A. Cost Drivers

Geothermal drilling is expensive (in cost/depth) than on-shore oil and gas drilling for three principal reasons:

1. Technical challenge: the conditions described above mean that special tools and techniques are required for the harsh down hole conditions.

2. Large diameters: the produced fluid (hot water or steam) is of intrinsically low value, large flow rates and thus, large holes and casing, are required.

3. Uniqueness: geothermal wells, even in the same field

B. design: Design of a geothermal well is a “bottom-up” process.

C. Drilling: The need for directional drilling is usually dictated by geological targets (intersect as many fractures as possible) or lease boundaries,

D. Hazards: unplanned events during drilling, ranging from minor (lost circulation) to catastrophic (BHA stuck in the hole and the drill string twisted-off).

E. Rate of penetration (ROP): Many of the costs attributed to drilling are time-dependent (primarily related to the rental rate on the rig and service company expenses)

F. Bit and tool life: The abrasive nature of many geothermal reservoir formations accelerates the wear on down-hole tools.

Well Schematic

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