Standard Steam Trust starting temperature gradient drilling program in Idaho

Alexander Richter 2 Jun 2009

Standard Steam Trust's, partly owned by U.S. Energy Corp. is starting a gradient drilling program at its project's site in Idaho.

Details on the development of Standard Steam Trust’s project in Idaho are given in a recent article in the U.S., where the company is starting a gradient drilling program.

According to the article, “Standard Steam Trust LLC (SST) has embarked on a 22-hole temperature gradient drilling (TGD) program at one of its geothermal prospects in an area of known geothermal potential in Idaho.

The program consists of drilling twenty-two 500 feet (152 m) holes and is scheduled to run through midsummer 2009.

The purpose of the TGD program is to define downhole temperature gradients across a broad spectrum of the lease hold. Data from the TGD program will be used to further identify resource potential and production test drilling targets. This process is a preliminary step in determining the commercial viability of the property.

Results from the first five temperature gradient drill holes have already been received and indicate an increase in water temperature of 5 Fahrenheit to 7 Fahrenheit degrees per 100 feet (30 m). These increases indicate that commercial water temperatures may be found between 3,500 feet to 5,000 feet (1,066 m to 1,524 m).

SST’s total current leasehold position is approximately 73,500 acres. This prospect area consists of approximately 7,900 of those acres. SST has targeted this area in Idaho due to its historical production of hot water from local water wells, previous deep hot water drill hole tests, access to transmission capacity and a leasehold that is comprised mostly of fee and leased state land.

If the TGD program continues to produce results similar to the first five wells, a production test drilling program consisting of three large diameter wells will follow, with the goal of generating sufficient data to support an industry standard reserve report detailing megawatt production potential for the property.

“Increasingly aggressive state and federal targets for renewable energy generation are resulting in a growing governmental commitment to geothermal energy development ranging from the opening of new permitting offices, a streamlined leasing application process and a $400 million allocation under the American Recovery and Reinvestment Act,” stated Keith Larsen, CEO of U.S. Energy Corp.

“Our temperature gradient drilling program in Idaho is a first substantial step in proving up a commercially viable geothermal resource. We plan to follow the Idaho program with another TGD program in Nevada in the third quarter. SST is aggressively advancing both its leasing and development activities and I am confident that this sector of our business will prove to enhance the value of our company,” added Larsen.

In December 2008, U.S. Energy announced it had acquired a 25 percent interest in Standard Steam Trust LLC, a private geothermal exploration and development company based in Denver, Colorado. At that time, SST had approximately 60,000 acres of Bureau of Land Management, state and fee leases in six prospect areas in three states. Since then, SST has acquired an additional 13,500 acres of new leases with geothermal potential.

SST’s overall goal is to have approximately 140,000 total net acres under lease by year end 2009.

U.S. Energy Corp. is a natural resources exploration and development company with interests in molybdenum, oil and gas, geothermal, and real estate assets.”

Source: Energy Current