U.S. Geothermal drills second successful production well at Neal Hot Springs, Oregon

Alexander Richter 22 Oct 2009

U.S. Geothermal Inc. drills successfully second full size production well NHS-5, at the Neal Hot Springs project located in eastern Oregon.

In a release, “U.S. Geothermal Inc. (TSX: GTH), announced today that well NHS-5, the second full size production well at the Neal Hot Springs project located in eastern Oregon, was successfully completed on October 15.

NHS-5 encountered several lost circulation zones within the targeted horizon and intercepted a large aperture fracture at 2,796 feet resulting in a total loss of circulation. The well was completed to a depth of 2,896 feet. An initial 16 hour flow test completed using air lift produced fluid at a rate of 1,500 gallons per minute and resulted in a down hole flowing temperature of 286 degrees F (141 degrees C).

The reservoir-hosting fracture zone intersected in NHS-5 is 509 feet deeper in the geologic system than the large producing fracture intersected by NHS-1 which is located approximately 600 feet to the southeast. Both wells were instrumented with pressure and temperature equipment during the flow test. Geologic information and flow data from the drilling and flow test is being incorporated into the ongoing development of a reservoir model of the Neal Hot Springs geothermal system.

In addition to the drilling program for production-sized wells, the company has a temperature gradient (“TG”) drilling program underway utilizing a small diameter drill hole. Five TG holes ranging in depth from 500 to 900 feet have been completed, and are already providing valuable temperature gradient data for the overall area that hosts the Neal Hot Springs reservoir. Currently, another seven TG holes will be drilled with three of the holes expected to reach a depth of 1,500 feet in areas near the identified production zone.

Daniel Kunz, U.S. Geothermal’s President and CEO said, “This second production well encountered the same fluid temperature as our first production well and demonstrates a significant flow rate. We will now take the time to analyze the data being generated by the current temperature gradient drilling and the pending results of the updated reservoir model to determine the best location for a third production well and the necessary injection well locations.”

Source: Company release via Marketwire