U.S. Geothermal starts well repairs of two production wells at Raft River

Raft River plant, Idaho, (source: Ormat)
Alexander Richter 17 May 2011

U.S. Geothermal signed a Repair Services Agreement for the repair of two production wells at Unit 1 of the Raft River project in Idaho, in the U.S. for a budget of up to $1.65 million.

In a release, “U.S. Geothermal Inc. (TSX: GTH)(NYSE Amex: HTM), announced the signing of a Repair Services Agreement (“RSA”) between its wholly owned subsidiary US Geothermal Services (“USG Services”) and Raft River Energy I LLC for the repair of two production wells at Unit 1 of the Raft River project.

The members of Raft River Energy I LLC have approved the RSA for the repair of production wells RRG-2 and RRG-7. Under the terms of the RSA, USG Services will fund and manage the repairs with a budget of up to $1.65 million. The cost of the repairs will be repaid from future project cash flow. A fee of 12.75 percent of the actual repair cost incurred will be paid to USG Services. The outstanding balance of the repair cost will also earn USG Services interest income at the rate of 12.0 percent per-annum.

Production well RRG-2 was shut down in June 2010 after a pump failure. Production well RRG-7 has a leak in a cement seal that failed where two steel casing sections overlap, allowing cooler geothermal fluid to enter the well bore. The flowing production temperature in RRG-7 has declined from 299 degrees F to 240 degrees F over the past two years. A pump rig was mobilized to the Raft River site on May 16 and began working on well RRG-2. Upon successful completion of the repair program, the annual average output of the plant is expected to increase 25% from a current level of 8 megawatts annual average to approximately 10 megawatts.

In addition to the well repairs, a flow stimulation technique called deflagration will be applied to wells RRG-2 and RRG-7 which may increase fluid flow from the known production zones. Deflagration has been used successfully in geothermal wells that contain productive zones that have been damaged by drilling mud or drill cuttings during drilling operations, with demonstrated increases in well permeability of up to 50 percent. Additional power generation may be realized from the well stimulation program.”

Source: Company release via Sys-Con