfully cased to
9,198 ft., however, the perforated liner was damaged during installation and productivity testing could not be successfully
completed.
Following a number of mechanical drilling problems, consisting mainly of drilling tools and drill rig equipment failing,
both above and below ground, the Orita No. 2 well was re-drilled from the bottom of its casing string at an approximate
5,400 ft. depth to a total depth 12,959 ft. On December 21, 2010, the Company successfully flow tested the Orita No. 2
well. The well was flow tested with a sustained flow rate of approximately 500,000 pounds per hour at 155 psig.
In the January 2011, the Company commenced drilling of the Orita No. 4 well at the previously drilled and proven
Emanuelli #2 well location. The Orita No. 4 well was drilled to a depth of 14,325 ft. and initial flow testing shows fluid
entries at 10,100 ft. and 11,500 ft. with 555°F measured at 12,430 ft. under flowing conditions. A long-term flow test
was completed in late June 2011. The well exhibited erratic and surging flow behavior with an inability to achieve
completely stable conditions. The final flow was estimated to be around 3 MW at a flowing pressure of 120 psig, but was
inconsistent and unstable. The well test was terminated and the Company is assessing its viability as a commercial well.
The Company is assessing the feasibility of completing further analysis and evaluation of the Orita resource and project
development potential by Company personnel and independent parties including GeothermEx and SKM, including
structural geology and geophysical examination of the field results from the drilling experiences of the three Orita wells
drilled to date. The feasibility of completing brine chemistry analysis to aid in determining resource characteristics and
compatibility with power plant parameters will also be evaluated. In conjunction with these studies and their results, the
Company will determine whether completing the long term test of Orita 2 will be necessary in evaluating the resource
and the viability of further project development. The testing of Orita 2 would involve injection into Orita No. 4, which
may cause positive changes or improvements to the flow potential and behavior of Orita No. 4.
Resource Estimates
The Company estimates that the reservoir may have the potential to support as much as 300 MW within the current
leasehold of about 5 mi2 (14 km2). Additional leasing in the Orita Project area could increase the MW potential. This
estimate is based upon known geologic information from the wells that were drilled and geophysical information that
was gathered by UnoCal, Occidental, Phillips, and others. Additional information about the size and quality of the
reservoir will be available when the Company obtains additional information from its geophysics and drilling program.
Planned Operations
In 2009, the Company entered into a 20 year PPA for the Orita Project with SCE. The contract was for an initial facility
between 40 and 100 MW with two expansion options of equal capacity. In addition, to transmit power from the Orita
Project, the Company had a transmission reservation on the Path 42 line that consists of a thirty-five mile long, double
circuit 230kV transmission line segment between the IID Coachella Valley Substation and SCE Devers Substation.
On August 31, 2011, the Company terminated the PPA with the SCE because it was not able to meet the critical milestone
schedule as outlined in the PPA for development of the Orita Project. As a result of the termination of the Orita PPA, the
Company also assigned its rights associated with the Path 42 line to unrelated third parties. The Company plans to re-
evaluate the economics and feasibility and future resource development plan for the Orita Project once additional funds
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are available.
Proposed Legal team (Initial Engagement Letter Pending)
Due to the generally large scope of development on a project of this size and nature, retention of a top legal
team is essential. Through our research we came across a presentation by Andrew T. Braff, Esq., Attorney, Wilson
Sonsini Goodrich & Rosati, P.C. (WSGR) entitled: “Geothermal Leasing 101: Federal, State and Private Lands.” The
presentation includes some very important information and is a source of reference for this document.
As a leading law firm, though, they are not limited to one area of expertise. They can provide us with Energy and
Infrastructure law, services, leading IP and patent law services as well as tax/audit services. WSGR maintains
offices in Los Angeles, San Francisco and Palo Alto, in California, Washington DC, and New York on the East Coast
and Beijing and Shanghai in China.
Website: https://www.wsgr.com/WSGR/Display.aspx?SectionName=practice/energy-finance/index.htm
Energy and Infrastructure Practice:
When it comes to structuring and closing groundbreaking transactions in the new energy economy, Wilson Sonsini
Goodrich & Rosati has become the firm of choice for leading companies, investors, and lenders.
No other law firm combines more than 50 years of undisputed leadership in technology and business model innovation
with a sophisticated, experienced energy project development and finance practice. This combination makes us
exceptionally well suited to serve as a strategic advisor to innovative companies at all stages of development, and
enables us to provide top-tier legal counsel in everything from patents to project finance, and government affairs to tax
structures. Further, WSGR is often involved in first-of-their-kind projects, financings, and transactions—deals that are
fundamentally changing the ways people power their homes and factories, fuel their vehicles, and manufacture the next
generation of plastics and chemicals.
Our Integrated, Multidisciplinary Team
WSGR has a fully integrated team of attorneys with industry-relevant, practical experience that ranges from securing
venture financing and protecting intellectual property for clean energy start-ups to developing and financing large-scale
energy and infrastructure projects around the world. For each assignment, and depending on client needs, we assemble
the right personnel and expertise, offering our clients the advantages of working with a collaborative, coordinated team
that maintains a commercial-minded focus on the needs of project participants.
When we work with early-stage clean energy companies, our approach is guided by the firm’s 50-plus-year history
of helping innovative, disruptive companies grow. For project development and project finance clients, we take a
commercial-minded, practical approach focused on meeting the varied needs of project participants. For project
investors, banks, and other lenders, in addition to delivering substantial value through our energy market and
infrastructure finance expertise, our attorneys are known for their innovative and influential approach to deals, and for
completing several first-of-their-kind transactions. In fact, another quality that sets our attorneys apart is our long-
standing relationships with venture capitalists, private equity firms, and major financial institutions across the U.S. and
abroad, which allow us to serve as a conduit to—and advisor regarding—a wide variety of funding sources.
LEGAL REPRESENTATION
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LEGAL REPRESENTATION
Regardless of the type of client we’re representing, our aim is to create alignment between both concurring and
conflicting interests, and to help clear the way so deals get done. This point is best illustrated by the growing number of
venture financings, megawatts, purchase power agreements, and other closed transactions associated with WSGR.
Our Services: Build Companies, Build Projects, and Arrange Financing
When we describe our team as “multidisciplinary,” it means that in addition to each attorney’s energy sector expertise, we
bring together the skills and resources clients need to pursue and achieve desired results. More importantly, it means we
can assist clients across all project phases, from development and financing to expansion or renewal options.
• The comprehensive scope of our energy and infrastructure services can best be summarized in three points:
• Our corporate, start-up, and venture capital team builds companies.
• Our commercial and regulatory development team builds projects.
• Our asset and infrastructure team (consisting of attorneys with tax/tax equity, private equity/debt, structured
finance, and/or bankruptcy expertise) arranges financing for infrastructure projects, from energy storage facilities
and wind farms to roads and bridges.
Our Clients
WSGR’s sophisticated energy practice is anchored by experienced and creative attorneys who represent more than
400 clients across several industries, including innovative renewable and clean energy companies, established entities
developing and financing large-scale infrastructure projects, and large public and private companies involved in
significant energy initiatives. WSGR also represents leading venture capital firms, private equity firms, energy project
investors, and other lenders actively involved in commercializing energy innovations and project finance.
Within the expansive energy industry, WSGR represents renewable and clean energy producers, advanced fuels and
chemicals companies, traditional electric power generators, and other innovators operating in developing areas. For
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example, our energy industry clients operate in the following sectors:
Geotechnical Services Provider (Initial Engagement Discussed, Awaiting Scope)
Our choice for geotechnical services is perhaps the most knowledgeable team of geoscientists available in one
company. They are located in Richmond California and have been instrumental in the development in all KGRA’s in
the United States as well as globally. Their staff includes geologists, geophysicists, geochemists and hydrologists. A
subsidiary of Schlumberger, Geothermex is the undisputed leader in geothermal assessment, analysis, engineering
and consulting globally.
Website: www.geothermex.com
Qualifications
GeothermEx is a U.S. corporation, in business since 1973, specializing exclusively in providing consulting, operational
and training services in the exploration, development, assessment and valuation of geothermal energy. We are the largest
and longest-established such organization in the Western Hemisphere. The staff consists of specialists in geosciences
(geology, geochemistry, geophysics, hydrology), engineering (drilling, well testing, reservoir, production, power plant,
chemical), computer science and economic analysis. All technical staff members have advanced degrees and lengthy
geothermal experience (average 20 years), with several members having more than 25 years in the geothermal industry.
• GeothermEx’s clients include:
• petroleum, mining and independent power companies requiring assistance in exploration, drilling and field
development;
• electrical utilities requiring independent evaluation of geothermal projects;
• financial organizations requiring advice on loan, acquisition and grant programs;
• agencies of governments requiring advice on regulations, policy issues or resource inventory; and
• land owners, legal counselors, and engineering companies requiring specialized technical assistance.
