Raser said that Barbour Well is an experienced geothermal well drilling firm licensed to drill geothermal and domestic water wells in New Mexico.
The Lightning Dock is an undeveloped resource in the country. It is a shallow resource, with primary production expected from depths of less than 3,000ft and at temperatures between 285 and 310 degrees Fahrenheit.
Nick Goodman, CEO of Raser, said: “We are extremely anxious to get moving on our next geothermal project. The Lightning Dock resource has attracted attention from the geothermal industry since the 1970’s. It has been heavily studied with numerous temperature gradient holes and hot water wells.”
Raser has completed an internal review and report on the Lightning Dock project and has selected drilling locations and will begin operations by re-entering a well (TFD 55-7) that was drilled in 1984. That well was plugged and sat idle for decades awaiting development of the geothermal resource.
Surveys of this well have shown bottom hole temperatures of more than 320 degrees Fahrenheit. Raser plans to mobilize the Barbour #77 rig to Lightning Dock in early May to reopen and flow test well TFD 55-7. Drilling additional production and injection wells will follow the test.
Raser signed a co-development agreement with Evergreen Clean Energy in December of 2009 to provide financing for Raser’s drilling activities. Evergreen’s funding obligations with respect to each site selected for development are subject to several conditions, including satisfactory due diligence, the completion of certain milestones, the granting of a security interest, and the negotiation of definitive agreements relating to the financing of each project.
Evergreen is a newly formed clean-energy fund in the process of raising capital for its first investments in renewable energy projects. Therefore, the ability of Evergreen to perform its obligations and provide funding for one or more of our projects under the co-development agreement is dependent upon Evergreen’s ability to obtain sufficient capital commitments from investors.
Raser anticipates that after completing of the flow test of the well TFD 55-7, Raser and Evergreen will finalize negotiations for a potential funding commitment by Evergreen for the Lightning Dock project. If Raser is able to negotiate a funding commitment with Evergreen for the Lightning Dock project, Raser anticipates that Evergreen would reimburse Raser for its costs related to well TFD 55-7, pay Raser $5m for participation rights and pay for all future drilling for the Lightning Dock project.
When complete, the Lightning Dock project is expected to deliver 15MW of geothermal power to the Salt River Project Agricultural Improvement and Power District (SRP), an utility district of the state of Arizona serving the Phoenix area, under a 20 year power purchase agreement signed with SRP in 2008. The project is expected to deliver reliable baseload energy, with a capacity factor of 95% to SRP.
Raser owns and operates a geothermal power plant in southern Utah, which delivers renewable energy to Anaheim, California. Once completed, the Lightning Dock plant will become the company’s second geothermal project. Raser has several projects in different stages of development located in Utah, New Mexico, Nevada and Oregon.
