PUNA GEOTHERMAL VENTURE, HAWAII - 2005 DRILLING PROGRAM

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PUNA GEOTHERMAL VENTURE, HAWAII - 2005 DRILLING
PROGRAM

• Paul Spielman, Ormat, Inc.
• William Rickard, Geothermal Resource Group, Inc.
• William Teplow, Consulting Geologist

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2005 DRILLING PROGRAM

• 3 wells
• Production well redrill
• New production well
• New injection well.
• Innovative procedures
• Casing patch was used to repair parted casing
• Foam cement for intermediate casing
• Foam cement reverse circulated for production
  casing
• Mud motors to increase rate of penetration.
• Micronized cellulose LCM to protect permeability
• Hydrostatic bailer to swab cuttings back out

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• The Puna Geothermal Venture (PGV) is located on
  the eastern side of the Big Island of Hawaii, on
  the Lower East Rift Zone (LERZ) of Kilauea
  Volcano.

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• The PGV geothermal lease straddles the LERZ at a
  significant transform fault which laterally
  offsets the LERZ approximately 2000' in a
  left-lateral sense.

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PGV RESOURCE CHALANGES

• Shallow formation is unstable and highly
  permeable. Lost circulation below conductor can
  not be cured until the surface casing is set.
• Formation in intermediate intervals can not
  support a column of cement to surface.
• Hyaloclastite zones release large amounts of fill
  into the hole at greater depths.
• High productivity zones are wide open fissures
  the bit rotates through without taking weight,
  with total mud loss when penetrated, and can have
  high pressure steam over 600F.
• Production wells can produce with wellhead
  pressures and temperatures over 1000 psig and
  550F. Severe stress on the casing causes stage
  collars and tie-back joints to fail.
• The injection zones are low to moderate
  permeability fractures of small aperture, and are
  easily plugged by mud and cuttings.
• Project is located in a populated area with
  strict emissions restrictions, so air drilling is
  not practical and well flow to the atmosphere
  must be abated.
• Hawaii is a remote location, 2000 miles from the
  nearest continent. Drilling can be delayed weeks
  waiting for shipments from the mainland.
• Production fluid with pH 4½ is corrosive and
  lower grade casing does not last.

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SURFACE HOLE DRILLED BLIND

• Water pumped down the backside to lubricate the
  drill string and help wash the cuttings away into
  the formation.
• Surface casing cemented with no expectation of
  getting returns and top jobs are done with rock
  and ready mix until the cement reaches the
  surface.

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STUCK DRILLPIPE COMMON

• Several causes
• Loose rocks fall in around the drillpipe
• Hyaloclastite zones run and pack around the drill
  pipe.
• New loss zones pull cuttings back in from
  shallower loss zones and pack around the drill
  pipe.
• Procedures developed to avoid getting stuck
• Supervisors and crews implement procedures
  immediately when the string torqued up or a new
  loss zone was encountered.
• Top-drive essential for back reaming and pumping
  to keep from getting stuck in the unstable
  shallow hole.
• Geologists on site 24 hours a day when drilling
  in the production interval to provide advanced
  warning and quick implementation of procedures to
  maintain control of high pressure steam zones.

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FOAM CEMENT FOR INTERMEDIATE PRODUCTION CASING

• Foam cement has more toughness and is less likely
  to crack than conventional cement when exposed to
  thermal stress.
• Reverse circulation keeps pressure below fracture
  pressure because the frictional pressure of the
  fluid moving down the annulus subtracts from the
  hydrostatic pressure (In Conventional
  circulation the friction adds to hydrostatic
  pressure)
• Reverse foam cement jobs were complex , with 7
  steps and 14 valves to open and close between
  steps require thorough and detailed planning.

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HIGHER GRADE CASING

• Higher grade casing to resist thermal stress and
  corrosion.
• L-80M (modified) and T-95 grades
• 1 chrome provides corrosion resistance and
• 1/2 molybdenum reduces strength degradation at
  high temperatures.
• Premium Seal Lock connections maximize
  compressive strength of joints to resist failure
  at high temperatures.

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DRILLING MOTORS AND MWD

• Used for directional and straight hole drilling.
• MWD provides better control with less severe dog
  legs and saves time running single shots.
• Rotating while drilling with the motor increased
  rate of penetration up to 100.