GeothermEx has been associated with hundreds of projects in 53 countries. The company has been involved in the
development of all the producing geothermal fields in the United States, with a total installed power capacity of nearly
GEOTECHNICAL SERVICES
• Biofuels, biomass energy, and biochemicals
• Clean fossil fuels and carbon management
• Distribution microgrid
• Energy efficiency
• Energy storage and battery technologies
• Fuel cells, combined heat and power, and waste heat
recovery
• Geothermal power
• Green building and industrial technology
• Waste to energy
• Hydrokinetic, wave, and tidal energy
• Natural gas
• Pollution reduction and resource management
• Smart grid and advanced scheduling and trading
• Solar power
• Transmission
• Transportation, electric vehicles, and related
infrastructure
• Wind power
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PROJECT RISK MANAGEMENT
3,000 megawatts. GeothermEx has carried out detailed geothermal exploration, drilling, field development and/or
assessment projects for government agencies or private companies in more than 20 countries; for example: Argentina,
Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Indonesia, Iran, Italy, Japan, Macedonia, Mexico, New
Zealand, Nicaragua, Papua New Guinea, Peru, Philippines, Portugal (the Azores), and Taiwan. GeothermEx has also
carried out geothermal reconnaissance and evaluation projects for both U.S. and foreign governments and international
agencies (such as United Nations, World Bank and Interamerican Development Bank) in nearly 20 countries; for
example, Bolivia, Bulgaria, Djibouti, Ethiopia, Fiji, Hungary, India, Jordan, Kenya, Madagascar, Mozambique, Panama,
Samoa, St. Lucia, Thailand, Turkey, Uganda, Vietnam, and Yemen.
GeothermEx has also conducted technology transfer or training projects in many countries, including Bolivia, Brazil,
China, Costa Rica, Greece, Japan, Nicaragua, New Zealand and Philippines.
GeothermEx’s experience includes the development of both conventional geothermal resources and Enhanced
Geothermal Systems. GeothermEx’s specialties include:
• Design and implementation of exploration programs.
• Design and management of drilling projects.
• Design, execution and interpretation of well logging and testing.
• Conceptual modeling based on integration of geologic, geochemical, geophysical, drilling and well-test data.
• Reservoir engineering and numerical simulation of reservoirs.
• Wellbore simulation and well design.
• Optimization of resource use.
• Design of power plants and gathering systems.
• Economic evaluation, risk appraisal and project financing support.
• Monitoring and maintenance of producing fields.
• Project feasibility studies.
• Assistance in contract negotiations, legal proceedings and arbitrations.
• Assistance to government agencies in formulating regulations and policies related to geothermal energy.
GeothermEx has conducted due diligence and verified resource adequacy for financial institutions in nearly all
geothermal projects in the United States and abroad financed by bank loans or bonds. This has enabled the
development of more than 7,000 MW of geothermal power, the total financed to date exceeding US $11,000,000,000.
Project Construction Risk & Financial Performance Insurance
Aon Insurance is our choice for a risk management strategy designed to reduce or eliminate the risk associated
with geothermal exploration and exploitation. The program consists of insurance products, program management
consulting and financial guarantees that enforce contracts and assure project completion while guaranteeing the
financial performance during the first year of production.
Proving and validating the technology while it is still undergoing the U.S. patent review process and remains
proprietary, prompted the inventor to previously seek third party validation. The technology was presented to
Aon Insurance for their consideration in managing or outright mitigating the financial risk associated with the
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development of the first geothermal project in the Imperial Valley.
Aon Insurance provides Risk Management solutions for oil exploration, mining and other high cost, high risk
exploration ventures. Not surprisingly, they had an underwriting chemical engineer and Vice President at Aon,
Mr. Thomas McBeath, P. Eng., that reviewed the technology and understands it. He has worked with the inventor,
Dr. Ted Sumrall, to develop an insurance and risk mitigation program that incorporates risk management, project
management, contract management and insurance products into a total risk management and risk mitigation
service. The program encompasses 95% of the total financial risk of developing geothermal power plants using the
IBHX. This covers the drilling and exploration, the engineering and fabrication of the IBHX, the engineering and
construction of the power plant and incorporates all of the procurement and construction contracts under a single
source program manager so that, in the event a claim must be made, investors only have one company to deal
with. The program may also be used to collateralize debt financing for a complete coverage solution.
In addition to the project development and construction protection, a performance guarantee assures that the
proposed geothermal project will produce the estimated power output. Should it not, Aon protects investors
with payments of up to 95% of the proposed first year revenue while working to rectify the shortfall with the
PROJECT RISK MANAGEMENT
Figure 1: Schematic of Aon Risk Management and Risk Mitigation Process and Flowchart. Strategy combines all contracts, insurance finance and warranties under one point of management.
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AON INSURANCE LETTER
contracted vendors.
Below is a letter from Mr. McBeath of Aon Insurance which outlines the process and procedure and the coverage
that the insurance will provide. A letter has been requested that addresses the specific requirements for this project.
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AON INSURANCE LETTER
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PATENT FILING RECEIPT
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PATENT FILING RECEIPT
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ABOUT US
Having a strong international team helps us offer both efficient and cost effective geothermal solutions customized perfectly for our clients needs.
We are an international collaboration of professionals and
companies that provide high quality, cost effective solutions in
renewable energy project development, engineering, equipment
procurement and construction. We deliver premium renewable
energy solutions throughout the world.
We work with a wide range of valuable suppliers and
technologies in our endeavor to provide our clients with
quality, cost-effective solutions to their energy needs. We have
an experienced and dedicated team of energy professionals.
We are your best choice for a wide range of renewable energy
technology development, engineering and construction services.
Who We Are What We Do?
Our professionals have proven industry and technical experience
and use innovative system design and construction techniques
along with standard methodologies to provide innovative
energy solutions on time and under budget. We are committed
to delivering excellent services focused on quality of work, cost
control and time management.
We strive to improve the quality of our technology offerings
and by applying this, unleash the inherent underlying potential
of our system designs. Our vision is to provide first rate, high
quality power generation solutions to our clients. Meeting these
requirements allows us to exceed our client’s expectations while
we expand and propel our professional business growth.
We develop geothermal power plants utilizing an exclusive heat
recovery technology. In addition, as 50% joint owners of these
power plants, we perform all O&M for the life of the projects.
• Project Development / Project Management
• Conceptual Design / Systems Engineering
• Technology Specification / Technology Procurement
• Project Construction / Operations & Maintenance
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Thousands of candles
can be lit from a single candle,
and the life of the candle will not
be shortened. Happiness never
decreases by being shared.
OUR TEAM
DPG-LLC
IBHX
Investor ROI
Project Developer
Proprietary Tech
We have a clear understanding of geothermal project development requirements, and we have the knowledge, skills and experience to successfully complete the proposed project.
Drakon Power Group LLC (DPG-LLC) is a unique renewable energy development company. Our goal is to provide a versatile integrated project solution, specifically designed to guarantee the success of the Owner/Investor/Client from pre-construction design to O&M for the life of the power plant. We have built strong relationships with leading renewable technology manufactures and leverage them to provide our clients with the most cost and energy efficient renewable energy systems in the industry.
As a consultant, DPG-LLC brings a flexible and nearly endless list of available services focused on our client’s project needs. From simply providing our clients with Tier 1 rated renewable products, to design-build engineering and construction consulting with onsite support, we deliver quality. In addition, DPG-LLC has the relationships to provide various project financing programs
and options. This allows DPG-LLC to assist in bringing any size project to construction and
completion.
Seed Capital Requirements - We have multiple project development opportunities to pursue in
the Imperial Valley. We propose forming a Joint Venture and seeking equity and debt financing for
each project. DPG-LLC will retain a 50% interest in each JV. However, DPG-LLC first needs to raise
seed capital to continue the pursuit of the initial ground work and research for the acquisition
of surface land and subsurface mineral rights. Our Capital requirements are initially $1MM first
stage followed by up to $5MM in later stages.
Seed money will be used for legal, consulting and accounting professionals as well as minimal
staffing and salaries. Title searches are necessary to determine clear paths of ownership of
subsurface rights. We have a legitimate lease to acquire with previous project work having
been performed and permits issued. Upon acquisition, a confirmation drilling program should
be defined and executed. This is a necessary step to gain information needed to engineer our
production wells.
Consulting geologists and a well logging company should be
considered early on to assure proper analysis of existing data
and consult on proper land acquisitions. Civil engineering is
required to layout our well locations and pads. Finally, drilling
engineers and contractors will need to be interviewed and
hired. With appropriate funding in conjunction with favorable
well prospects, drill rig acquisition might also be a wise
choice.
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GEOTHERMAL RISK
Location - Imperial Valley, California Extensive Project Opportunities
Geothermal energy as a heat source for electricity generation
is a renewable energy with many advantages: It is base load energy, it is produced local to where it is consumed and it is environmentally friendly.
The Imperial Valley is known as one of the most productive
natural geothermal resources in the world. It is estimated that
as much as 20,000MWe of electricity could be generated in this
area alone. Of course transmission and other factors will limit
that, but still, the opportunity is enormous.
Typically, the bankability of a geothermal project is threatened
by the geological risk. The geological risk includes the risk of
not finding an adequate resource (short-term risk) and the risk
that the resource naturally declines over time (the long-term
risk). The Salton Sea and other resources in the Imperial Valley,
simply are, the very best resource for our IBHX thus the initial
short term risk for projects here has already declined while the
long term risk is greatly alleviated by the conservative use of the
geothermal heat that the IBHX extracts.
Existing wells in the area range in depth from tens of meters
to over 4000 meters. Typically, though, most wells in production
seem to be only 400 meters to 2000 meters. There is an
abundance of well temperature data that all indicate that the
temperature gradient is on the order of 9°C - 10°C per 100
meters.
