Good decisions drive cost effective geothermal projects. Effective development decisions in uncertain conditions rely on forecasting the performance of the proposed facility. The uncertainty and high cost of drilling projects makes forecasting performance of a proposed well a key geothermal expertise. Probability of success (POS) for a well can succinctly express a forecast when based on a clear definition of success. Extensive work on processes associated with forecasting international political events have demonstrated a “style of thinking” that can markedly improve successful forecasts in uncertain settings (Tetlock and Garner, 2015). Team thinking processes developed at Unocal to make drilling decisions had important similarities to the styles later recommended from these international studies. The Unocal decision process on drilling projects helped reduce drilling costs to around 50% of industry averages. This large impact on costs should encourage work on decision processes in geothermal development in order to attempt similar cost improvements. Beyond a decision about whether and where to drill, estimates of the POS can be used to compare relative expected values of well designs. Although expected value comparisons are simplistic, they provide a monetary value context that supports good team-based well design decisions. Expected value examples for two well design decisions are shown including a decision on whether to drill a slim hole or a standard well and whether to drill a directional well or a vertical well. Results suggest that expected slim hole value is lower than well value except in low quality targets. This helps frame other issues such as strategic values, access costs, and drilling risks. In the case of directional wells, calculations suggest that a deviated well should be planned when the improvement of the well POS is .05 or greater.

Press the Back button in your browser, or search again.

Copyright 2017, Stanford Geothermal Program: Readers who download papers from this site should honor the copyright of the original authors and may not copy or distribute the work further without the permission of the original publisher.