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LOW PERM INJECTION ZONE PLUGS WITH CUTTINGS

• Micronized cellulose used to control lost
  circulation
• Maintained partial to full circulation
• No mud system clogging can be a problem with
  conventional lost circulation materials.
• Well was cleaned up after slotted liner installed
  
• Swab cups run below fluid level in 11-3/4 casing
  and stroked 90' to surge the mud and cuttings out
  of injection zones
• Hydrostatic bailer run in the hole empty and a
  valve opens when tool sets down on bottom causing
  the wellbore fluid to flow rapidly into the drill
  string.

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• KS-10 REDRILL
• Original hole abandoned by a cast iron bridge
  plug, sand, and cement to the shoe of the 7"
  cemented liner.
• Redrill kicked off using a 4-1/2" motor and
  retrievable steerable MWD.
• 6" hole directionally drilled through a drilling
  break and lost circulation
• Water pumped into the annulus until partial
  returns were regained.
• Drilling continued to total loss circulation
  where pump pressure dropped to zero
• Additional 45' of rotating with no weight on bit
  to final depth of 5210
• Parted casing was squeezed with cement and a 3/8
  thick casing patch was installed to protect the
  cement
• No seals or seal material on the casing patch to
  avoid trapping water that could collapse it.

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• KS-6
• New production well drilled near southwestern
  edge of the project.
• Rig-up delayed six days when cracks were
  discovered in the hook and new blocks had to be
  air freighted from Houston to Hawaii.
• On production in October 2005 producing 8.3 MW
  worth of steam.

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KS-6 26" surface hole

• Drilled to 1004' with a 9" mud motor and
  rotation.
• Total lost circulation began at 98'
• Drilling continued with water and gel sweeps.
• Water pumped into the annulus to lubricate the
  drill string and wash cuttings into the
  formation.
• Pipe struck at 720' when boulders fell in around
  the drill string and was worked free thanks to
  quick reaction by the drilling crew, good
  procedures, and use of the top drive to back
  ream.
• 22" butt weld casing run and cemented.
• Rock and ready mix cement placed in the annulus
  for the top job.

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KS-6 20" hole

• Drilled to 2059' with 9" straight hole mud
  motors.
• Threaded connection on the motor shaft failed so
  solid shaft motors were used for the rest of the
  drilling program.
• 16", 97 lb, L-80, SL Boss casing was run with an
  external casing packer at the shoe of the 20" to
  prevent gas migration up the annulus.
• Cemented with foamed cement and unfoamed tail
  cement.
• Returns were lost due to an operational error,
  while pumping the displacement so the 20" by 16"
  annulus was flushed with water.
• A top job with foamed cement and unfoamed
  accelerated cap cement was pumped.
• Then the ECP was inflated with cement pumped
  through a packer set in the casing before the top
  job cement set up.

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KS-6 14-3/4" hole

• Directionally drilled to 5071' with mud motor
  MWD.
• The 11-3/4", 65 lb, T-95, SL HC casing reverse
  foam cemented.
• Drillpipe run in the hole and stabbed into the
  float near the bottom of the casing.
• Mud circulated conventionally and in reverse to
  condition the hole.
• Lead foam cement reverse circulated down annulus
  with returns up the drillpipe.
• Unfoamed shoe cement was pumped down the
  drillpipe.
• Accelerated cap slurry pumped into the annulus
  with a final casing pressure of 120 psi.

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KS-6 10-5/8" hole

• Drilled directionally with mud motor MWD to
  6584' total depth.
• Water pumped into the annulus when returns were
  lost at 6510'.
• Drilling continued through 5 foot of drill break,
  10' with elevated torque and no weight on bit,
  another 5 foot drill break, 19' of firm rock, 13
  more of drill break, and 12' of firmer rock.
• Completed with 8-5/8", 44 lb, GT-80, SL Boss
  perforated liner.

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• KS-13
• New injection well drilled toward the
  northeastern portion of the project.
• On injection at 2000 gpm of 300F water at 200
  psig WHP.

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KS-13 26" surface hole

• Drilled to 1005 with 9" mud motor and rotation.
  
• Lost circulation at 109' so drilling continued
  with water and gel sweeps, with partial returns.
  
• Pipe became struck several times due to poor hole
  cleaning but was worked free thanks to quick
  reaction by the drilling foremen and crew, good
  procedures, and use of the top drive to back ream
  and pump thorough the string.
• 22" butt weld casing run and cemented.
• Rock and ready mix cement placed in the annulus
  for top job.