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RISK MITIGATION
Imperial Irrigation District commissioned a geological report
(Available as separate Addendum) that analyzed the probability
of great geothermal resources in their territory. The following
map depicts the findings. Higher numbers in the grid represent
higher probability and thus, less risk while lower numbers
represent lower probability and higher risk. The Imperial Valley
represents perhaps the best possible resource to prove the IBHX
technology.
Risk will be further reduced by the retention of Geothermex for
our geothermal consulting geologists and engineers. The wealth
of knowledge and best practices they have in the Imperial Valley
is second to none.
Data found during our research and included in this report
was obtained in part from documents that Geothermex has
contributed to. They are intimately familiar with the Orita project
as they had involvement with the previous developer.
WSGR has provided legal services for many of the geothermal
operators in the Imperial Valley as well as the utilities and the
government agencies.
Our strategy is to retain highly knowledgable contractors that
have experience working in this KGRA to minimize development
risk and maximize our potential for success.
The KGRA where the project it located is indicated by the circle
on the grid to the left.
Upon request and under NDA, we can provide well drilling
reports, well logs, and geological assessment of the lease area.
All of this data serve to reduce risk as we have less exploring to
do and really only need to confirm the resource. Because three
wells exist on the lease, we can choose the best one to develop
first. The well can be reworked and drilled to a deeper depth if
necessary and our IBHX can be engineered for this well. Or, if
budget permits, we can drill a new well specifically engineered
to optimize the highest performance of the IBHX.
Following are our budget projections as well as our high-
level project plan. We propose the initial capital input be a
consulting arrangement while we work on initial tasks to form
the JV structure and company. We would obtain office presence
in El Centro, California and commence project development
immediately upon receipt of funds.
Reduced Risk - Known Resource
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TASK/CAPITAL PLAN
Brawley, California Prospect 28MWe Net, 30MWe Gross
Start Up to Pre-Construction Capital
Operating Capital Budget $750,000
Projected Capital Cost $716,499
Contingency of Capital Budget $33,501
Total Duration - Consulting in to Pre-Con: 2 Months
East Brawley (Orita) Consultancy Agreement - Operational Funding Breakout
Start Up to Pre-Construction Tasks
Salary - (2) Energy Development/Construction Director $56,000
Legal Services- Lease/Struct./Contracts/Retainer $105,600
Lease Procurement + Pro Rata 6/mo Lease Payments $221,700
GeothermEx - Data Rev/Relog/New Report/Quote Well Eng $119,850
Brine Sample Collect/Chem Analysis/IBHX Coating Design $65,000
Vehicles/Fuel/Project Pre-Development Travel Expenses $85,360
Establish Fully Functional/Operational Office Presence $30,720
City/County Business License/Liability Insurance 1yr term $1,725
Lodging/Sub/Geo Ind. Member Fees/Research/Education $30,544
Consulting Argeement Projected Capital Cost Total $716,499
East Brawley (Orita) Consulting Argeement - Operational Development Tasks Breakout
Note: The Contingency of Budgeted Capital is money that will roll forward from one phase to the next as cost savings and/or value engineering savings are realized over the overall project duration of 30 months. Thus the balance of contingency budget funds will be returned or credited back to the funding source to reduce the total debt.
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TASK/CAPITAL PLAN
Consulting Agreement - Operational Development Tasks Schedule
Pre-Construction into Construction Capital
Operating Capital Budget $1,500,000
Projected Capital Cost $1,374,388
Contingency of Capital Budget $125,612
Total Duration - Pre-Construction into Construction: 4 Months
East Brawley (Orita) Pre-Con - Operational Funding Breakout
26East BrawleyGeo Report
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Pre-Construction into Construction Tasks
Salary - (2) Energy Dev/Const Dir./(1) Support Staff $124,800
Legal Services- Rev-Ex PPA-Interconn/Permitting/Retainer $217,480
Land Lease - Paid in Full/2019-2020 Payment Due August 9 $0
GeothermEx - Begin/Complete Well Bore Engineering $480,000
IBHX - Chemical Analysis-Coating Composite Testing $62,500
Turboden - Well Log Data/Heat Bal Mod/Meeting/Site Visits $34,240
Create Construction Set Engineered Drawings $270,000
Vehicles/Fuel/Project Pre-Development Travel Expenses $70,720
Operational Office Presence $35,560
City/County Business License/Liability Ins 1 yr term (Paid) $0
Lodging/Sub/Geo Ind. Member Fees/Research/Education $79,088
Pre-Con Projected Capital Cost Total $1,374,388
East Brawley (Orita) Pre-Construction - Operational Development Tasks Breakout
TASK/CAPITAL PLAN
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TASK/CAPITAL PLAN
Pre-Construction - Operational Development Tasks Schedule
Construction into Online Operations Capital
Operating Capital Budget $72,500,000
Projected Capital Cost $71,746,724
Contingency of Capital Budget $753,276
Total Duration - Construction into Online Operations: 22 months
East Brawley (Orita) Construction - Operational Funding Breakout
28East BrawleyGeo Report
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TASK/CAPITAL PLAN
Construction into Online Operations Tasks
Salary - (2) Energy Dev/Const Dir./(2) Support Staff $756,800
Legal Services- Const. Contracts/Permits/Retainer $1,033,010
Land Lease - Monthly Construction Phase Payment $88,000
Site Improve/Well Pad Prep $117,000
GeothermEx - Supervise Well Bore Drilling $5,000,002
IBHX Finalize Coating Material/Purchase 25% 65% 10% $22,953,000
Turboden- Meet/Final Approval/Purchase 25% 70% 5% $27,000,000
Gen Sub 6kV/115kV -Design/Engineer/Construct $1,400,040
Main Sub 115kV/230kV -Design/Engineer/Construct $4,400,060
Transmission Interconnect $550,080
Foundation -Design/Install $270,000
Generator Bld/Control Rm $400,008
Site Fence/Vid Sec/Int Srv $154,000
Construction Insurance $1,155,946
Construction All Trades $5,450,004
Construction Drawings As-Built Revisions $39,600
Vehicles/Fuel/Project Pre-Development Travel Expenses $335,940
Office Expenses $248,040
City/County Business License/Liability Ins 1yr term $4,210
Lodging/Sub/Geo Ind. Member Fees/Research/Education $390,984
Construction Projected Capital Cost Total $71,746,724
East Brawley (Orita) Construction - Operational Development Tasks Breakout
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Construction - Operational Development Tasks Schedule
TASK/CAPITAL PLAN
Online Operations Bridge Capital
Operating Capital Budget $4,500,000
Projected Capital Cost $4,135,912
Contingency of Capital Budget $364,088
Total Duration - Online Operations Bridge: 4 Months
East Brawley (Orita) Online Operations Bridge - Operational Funding Breakout
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Online Operations Bridge Tasks
Salary - (2) Energy Dev/Const Dir./(2) Support Staff $137,600
Legal Services- Const. Close Out/Op Permits/Retainer $92,120
Land Lease - Monthly Construction Phase Payment $4,000
Monthly Genernation Cost 50% Power Output $283,868
Monthly Generation Cost 100% Power Output $930,705
Debt Service - 4 Months $2,161,086
Performance Insurance $342,000
Vehicles/Fuel/Project Pre-Development Travel Expenses $65,080
Office Expenses $48,365
City/County Business License/Liability Ins 1yr term (Paid) $0
Lodging/Sub/Geo Ind. Member Fees/Research/Education $71,088
Online Bridge Capital Cost Total $4,135,912
East Brawley (Orita) Online Operations Bridge - Operational Development Tasks Breakout
TASK/CAPITAL PLAN
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Online Operations Bridge - Operational Development Tasks Schedule
Note: Phase 4 - The operational bridge fund is a contingency to ensure that operating capital exists to carry and cover the operational expenses of the generation facility and supportive systems during and through the end of phase 3 (online/operational state) to the first revenue payment for the generation produced. The balance of unused bridge funds will be returned to the funding source after the first full quarter of operation production generation payments are realized.
The money for the phase 4 bridge can originate from the rolling contingency fund from Start Up through Phase 3. Six months of bridge has been budgeted, but only 4 months of bridge funding might be consumed.
CAPITAL NOTES
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• Conceptual Design, Pre-Engineering On time & on budget
• Project Development and Equipment Procurement Early & on budget
• Construction and Commissioning On time & under budget
CASE STUDY
In order to develop a geothermal project that fulfills all the goals of the JV parties and investors, the project development and project management will take place in several distinct phases:
Our approach to geothermal power plant design and development will challenge your current thinking on what a geothermal plant
requires. From inception, our system requirements are fundamentally different. We only require a production well. No injection well(s)
is/are required. Our well temperature requirements are not as high as typical geothermal plants. Our equipment is skid mounted and
we use driven steel foundations wherever we can which eliminates concrete requirements lowers cost and speeds construction time
considerably.
Put simply, anywhere we can save cost, we do... without compromising quality. We care about developing the lowest cost energy
generation systems. Delivering the industry best IRR to our finance partners is our goal. Completing projects under budget and on
time is our passion.
East Brawley (Orita Project) Imperial Valley, California
We provide quality, professional geothermal power plant design and construction services that effectively lower our
cost of project development and delivers the lowest cost energy of all generation types.
