Nomographic Solution for Preliminary Economic Evaluation of Geothermal Prospects

Abstract

A geologist is more effective when his exploration program is guided by first principles of economics, before final stages of prospect development when formal economic evaluations are carried out by others outside the exploration group. Nomographs have been developed that provide an aid to economic evaluation of geothermal prospects. Because of the need to average several rates that change with time. taxes and field production, for example, the nomographic solution is preliminary an does not substitute for more formal evaluations prior to an investment in deep drilling. Well rate and steam rate are inputted to determine a gross annual income adjusted to the price of steam. Recurring annual expenses are applied to determine the annual cash flow which is the money available to amortize the investment and produce the desired rate of return on the investment. Finally, number of years to payout is given by the nomographs.