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KS-13 20" hole

• Drilled to 2079' with 9" straight hole mud motors
  and rotation.
• Partial lost circulation occurred from below the
  22" casing shoe with 200 barrel per hour loss at
  the casing point, despite the use of Check Loss.
  
• 16", 97 lb, L-80, SL Boss casing run with an
  external casing packer at the shoe of the 20" to
  prevent gas migration up the annulus.
• Cemented with foamed cement.
• ECP inflated with cement pumped through a packer
  set in the casing before the foam cement set up.

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KS-13 14-3/4" hole

• Directionally drilled with mud motors and
  rotation.
• 11-3/4", 65 lb, L-80 and GT-80, SL Boss casing
  run and reverse foam cemented.
• After casing was landed, drillpipe was run in the
  hole and stabbed into the float near the bottom
  of the casing.
• Mud was circulated conventionally and in reverse
  to condition the hole.
• Lead foam cement reverse circulated down the
  annulus with returns up the drillpipe.
• Unfoamed tail cement pumped down the drillpipe
  and displaced to the shoe while bleeding the
  excess foamed cement from the annulus.
• Back pressure started at 155 psig but returns
  declined and pressure dropped to 20 psi.
• When 30 barrels of cap slurry was pumped into the
  annulus it went on vacuum.
• After the cement set, a top job was done using 15
  barrels of accelerated slurry pumped into the
  annulus with foamer to make foam cement from
  nitrogen venting from the earlier cement.

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KS-13 10-5/8" hole

• Drilled directionally with mud motor and MWD to
  8297' total depth
• Lost circulation zones occurred from 5000 to
  7200
• Micronized cellulose was added to the mud to
  regain partial to full returns after each loss
  zone.
• High torque occurred at 8297' and 27' of hole was
  lost when the bit was picked up.
• The hole was cleaned out repeatedly without
  progress and vitrophyre was circulated in
  bottoms-up samples.
• While reaming, the drill string became stuck in
  hyaloclastite fill and was shot off at 7394' and
  abandoned in place
• The hyaloclastite zone came apart four days after
  it was drilled, so in the future casing will be
  run within two days of drilling through large
  hyaloclastite zones.
• Well completed with 8-5/8", 44 lb, GT-80, SL Boss
  perforated liner, set on the top of hyaloclastite
  fill at 6970'.

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KS-13 DEVELOPMENT

• KS-13 did not have high injectivity at first, so
  steps were taken to develop the well
• Returns were partial to full at the end of
  drilling.
• After changing over to water the well filled with
  945 gpm of cold water at zero WHP.
• Swab tools were run and stroked 90' 20 times,
  after which the well took 1050 gpm at zero WHP.
• Then a hydrostatic bailer was run in the hole
  twice and surged 57 barrels into the drill string
  each time.
• A small amount of formation material was
  recovered in the bailer and the hole would not
  fill with over 1000 gpm of water.
• An injection test was performed and the well took
  1700 gpm at 30 psig WHP.
• After the well was put on injection it improved
  to 2000 gpm of 300F water at 200 psig WHP.

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CONCLUSION

• Geothermal wells can be completed successfully in
  difficult conditions with good planning, expert
  drilling engineering, attentive supervision, good
  crews, and quality service company support.
• The casing patch repaired parted casing in KS-10
  with minimal restriction of production.
• Long strings of casing, cemented with foam
  cement, avoids two stage jobs or tie-back strings
  that may not hold up to thermal stress. Careful
  planning and execution essential for foam cement
  jobs, especially complex reverse circulation
  jobs.
• Quick implementation of procedures to deal with
  sticking pipe and lost circulation helped to
  prevent disasters.
• Rotation with drilling motors improved rate of
  penetration and the MWD reduced dog leg severity.
  
• Micronized cellulose LCM prevented mud and
  cuttings from permanently plugging low
  permeability injection zones
• Swabbing and hydrostatic bailing helped clean the
  LCM, mud and cuttings back out of the injection
  zones.

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PUNA GEOTHERMAL VENTURE, HAWAII - 2005 DRILLING
PROGRAM

• Paul Spielman, Ormat, Inc.
• William Rickard, Geothermal Resource Group, Inc.
• William Teplow, Consulting Geologist