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• Use Existing Wells for Testing / Precision Well Logging / Geophysical Studies / Well Engineering Phase 1
• JV Structure / Legal / Permitting / Studies / Project Design Pre-Engineering / Detailed Engineering Phase 1
• Production Well / Geology / Engineering, IBHX & Power Plant Consulting / Construction Engineering Phase 2
• IBHX Heat Exchanger Design, Engineering, Fabrication & Installation / Turbodin GenSet/Supportive Equip Phase 2
SERVICES
Design / Engineering
Turnkey Construction & Commissioning
This phase involves building the Power Plant and Deploying the IBHX in the well. The IBHX will require a drilling rig or equipment
capable of lowering the IBHX into the well on site to deploy the sections of the IBHX. The IBHX will be fully tested during this phase.
The Power Plant will be constructed and connected to the IBHX. The secondary fluid cooling system will be built. Post installation
and commissioning of the completed power plant, a series of performance tests will be completed. The plant will be documented
and a full set of As-Built drawings will be provided. Personnel will be trained. Finally, upon receipt of all government and regulatory
approvals, the plant wil be placed into service.
We design and engineer each power plant to achieve the maximum power output from each well. Each well will be engineered to
produce 30MWe gross electric power. In Phase 1 we will confirm the resource first by either re-logging existing wells or drilling
new confirmation wells. After well log analysis, we will engineer the production well to maximize total well efficiency. The IBHX
extracts thermal energy using a closed loop system of (HEX) working fluid. Finally, we have an option to design our generator cooling
infrastructure to utilize pre-cooling water if available and to produce fresh and pure condensate water for other use or sale if so
desired.
We recommend drilling new, deeper test / confirmation wells engineered to our specifications. We recommend Herrenecht Vertical
drilling equipment be used and have requested a quote for a drilling rig for deployment in the Imperial Valley. Acquisition of the
drilling rig should be considered. We will drill production wells to meet or exceed the proposed 30MWe power production estimate.
• Interconnection Study / Substation Engineer/Construct 115kV/230kV / Transmission Interconnect 230kV Phase 2
• Generator Substation 6kV/115kV / Steel Foundation Installation / Control Rm./Gen Shelter Building Phase 2
• Power Plant & Cooling System Construction / Phase 2
• Interconnection, Transmission , Substation, SCADA / Thermal Infrastructure Phase 3
• Commissioning and Testing of Turn Key Power Plant Phase 4
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1. Project Preliminary Design and Project Proposal – (pre contract acceptance)
a. Research available land and subsurface rights for land lease from select land owners in Imperial Valley
b. Provide the initial draft of this Technical and Commercial Report for seed capital and finance consideration
c. Upon proposal acceptance, prepare project structure and contracts:
i. Joint Venture Structure / Finance Agreements
ii. Supplier
iii. Sub Contractor
2. Geothermal Well Engineering – (post contract execution)
a. If Decided, drill a new test / confirmation well and log with HPHT logging probes. Otherwise re-log any existing wells
b. Analyze well report and well log results to determine true viability of proposed production well (Geothermex)
c. Conduct new site evaluation
d. Utilize new site evaluation to prepare proposal revisions for finance consideration and selection of provided updated options
PROJECT DETAILS
Preliminary Work Scope (Example For Discussion Purposes)
Contract Acceptance and Execution
Phase 1
Phase 2
Detailed Power Plant Design and Enginnering
3. Power Plant Engineering – a. Review and acceptance of proposal revisions
b. Upon acceptance and execution of proposal revisions, power plant project engineering will commence
c. Develop detailed project plan and timeline
d. Generate drawing sets for the project site based on proposal option(s) selections including but not limited to:
i. Civil
ii. Structural
iii. Mechanical
iv. Electrical
v. Plumbing
Phase 2
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4. Procurement –a. Contractor will procure all necessary and required equipment to provide a turnkey fully functioning project as specified
within the project contract
5. Construction –
a. Contractor will provide all necessary skilled trades and equipment to construct, assemble and install required components to
provide a completed project as specified within the project contract
6. Commissioning/Training –
a. Contractor will fully test and commission the functionality of the completed contracted project
b. Commissioning documentation will be provided for O&M and records
c. Contractor will provide training for O&M personnel concerning the Operations and Maintenance for all the above grade
equipment including monitoring systems
PROJECT DETAILS
Equipment Procurement and Construction
Project Completion, Commissioning and Acceptance
Phase 2
Phase 3
Operations and Maintenance Phase 4
7. Operations and Maintenance – a. Contractor will present a proposal concerning the proper Operations and Maintenance of the power plant
b. Operations and Maintenance Contract is a separate Contract to be signed between the Contractor and the JV after the turnkey
contract is signed
c. The IBHX heat exchanger is recommended to be maintained by the Contractor or the Contractor’s approved entity due to the
sensitive nature of the intellectual property and the patented proprietary anti-scaling coating
d. Quality Warranty period of the Contract is 2 years after the successful commissioning of the power plant
36East BrawleyGeo Report
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PROJECT LOCATION
The project location is depicted on the following satellite images of the Imperial Valley.
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LAND MAPS
38East BrawleyGeo Report
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EXISTING PLANTSExisting Imperial Valley Geothermal Power PlantsOne of the most studied and productive geothermal resources in the world
#*d !(d
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!(d
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¯Imperial County
Geothermal ProjectsSources: IC Assessors, IC Planning Dept., Aerial: NAIP 2010. created by IC Planning Dept., DN
Updated: March 12, 2013
HighwaysInterstate
State of Project
!(d Operational
#*d Approved
")d In Entitlement Process
Geothermal Projects
!(d Heber South
!(d Goulds II
!(d SIGC
!(d Del Ranch
!(d Gem 1
!(d Gem 2
!(d Goulds I
!(d Heber Geothermal Company
!(d Hudson Ranch I
!(d J.J. Elmore
!(d J.M. Leathers
!(d Ormesa 1E
!(d Ormesa 2
!(d Ormesa I
!(d Orni 18
!(d Unit 1
!(d Unit 2
!(d Unit 3
!(d Unit 4
!(d Unit 5
!(d Turbo
!(d Vulcan
#*d Hudson Ranch II
#*d Orni 19
#*d Black Rock Units 1,2 &3
")d Wister
#*d
!(d!(d
!(d
!(d
#*d
!(d
!(d
!(d
!(d
!(d !(d
!(d
Unit 2
Unit 4Vulcan
Unit 5
Unit 1 Unit 3
Del Ranch
J.J. Elmore
Turbo
J.M. Leathers
Hudson Ranch I
Hudson Ranch II
Black Rock Units 1,2 &3
ENGL
ISH
RD
LINDSEY RD
KALIN
RD
SINCLAIR RD
BRAN
DTRD
SEVE
RERD
GENT
RYRD
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IELD
RD
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RD BOYL
ERD
MC DONALD RD
POUND RD
GARS
TRD
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SRD
SCHRIMPF RD
COX
RD
CRUM
MER
RD
YOUNG RD
ALCOTT RD
HAZARD RD
KUNS RD
HOOBER RD
MERKLEY RD
HARTZ RD
WILKINSON RD
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TRD
SINCLAIR RD
GARS
TRD
YOUNG RD
HATF
IELD
RD
COX
RD
ALCOTT RD
!(d
!(d!(d
!(d
!(d
Goulds II
Heber South
Goulds I
SIGC
Heber Geothermal Company
WILLOUGHBY RD
PITZ
ERRD
FAWCETT RD
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RD
EADY
RD
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ERD
HEBE
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AVE
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Gem 2
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Ormesa 2
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ROAD8 04 1
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U.S. HWY 80
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NELSONS PIT RD
OGIER RD
RT 8 FREEWAY
RT 8 FWY
")dWister COUNTY RD 8F01
STATE HWY 111
GILLESPIE RD
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WES
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#*d
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Orni 19
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ANDRE RD
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Y11
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SHANK RD
BAUGHMAN RD
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WARD RD
SLID
ERRD
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BEST
RD
City of Calexico
City of El Centro
City of Calexico
City of Westmorland
City of Holtville
City of Brawley
City of Calipatria
0 5 102.5 Miles
Figure 2: Imperial County Geothermal Wells.
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TURBODEN TECHNOLOGY
Turboden ORC (Organic Rankine Cycle) turbine generators are
our current design choice for power generation. Our typical plant
configuration will use evaporative cooling towers to condense
the turbine working fluid and cool the turbo generators. As an
option, we can capture pure condensed water for bottling or bulk
transport to be used for other needs such as bottled drinking
water or for agriculture irrigation. This is a design consideration
that can be discussed as the project moves to the engineering
phase.
Turboden turbo generators are designed to generate electric
power efficiently from medium-to-low-enthalpy geothermal
sources of 100°C and 400°C (212°F and 752°F).
The Imperial Valley indicates temperatures at depths as shallow
as 450m of more than 300°C thus exceeding the minimum
heat required for the generators. Our target heat signature for
a 30MWe power plant is 290°C - 400°C. Clearly this area, as is
indicated by data on existing wells, sufficiently exceeds our
minimum requirements.
The power plant design employs a dual closed loop working
fluid system. The primary loop located in the IBHX extracts
heat from the earth and transports the heat to the Turboden
evaporator within the Turboden turbo generators. The working fluids are pumped and therefore down hole pressures and flow rates are not relevant to the design of the well.
Optimum heat flow and heat transfer will be attained via
optimization of the pumping flow rate to balance the heat
extraction within the IBHX and the exchange rate of the
secondary fluid. The performance of the turbo generators
will be settled at approximately 60% duty cycle so as not to
create unnecessary wear and tear on them and thus increase
O&M costs.
