Assessment of New Approaches in Geothermal Exploration Decision Making: Preprint

Geothermal exploration projects have significant amount of risk associated with uncertainties encountered in the discovery of the geothermal resource. Understanding when and how to proceed in an exploration program, and when to walk away from a site, are two of the largest challenges for increased geothermal deployment. Current methodologies for exploration decision making is left to subjective by subjective expert opinion which can be incorrectly biased by expertise (e.g. geochemistry, geophysics), geographic location of focus, and the assumed conceptual model. The aim of this project is to develop a methodology for more objective geothermal exploration decision making at a given location, including go-no-go decision points to help developers and investors decide when to give up on a location. In this scope, two different approaches are investigated: 1) value of information analysis (VOIA) which is used for evaluating and quantifying the value of a data before they are purchased, and 2) enthalpy-based exploration targeting based on reservoir size, temperature gradient estimates, and internal rate of return (IRR). The first approach, VOIA, aims to identify the value of a particular data when making decisions with an uncertain outcome. This approach targets the pre-drilling phase of exploration. These estimated VOIs are highly affected by the size of the project and still have a high degree of subjectivity in assignment of probabilities. The second approach, exploration targeting, is focused on decision making during the drilling phase. It starts with a basic geothermal project definition that includes target and minimum required production capacity and initial budgeting for exploration phases. Then, it uses average temperature gradient, reservoir temperature estimates, and production capacity to define targets and go/no-go limits. The decision analysis in this approach is based on achieving a minimum IRR at each phase of the project. This second approach was determined to be less subjective, since it requires less subjectivity in the input values.