News

Nevada Geothermal Power to continue drilling at Blue Mountain

Alexander Richter 1 Dec 2009

Nevada Geothermal Power receives US$ 57.9 million grant and will use proceeds to repay debt and drill additional wells for the Blue Mountain Faulkner I project in Nevada.

In a release, “Nevada Geothermal Power Inc. (TSX-V: NGP) announced today that it has received US$57.9 million Federal Grant on November 12, 2009 through its subsidiary, NGP Blue Mountain 1 LLC. The Grant relates to the successful completion of the Faulkner 1 geothermal plant (see news release dated October 19, 2009). Funds will be used to pay down TCW debt, to perform new drilling at Blue Mountain, and for general corporate purposes. (as reported on previously)

NGP has contracted Ensign Drilling to complete three wells, two deep injector wells and one production well, which are designed to increase the Faulkner 1 plant output from the current level of 27MW (net) to greater than 40MW (net). NGP believes that ultimately, Faulkner 1 plant output can be optimized at around 47MW (net).

The existing production well field is comprised of six wells, each capable of producing greater than 7.0MW (net of station load) individually or greater than 40MW together, however, in order to prevent drawdown of the reservoir, two existing shallow injection wells have to be replaced by two new deep injectors. The first new injector well (55-15), located along the known reservoir structure one quarter mile (1300 feet) north of existing deep injector well (57-15), was spudded on November 20, 2009. This well is currently drilling ahead at 3014 feet depth and will reach target depth by early January, 2010.

The plant has been operating continuously since being “placed-in-service” October 9, 2009. Commercial Operation was declared November 20, 2009, well ahead of the February 12, 2010 deadline required in the Power Purchase Agreement with NV Energy.

Power production from the field has been continuously increasing as the injectivity of the injection wells has been improving, resulting in higher fluid production rates. Fluid utilization efficiency for the plant has also increased with fine tuning of operational procedures. The reservoir pressure has been constant during production since shallow injection wells have been shut-in. Production temperatures for wells have remained constant or increased slightly through the course of production.

“We are very pleased with smooth performance of the Faulkner 1 plant and of the well field since discontinuing shallow injection,” said Brian Fairbank, President and Chief Executive Officer. “We are embarking on a make-up drilling project that will enable Faulkner 1 to be amongst the largest producing plants in Nevada. I want to thank NGP’s highly capable team and our industry partners for helping make this happen.”

Source: Company release via Yahoo