The chemistry of the working fluids is designed to work with
the temperatures that are present in the finished wells. The
IBHX and the working fluid circulating through the well will
deliver heat to the Turboden evaporator at a temperature
sufficient to drive the turbo generators. Excess heat will be
recycled by pumping it back down the well. The formation
does not need to reheat a cold fluid as is required by the hot
rock formation when the cooled water is injected back into
the formation in a conventional binary geothermal system.
This efficient use and reuse of heat drives the efficiency of the power plant.
Proposed Power Plant Design Dual Closed Loop Working Fluid Systems
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TECHNOLOGY
Project Cost Savings from Previous Designs
We reduce power plant complexity as well as cost through
the elimination of multipe production and injection wells. We
further reduce complexity and improve overall plant aesthetics
by eliminating the pipe runs between the many production wells
and the injection wells typically deployed in binary ORC plants.
Our power plant design is modular. We only require two and one
half (2.5) acres to accommodate a production well including the
turbo generator power plant. It follows then, that if injection
wells are unnecessary, steam fields are not needed as well. We
do not require the use of ground water or brine for the operation
of the plant. There is no need to pump the brine to the surface
and then inject it back into the resevoir.
Proposed Well Bore and IBHX Engineering
The proposed bore of the hole is recommended at sixteen (16”)
inches. We will likely spud in with a thirty (30”) inch bore for the
geologist recommended surface depth and run and cement a
twenty-six (26”) inch surface casing. We would follow the surface
casing with a twenty (20) inch anchor casing in a twenty-four
(24) inch hole. The remainder of the well will be drilled with
a twenty (20”) inch bore and will be left open hole for the
insertion of the sisteen (16) inch IBHX. Brine or water in the well
is an important conductive component and it’s exact chemistry
will be analyzed.
Water Chemistry and IBHX Coating
The chemistry of the water, brine or steam in the well is
important to the design and engineering of the IBHX. The IBHX
must be coated with a proprietary coating designed specifically
for the well fluid chemistry. The coating will counteract the
specific minerals in the brine and cause it to reduce the buildup
of those minerals and reduce significantly, scale deposits on the
IBHX. The benefits are:
• Maintain Optimum Heat Extraction Performance
• Increase IBHX Operating Efficiency
• Reduce O&M Cost and Maintenance Intervals
Performance and Risk Management Insurance
It is recommended that the project carry an insurance policy that
is underwritten to take into consideration the risks associated
with the development of geothermal projects. In addition,
the underwriters have a deep knowledge of the IBHX and it’s
operational capabilities. Thus, they are willing to write the
policy to cover the general liability but also to guarantee the
performance of the system. This financial risk mitigation is very
important to investors and the developer alike. The project
will perform as designed and to expectations or the investor
will be reimbursed. Of course, we have every expectation that
the proposed power plant will meet but more likely exceed
expectations so the insurance is a financial buffer to assure
the investors and other invested parties that the nascent IBHX
technology is sound and guaranteed. See Figure 1 opposite page.
“For the Project and subsequent Operations, Aon will provide a
comprehensive insurance program which will protect all assets, revenue,
and liabilities of the corporation. This will be synchronized with the
other components of the Risk Program, where risks have been addressed
contractually and through mitigation.”
Drilling and Logging
The production well will be engineered to accommodate a
sixteen (16) inch IBHX. This is a very large piece of equipment
and the precision of the well is extremely important for both the
initial insertion of the IBHX but also the extraction of the IBHX
for maintenance cycles that are estimated to occur every five (5)
years.
Our drilling partner utilizes semi-automatic hydraulic drilling
rigs that are capable of drilling to depths of five thousand
(5,000) meters. The quality of the well bores are exceptional. In
turn, the well report and well logs that are obtained from these
precision bores are accurate and precise.
The rigs are capable of drilling High Pressure, High Temperature
(HPHT) wells in active geothermal resource areas. Likewise, our
well log partner, Schlumberger / Geothermex has the tools and
the experience logging HPHT wells in all geothermal resource
areas worldwide.
Accurate temperature readings and brine chemistry are perhaps the most important engineering input to the design of the IBHX.
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Figure 1: Schematic of traditional geothermal power generation
of the heat used in the secondary heat exchanger. Existing well
temperatures in the area exceed 300°C at accessable depths.
This means the IBHX outlet temperature could reach 300°C or
more and that the IBHX working fluid would enter the Turboden
evaporator at a temperature in excess of 300°C. For a 30mw
gross power facility, the Turboden turbo generator would use
135°C or 44% of the heat from the IBHX to flash expand the
Turboden working fluid. Turboden’s efficient use of heat does
not require much thermal energy. The IBHX working fluid is
then returned directly to the well via the IBHX at a temperature
of 180°C. The geothermal formation only needs to reheat the
working fluid by 135°C or the delta of the energy used.
The IBHX captures heat the entire length of the heat producing
formation so raising the temperature from 180°C to 315°C is
quick and efficient. This conservative use of the available heat
and subsequent “recycling” of the remaining heat in the IBHX
working fluid yields 3x to 4x more thermal energy and is the
differentiating factor between the two types of system designs.
In contrast, the Enhanced Geothermal binary plant design
uses the natural fluid in the well. It is passed through a heat
exchanger on the surface and a working fluid is heated just as
with the IBHX. However, whether it is water, steam or brine, there
Following is a comparison of our IBHX heat extraction
technology with conventional binary geothermal which is
deployed extensively in the Salton Sea area.
A typical hydrothermal steam field design might recommend
drilling five or more production wells and three or four injection
wells. Our IBHX can achieve the same results with one well and
exceed expectations with two production wells and no injection
wells.
The IBHX is designed and engineered to the specific conditions
of each well. Regardless of well characteristics, the IBHX is a
heat exchanger. It operates using a closed-loop organic working
fluid. It’s only function is to extract heat from the formation
and transfer that heat to the turbo generator’s working fluid.
Similarly, in a nuclear power plant, the only purpose of the
nuclear reactor and reactor vessel is to heat a working fluid in a
closed loop. In both these cases, the super-heated working fluid
is then pumped through a secondary heat exchanger. In the case
of the IBHX, this occurs on the surface in the Evaporator of the
Turboden turbo generator. A small amount of heat (~25% - ~45%)
is exchanged in this stage. The hot working fluid still retaining
~55% to ~75% of the heat is returned to the well.
Following the laws of thermodynamics, the working fluid that
is returned to the well only needs to be reheated by the delta
IBHX Technology - Summary Discussion
Figure 2: Schematic of IBHX geothermal power generation
IBHX FUNCTION
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are inherent deficiencies and risks when using the natural fluid
in this way...
• Heat extraction is limited to where the formation is
producing
• Mineral content that is potentially harmful can build up
scale within the surface heat exchanger, increasing O&M
costs
• As scale builds up performance and efficiency decline
• Insufficient pressure and/or brine flow severely limit the
amount of energy that can be produced
• The heat carrying capacity of the water, steam or brine is
lower than that of a specialized organic working fluid
• Excess heat, ~60% to ~80% is injected far from the
borehole and is wasted. It has to reheat as it flows back to
the well
Specific details regarding the existing project, to the extent they
are currently unknown, will be added here.
IBHX Technology - Summary Discussion
IBHX FUNCTION
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Heat Exchanger DiscussionDue to the proprietary nature of the IBHX, we would like to
discuss the efficiency and effectiveness of heat exchangers in
general. In this Appendix A, we present formulas and potential
mathematical models that are presented in a research paper
entitled “Effectiveness-NTU Computation with a Mathematical
Model for Cross-Flow Heat Exchangers“ by H. A. Navarro and L.
C. Cabezas-Gómez and can be used to simulate the anticipated
performance of the IBHX. Clearly, assumptions must be made
such as the in-bore well temperature is constant and the fluid
used in the IBHX is a fluid capable of delivering the heat to the
ORC. This may not be a perfect example but it is very close.
Nomenclature
Area of heat exchange [ m2 ]
Capacity rate [ kJ/(sK) ]
Specific heat [ kJ/(kgK ]
Capacity rate of a minimum fluid [ kJ/(sK) ]
Capacity rate of a maximum fluid [ kJ/(sK) ]
Capacity rate ratio
EES Engineering Equation Solver
Subscript for gas
Enthalpy [ kJ/kg ]
Subscript for liquid
Mass flow [ kg/s ]
Number of Transfer Units
Number of Transfer Units
Opening ratio of a control valve [ % ]
Pressure [ bar-a ]
Heat transferred [ kW ]
Condenser heat transfer [ kWth, MWth ]
Entropy [ kJ/(kg•K) ]
Temperature [ °C, K ]
Overall heat transfer coefficient [ W/(m2•K) ]
Specific volume [ m3/kg ]
Volumetric flow [ l/s ]
Work per unit time [ kW ]
Electric power output [ kW ]
Isentropic power output [kW ]
Steam quality
Greek Symbols
Heat exchanger effectiveness
Efficiency
Base efficiency
Generator efficiency
Mechanical efficiency
Combined mechanical and generator efficiency
Isentropic efficiency
Definitions
Effectiveness, , is defined as the ratio of the actual heat
transfer rate for a heat exchanger to the maximum possible heat
transfer rate, namely,
In general, it is possible to express effectiveness as a function of
the number of transfer units, NTU; the heat capacity rate ratio,
C*; and the flow arrangement in the heat exchanger,
with the dimensionless number of transfer units (NTU) that is
used for heat exchanger analysis and is defined as
and the dimensionless heat capacity rate ratio
where / is equal to / or / , depending on
the relative magnitudes of the hot and cold fluid heat capacity
rates.
For further information, this paper is available upon request.
APPENDIX A
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Geothermal ORC Power Plant Cycle
This discussion is credited to Árni Jakob Ólafsson and is
extracted from his Masters of Mechanical Engineering
Thesis entitled “Verification of design models for geothermal
power plants”... Faculty of Industrial Engineering, Mechanical
Engineering and Computer Science School of Engineering and
Natural Sciences, University of Iceland, Reykjavik, August 2014
Geothermal power plant operation cycles follow the basic laws
of thermodynamics, mainly the conservation of energy. The
conservation of mass is also important when analyzing these
cycles.
The most important parameters when considering these working
cycles are the following fluid properties:
• Pressure, , is a design parameter with the unit Pa or bar.
Bar and bar-a are often used in the geothermal industry.
The absolute pressure in bar-a is used in these formulas
• Temperature, , is often a constraint in the form
of minimum temperature, maximum temperature or
temperature difference. The unit is °C or K. We primarily use
the unit °C
• Enthalpy, , describes the energy content of a unit mass of
flowing fluid. The unit is kJ/kg
• Entropy, , describes the disorder of a unit mass of fluid.
The unit is kJ/(kgK)
• Specific volume, , is the ratio of a fluids volume to
it’s mass. The unit is m3/kg. Specific volume is used to
determine flow speed of a fluid through pipelines from
mass flow and diameter.
In the operation cycle, the working fluid undergoes phase
changes. Generally, there will exist a liquid phase, a gas phase
and often a two phase mixture of liquid and gas at some point in
the cycle. The steam quality of the gas phase in the two phase
mixture is defined as:
where denotes mass flow and the subscripts and
denote the properties of liquid and gas respectively. Similarly,
steam wetness or water quality is the mass fraction of water in
the steam and equals .
The enthalpy, entropy and specific volume of the mixture are
described by:
When working with a single phase pure fluid, two fluid
properties must be known to calculate the rest. In the case of a
two phase pure fluid, two fluid properties must also be known,
but the steam quality can be one of them (Pálsson 2012).
In a geothermal power plant working cycle, different
thermodynamic processes occur in various components of the
plant. These processes are assumed to be ideal i.e., neglecting
losses. This provides a good estimation of what occurs in a given
component. The most notable processes used when analyzing
geothermal power plant working cycles are:
• Isenthalpic processes, where the enthalpy, , is considered
a constant over a given component.
• Isobaric processes, where the pressure, , is considered a
constant over a given component
• Isentropic processes, where the entropy, , is considered a
constant over a given component
• Heat transfer, where heat is transferred to or from the fluid
over a given component but no work is transferred
The mass flow into a component must be equal to the mass flow
out of the component, that is
A fluid with enthalpy , and mass flow , has an energy
content equal to and the first law of thermodynamics
states that energy that enters a component must be equal to
the energy exiting the component. Therefore where denotes
the work done per unit time by the fluid passing through the
component or work applied to the fluid and
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Figure 3: Schematic of ORC Mathematical Model
simulate these processes. This proposal contains data provided
by Turboden and their modeling of their ORC system using the
inlet and outlet temperatures we provided. We still need to
model and simulate the geothermal formation as well as the
IBHX within the formation. This work will be performed after
we drill a new test well and obtain more accurate well data and
geophysical studies specific to our needs.
Again, this is a sensitive area as the IBHX remains proprietary.
However, in general terms, we could model based on the
constant heat source of the formation from the AK-1D well
report (prior to drilling a new test well) and the given geology
and geophysics with a generic cross flow heat exchanger. This
would give a close approximation of the long term potential of
the IBHX performance and the geothermal heat source.
Below is a sample model of a generic ORC process. It’s input is
a constant temperature for modeling from generic heat sources.
Theoretically then, with a constant temperature delivered by the
IBHX, this model would simulate the power capacity of the ORC.
Likewise, a sufficiently close model of a heat exchanger with a
constant source of heat from the geothermal formation, would
simulate the delivery of the constant heat input to the ORC
model.
These studies are ongoing.
denotes the heat transferred from the fluid to the
surroundings or to the fluid from the surroundings .
Equations and
hold for all components in steady processes and can
consequently be used to determine unknown properties in the
analysis of the process in question (Pálsson 2012).
Thermal efficiency , of a process, is a measure of the process
quality and is defined as the ratio between the work output and
the heat flow into the process. That is:
Isentropic efficiency , measures a process quality compared
to the theoretical maximum performance of an ideal, reversible
process where no losses occur, or:
denotes the actual power output of the turbine and
and denote the turbines power output and outlet enthalpy
respectively, assuming the process ideal.
Power Plant Modeling & Simulation
The Organic Rankine Cycle (ORC) is modeled independent
of the heat source. This allows for heat input from different
sources such as boilers, heat recovery in industrial applications,
geothermal, etc to be modeled more accurately on their own.
The ORC can operate at low temperatures and is very efficient in
it’s use of available heat. The principal operates on the basis of
phase change in organic fluids.
Implementation of the Turboden ORC with our IBHX is based
on dual closed loop fluid systems. The Turboden ORC will use
the most effective thermal fluid for fast flashing to steam in the
expander while our IBHX will use the most effective fluid for
delivering the heat it recovers from the geothermal formation
into the turbo generator flash expander.
We are working on a series of mathematical models that will
MODELING
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IBHX Geothermal Well Engineering
This discussion is based on information obtained from the
“Report on Geothermal Drilling” by P Dumas (EGEC), M Antics
(GPC IP), P Ungemach (GPC IP) and published by GEOELEC,
http://www.geoelec.eu/. This report was funded in part by the
Intelligent Energy Europe Programme of the European Union.
This research was prepared for the European geothermal market
but there is good information that applies to other areas of the
world including their database of worldwide drilling companies.
In addition, they discuss well engineering, deep drilling and
present “best practices” for well engineering. This is what we
would like to expand upon regarding the IBHX.
The authors state in their Introduction that “Drilling represents
from 30% to 50% of the cost of a hydrothermal geothermal
electricity project and more than half of the total cost of
Enhanced Geothermal Systems (EGS). This Geoelec report aims
at presenting proposals to overcome this substantial financial
barrier. “
Our IBHX directly addresses these high drilling and development
costs by eliminating much of the engineering required to
develop a steam field to support hydrothermal geothermal and
EGS. While we don’t eliminate drilling, we do eliminate the need
to drill several production wells and injection wells for one
project. Our approach is one production well per turbo generator
system without the need for injection well. We maximize the
extraction of thermal energy while minimizing the complexity
and cost associated with many production wells.
They go on to say, “Research and Development (R&D) can
improve geothermal drilling technologies in order to reduce
its costs, but the main challenge today is to improve market
conditions for geothermal deep drilling.”
True, there are big advancements in drilling technology in the
oil and gas industry. We have chosen to align ourselves with
Herrenecht Vertical, a German manufacturer of fully hydraulic
and semi automatic deep drilling rigs. Our reasons are many.
Due to the precision of the drilling rig, the drilling operation
yields a very clean bore. This provides us with better log data
and allows us to make better decisions when we engineer the
IBHX for the well.
Since the IBHX is the critical component to the success of a
project, we believe it is very important to drill the highest quality
well for the IBHX. Not only will the IBHX perform better in a well
that is engineered for it but it will be much easier to maintain in
the future when it will be removed for inspection and cleaning
during normal O&M cycles.
The IBHX performance is directly related to its exposure in the
well. On wells we engineer and drill, we specify a 20” bore from
the surface to the bottom of the hole. This will generally require
a spud in of 30” and a surface casing to be set and cemented
to a depth specified by the geophysics of the location and local
code. Below the surface casing, we drill the 20” bore as open
hole so that the IBHX has direct exposure to the brine or fluids
in the well. The IBHX is not cemented in place but rather it is
suspended in the well. This allows us to remove it for O&M in
the future.
Best Practice Handbook
The formation and reservoir conditions that characterize
geothermal systems require the adoption of drilling practices
that differ from those utilized in conventional oil, gas, and water
well drilling operations. Temperature, Geology, and Geochemistry
are the principal areas of difference.
Here, we outline typical geothermal drilling conditions, and
the drilling practices that have been developed to optimize the
drilling processes in these conditions.
Introduction
Although heat from geothermal sources has been used by
mankind from the earliest days – for cooking and bathing, for
instance – its major development has taken place during the
past 30 years. This has occurred in parallel with the significant
advances made in deep drilling practices, and it’s importance
has risen dramatically during the last few years as the price
of petroleum has soared, and awareness of the importance of
‘renewable energy’ has developed.
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70° per kilometer. In anomalous regions, the local heat flux and
geothermal gradients may be significantly higher than these
average figures. Such anomalous zones are typically associated
with edges of the continental plates where weakness in the
earth’s crust allow magma to approach the surface, and are
associated with geologically recent volcanism and earthquakes.
It is in such settings that the majority of geothermal resources
are found and that the majority of geothermal wells have been
drilled.
While a few wells have been drilled into temperature conditions
that approach the critical point of water (374°C) and a number
of fields produce dry and superheated steam, the majority of
higher enthalpy resources are two phase – either vapor or water
dominated, with temperature and pressure conditions controlled
by the saturated steam / water relationship – ‘boiling point for
depth’. For design purposes, where downhole pressures and
temperatures are not known, ‘boiling point for depth’ (BPD)
conditions are assumed from ground level as indicated in Figure
4.
Saturated steam has a maximum enthalpy at 235°C and
consequently many geothermal fields are found to exist at
temperatures approximating this value (dissolved solids and
gases change this value somewhat). Such elevated formation
temperatures reduce drill bit and drilling jar performance and
often precludes the use of mud motors and directional MWD
instrumentation equipment; it adversely effects drilling fluid
and cementing slurry properties; and reduces the performance
of blow out prevention equipment. In addition it significantly
increases the potential for reservoir fluid flashing to steam
resulting in flowback or blowout from shallow depths.
The well, the downhole well components and the near well
formations are subject to large temperature changes both
during the drilling process and at the completion of drilling.
The circulation or injection of large volumes of drilling fluid
cools the well and the near well formation, but as soon as
fluid circulation is ceased, rapid re-heating occurs. These large
temperature differentials require special precautions to be
taken:
• to avoid entrapment of liquids between casing strings –
The equipment and techniques used in the drilling of
geothermal wells have many similarities with those used in
exploring and exploiting petroleum reservoirs. However, the
elevated temperatures encountered; the often highly fractured,
faulted, and permeable volcanic and sedimentary rocks which
must be drilled; and the geothermal fluids which may contain
varying concentrations of dissolved solids and gases have
required the introduction of specialized drilling practices and
techniques.
Temperature
The temperature of the earth’s crust increases gradually with
depth with a thermal gradient that usually ranges from 5° to
Figure 4: Downhole fluid conditions - BPD
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Particularly in the volcanic geothermal systems, many of the
shallow formations comprise low bulk density materials such
as ashes, tuffs and breccias, which as well as being permeable,
are often unconsolidated and friable, and exhibit a low fracture
gradient, and thus provide low resistance to blowouts.
Geochemistry
Geothermal fluids contain varying concentrations of dissolved
solids and gases. The dissolved solids and gases often provide
highly acidic and corrosive fluids and may induce scaling during
well operations. Dissolved gases are normally dominated by CO2
but can also contain significant quantities of H2S, both of which
can provide a high risk to personnel and induce failure in drilling
tools, casings and wellhead equipment.
The presence of these dissolved solids and gases in the
formation and reservoir fluids imposes specific design
constraints on casing materials, wellhead equipment and casing
cement slurry designs.
Drilling practices
In general, the drilling processes and equipment utilized to
drill deep geothermal wells are substantially similar to those
developed for petroleum and water well rotary drilling. However,
the downhole conditions experienced in geothermal systems, as
described above, require some significantly different practices to
be adopted. Some of these differences are outlined below.
Well design
The thermal efficiency of converting geothermal steam/water to
electricity is not particularly high (±20%), therefore large mass
flows and therefore volume flowrates are required, particularly
in vapor dominated systems. These large volume flowrate
requirements necessitate large diameter production casings and
liners. Typically a ‘standard’ sized well will utilize standard API 9
5/8” diameter casing as production casing and either 7” or 7 5/8”
diameter slotted liner in an 8½” diameter open hole section.
A “Large” diameter well will typically utilize standard API 133/8”
diameter casing as the production casing, with either 95/8” or
10¾” diameter slotted liner in a 12¼” diameter open hole.
which can exert extreme pressure when heated resulting in
collapsed casing.
• to ensure casing grade and weight, and connection type
is adequate for the extreme compressive forces caused by
thermal expansion.
• to ensure the casings are completely cemented such that
thermal stress are uniformly distributed.
• to ensure casing cement slurry is designed to allow for
adequate setting times and to prevent thermal degradation.
Geology
Geothermal fields occur in a wide variety of geological
environments and rock types. The hot water geothermal fields
about the Pacific basin are predominantly rhyolitic or andesitic
volcanism, whereas the widespread hydrothermal activity in
Iceland occurs in extensively fractured and predominantly
basaltic rocks. In contrast the Larderello steam fields in Italy are
in a region of metamorphic rocks, and the Geysers steamfield in
California is largely in fractured greywacke.
The one common denominator of all of these fields is the highly
permeable, fractured and faulted nature of the formations in
which the reservoirs reside. This high permeability is one of
the fundamental and requisite components for any geothermal
system to exist.
Typically, the permeable nature of the formations is not limited
to the geothermal reservoir structure alone, but occurs in much
of the shallower and overlying material as well. In addition,
a characteristic of most of these geothermal systems is that
the static reservoir fluid pressures are less than those exerted
by a column of cold water from the surface – the systems are
“under-pressured”. The high temperatures of the systems result
in reservoir fluid densities which are less than that of cold
water, and the majority of geothermal systems are located in
mountainous and elevated situations – resulting in static water
levels often hundreds of meters below the surface.
Drilling into and through these permeable and “under-pressured”
zones is characterized by frequent and most often total loss of
drilling fluid circulation.
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The depths of all cemented casing strings and liners is
determined such that the casings can safely contain all well
conditions resulting from surface operations and from the
characteristics of the formations and fluids encountered as
drilling proceeds.
Casing shoe depths are determined by analysis of data
from adjacent wells which will include rock characteristics,
temperatures, fluid types and compositions and pressures.
In particular fracture gradient data gathered from nearby wells.
At any time the depth of open hole below a particular casing
shoe should be limited to avoid exposure of the formations
immediately below the casing to pressures which could exceed
the fracture gradient at that depth and hence lead to a blowout.
It is usual to assume worst case scenario’s such as exposing the
previous casing shoe to the saturation steam pressure at the
total drilled depth of that section. Figure 3 illustrates how the
shoe depths may be chosen using a somewhat simplistic and
theoretical model with boiling point for depth fluid pressure
condition from a nominal water level at 200 m depth; and a
uniform formation fracture gradient from the surface to the total
depth of 2400 m.
This simplistic model suggests that the production casing shoe
would need to be set no shallower than 1100m; the anchor
casing shoe at approximately 550 m; an intermediate casing set
at 250 m depth; and a surface casing set at around 40 m depth.
It is likely that with real data that this casing program would be
somewhat simplified, the production and other casings shoes
somewhat shallower, and the intermediate casing eliminated.
Casing diameters
Casing diameters will be dictated by the desired open hole
production diameter – typically either 8½” or 12¼”. Slotted or
perforated liners run into these open hole sections should be
the largest diameter that will allow clear running – there is an
obvious advantage to utilize ‘extreme line’ casing connections
from a diameter point of view, however this is often offset by
reduced connection strength of this type of casing connection.
Casing internal diameters should not be less than 50 mm larger
Casing sizes utilized for the Anchor, Intermediate, Surface and
Conductor casings will be determined by geological and thermal
conditions.
Figure 5 illustrates schematically the casing strings and liner of
a typical geothermal well.
Casing depths
Figure 5: Casing strings and liner for a typical well.
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strength at least equivalent to that of the casing body.
It is usual that a square section thread form is chosen, and this is
typically the API Buttress threaded connection.
Cementation of casings
Unlike oil and gas wells, all of the casings down to the reservoir
are usually run back to the surface, and are fully cemented back
to the surface. The high thermal stresses imposed on the casings
demand uniform cementation over the full casing length, such
that the stress is distributed over the length of the casing as
uniformly as is possible and such that stress concentration is
avoided.
The objective of any casing cementing program is to ensure that
the total length of annulus (both casing to open hole annulus,
and casing to casing annulus) is completely filled with sound
cement that can withstand long term exposure to geothermal
fluids and temperatures.
Of course, as suggested above, the permeable and under-
pressured nature of the formations into which these casings are
being cemented means that circulating a high density cement
slurry with S.G.’s ranging from 1.7 to 1.9, inevitably result in loss
of circulation during the cementing procedure.
The traditional method of mitigating this problem was to
attempt to seal all permeability with cement plugs as drilling
proceeded, however, this is usually an extremely time consuming
process, and more often than not, circulation is still lost during
the casing cementing process.
Many approaches to overcome this problem have been tried, and
include:
• Low density cement slurry additives – pozzalan, perlite,
spherical hollow silicate balls
• Sodium silicate based sealing preflush
• Foamed cement
• Stage cementing
• Tie back casing strings – the casing is run and cemented in
two separate operations.
than the outside diameter of connection collars and accessories,
to allow satisfactory cementing.
A typical well design would include:
• Conductor: – 30” set at a depth of 24 meters, either driven
or drilled and set with a piling augur.
• Surface Casing: - 20” casing set in 26” diameter hole drilled
to 80 meters depth.
• Anchor Casing: - 13 3/8”casing set in a 17½” hole drilled to
270 meters depth.
• Production Casing: - 9 5/8” casing set in a 12¼” hole drilled
to 800 meters depth.
• Open Hole – 7” perforated liner set in 8½” hole drilled to
2400 m –Total Depth.
Casing materials
Steel casing selected from the petroleum industry standard API
Spec. 5CT or 5L.
In general the lowest tensile strength steel grades are utilized to
minimize the possibilities of failure by hydrogen embrittlement
or by sulphide stress corrosion. The preferred API steels are: Spec
5CT Grades H-40, J-55 and K-55, C-75 and L-80; Spec 5L grades A,
B and X42.
In cases where special conditions are encountered, such as
severely corrosive fluids, use of other specialized materials may
be warranted.
Casing connections
The compressive stress imposed on a casing strings undergoing
heating after well completion is extreme. As an example, an
800 meter length of casing undergoing heating from the
cement setup temperature of around 60°C to the final formation
temperature of 210°C ( a change of 150°C), would freely
expand 1.44 m. If uniformly constrained over the full length, the
compressive strength induced would be 360 MPa; the minimum
yield strength of Grade K-55 casing steel is 379 MPa. As this
illustrates, axial strength is critical and it is therefore important
that the casing connection exhibits a compressive (and tensile)
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sections, large diameter
• Blow Out Preventers (BOP’s) are required, however only
moderate pressure rated units are necessary – a typical set
of BOP stacks would include:
º 30” (or 29½”) 500/1000 psi annular diverter and
associated large diameter
º hydraulically controlled diversion valve.
º 21¼” 2000 psi BOP stack including blind and pipe ram
BOP’s and an annular BOP.
º 135/8” 3000 psi BOP stack including blind and pipe ram
BOP’s and an annular BOP.
º (comparatively – oil and gas rigs would usually have
5000 psi and 10000 psi rated BOP’s)
º For aerated drilling 21¼” and 135/8” rotating heads
and a 135/8” ‘Banjo box’ is required.
• The use of a ‘choke manifold’ is not mandatory in
geothermal operations; usually an inner and outer choke
valve is sufficient.
• As the BOP stacks are relatively large and occupy a
significant height above the ground level (in particular
if aerated drilling is to be used) it is necessary that rigs
are equipped with an ‘extra’ height sub structure – a clear
height of at least 6 meters is necessary.
• All of the elastomeric parts of the BOP’s must be high
temperature rated.
• It is preferable, although not mandatory, that rigs are fitted
with top drive units – allowing for drilling with a double or
triple stand of drill pipe; for easy connection and circulation
while tripping the drill string in or out of the hole; and for
back reaming.
• Rig mud pumps – (usually tri-plex) must be capable of
pumping 2000 to 3000 lpm on a continuous basis. Pressure
rating is not as important as pumped volume; pumps must
be fitted with large diameter liners (usually 7” diameter).
• Rig mud pumps must be piped to the rig such that fluid can
Many of these options were tried but generally none have
proven totally successful nor economic.
To date, in the experience of the author, the most successful
procedure has been to utilize the most simple high density
cement slurry blend, and to concentrate on the techniques of 22
placing the cement such that a full return to the surface without
fluid inclusions can be achieved. This nearly always involves a
primary cement job carried out through the casing, and in the
event of a poor or no return and immediate annulus flushing
procedure, which is then followed by an initial backfill cement
job through the casing to casing annulus, with sometimes
repeated top-up cement jobs. Particular care must be taken
to avoid entrapment of any water within the casing to casing
annulus.
Perforated and slotted liner
Unlike the cemented casings discussed above, it is usual to
run a liner within the production section of the well. This liner
is usually perforated or slotted, typically, with the perforation
or slots making up around 6% of the pipe surface area. As it is
extremely difficult to determine exactly where the permeable
zones within the production section lie, it is usual that the entire
liner is made up of perforated pipe.
The liner is not cemented, but either hung from within the
previous cemented production casing, or simply sat upon the
bottom of the hole with the top of the liner some 20 to 40
meters inside the cemented production casing shoe, leaving the
top of the liner free to move with expansion and contraction.
Drilling rig and associated equipment
The drilling rig and associated equipment are typically the same
as is utilized for oil and gas well drilling, however a few special
provision are required.
Because of the large diameter holes and casings utilized in the
surface and intermediate (if used) casing strings, it is important
that the rotary table is as large as practicable – typically a 27½”
diameter rotary table is utilized, and even 37½” is sometimes
seen.
• Again, due to the large hole diameters drilled in the upper
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The upper sections of a well are usually drilled with simple
water based bentonite mud treated with caustic soda to
maintain pH. As drilling proceeds and temperatures increase, the
viscosity of the mud is controlled with the addition of simple
dispersants. If permeability is encountered above the production
casing shoe depth, attempts will be made to seal these losses
with ‘Loss of Circulation Materials’ (LCM), and cement plugs. If
the losses cannot be controlled easily, then the drilling fluid is
switched to either water ‘blind’ – that is drilling with water with
no circulation back to the surface, or to aerated water.
Once the production casing shoe has been run and cemented,
and drilling into the production part of the well commences,
mud is no longer use as drilling fluid as it has the potential to
irreparably damage the permeability and thus the production
potential of the well.
Once permeability is encountered in the production section
of a geothermal well, drilling was traditionally continued with
water, ‘blind’ – with no return of the drilling fluid to the surface.
The drill cuttings are washed into the formation, and periodic
‘sweeps’ with either mud or polymer assists in keeping the hole
cleared of cuttings.
While this method alleviates the impractical and uneconomic
loss of large volumes of mud, and the associated mud damage
to the formation, the build up of cuttings within the hole often
results in stuck drill strings, and the washing of cuttings into the
formation causes damage to the permeability, although not on
the same scale as bentonite mud.
Aerated water is now more commonly utilized for drilling this
section of the well. To enable circulation of drilling fluids to
be continued despite the presence of permeability and ‘under
pressured’ reservoir conditions, the density of the drilling fluid
must be reduced. The addition air to the circulating water allows
a ‘balanced’ downhole pressure condition to be established, and
the return and circulation of the drilling water and cuttings back
to the surface.
Well control
Perhaps one of the most crucial differences between geothermal
and oil and gas drilling operations is the nature of the formation
be pumped to both the rig standpipe and to the kill line
(annulus) at the same time. It is important that the pump
sizes or quantity of pumps is such that sufficient fluid can
be pumped for drilling purposes, while a secondary volume
– say 1000 lpm can be simultaneously pumped to the kill
line.
• The drilling fluid circulating system requires a fluid cooling
unit – often a forced draft direct contact cooling tower, or
chilling unit.
• Drilling water supply must be capable of providing a
continuous supply of at least 2000 lpm and preferable 3000
lpm - backup pumps and often dual pipelines are utilized.
• Drill pipe should be lower tensile strength material to avoid
hydrogen embrittlement and sulphide stress corrosion
– usually API Grade E or G105. Drill pipe is now usually
supplied with a plastic internal lining, it is important that
this lining has a high temperature rating.
• A high temperature rated float valve, (non return valve), is
always fitted immediately above the drill bit in the drill
string to prevent backflow into the drill string which often
results in blocking of the drill bit jets.
• Drill bits – usually tri-cone drill bits are utilized however the
elastomeric parts of the bearing seals and the lubrication
chamber pressure compensation diaphragm are particularly
heat sensitive. It is important that while tripping the drill
string into the hole, that the bit is periodically cooled by
circulating through the drill string.
• PDC – polycrystalline diamond compact drill bits are
now being used more often - initially they were found
to be totally unsuitable for hard fractured rock drilling –
improvements in materials are now making this type of bit
a real option. With no moving parts, bearings and seals they
are essentially impervious to temperature.
• Drilling tools – the high downhole temperatures limit use
of mud motors and MWD instrumentation tools to the upper
cooler sections of the hole.
Drilling fluids
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quenched. Neither option a very satisfactory situation – it is
crucial that a full understanding of the behavior of the reservoir
and the necessary quench volumes that are required to maintain
the well in a fully controlled state.
The reliability of the water supply system for this process is of
paramount importance.
fluids and how they can be controlled.
A geothermal well has the potential of being filled with a
column of water at boiling point – even the slightest reduction
in pressure on that column can cause part of, or the entire
column to boil and flash to steam. This process can occur almost
instantaneously. The potential for ‘steam kick’ is always there and
requires special drilling crew training and attention.
While the likelihood of a well kicking at any time is real, the
method of controlling such a kick is simple and effective. Steam
is condensible, so by simply shutting in the BOP’s and pumping
cold water into the well – both down the drilling and down
the annulus, the well can be quickly controlled. The pressures
involved are not high, as they are controlled by the steam /
water saturation conditions.
During such a ‘steam kick’ it is normal that some volume of non-
condensible gas (predominantly CO2) will be evolved. After the
steam fraction has been quenched and cooled, it is usual that
this usually small volume of non-condensible gas be bled from
the well through the choke line. Some H2S gas may be present,
usually in small quantities, so precautions are required.
Running the open-hole liner
One of the final tasks in completing the drilling of a geothermal
well is the running and landing of the perforated or slotted liner.
At this stage the drilling operations have been 25 completed
and hopefully permeability and a productive resource has been
encountered.
This operation is potentially critical as while a string of
perforated or slotted liner (casing) is through the BOP stack,
the functionality of the BOP stack is disabled. It is critical that
a significant volume of quenching water is pumped to the well
prior to and throughout the entire process.
In the event that a kick occurs in this condition, there are only
two options available. A capped blank joint of pipe must be
readily available so that it may be screwed in and run into the
BOP stack so the well may be closed and then quenched. The
alternative is that the liner is released and dropped through
the BOP stack allowing it to then be closed and the well then
APPENDIX A RESEARCH
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East Brawley Geothermal Report