Petrolern has developed an integrated, patented screening platform to identify appropriate oil and gas wells for being converted to geothermal sources of heat and/or electricity.
These existing late-stage, shut-in, or unplugged holes remove the significant cost of drilling new wells.
The screening tool integrates modules defining critical parameters for the Reservoir, Borehole, Surface System, Environment, Infrastructure, and Economics, with screening tests at intermediate stages to define potential profitability for conversion of a well or group of closely spaced wells. Uncertainty of parameters and sensitivity of outcome to relevant parameters are handled through probabilistic simulation and economic viability is determined for each project.
Sample costs of produced electricity are in the range from 3 to 5 US cents per Kilowatt-hour, even without tax credits or abandonment deferrals. Co-production of hydrocarbons and geothermal energy is also feasible. Not only does the conversion of geothermal energy avoid the cost of drilling new wells and defer the cost of abandonment for the life of the geothermal system, it also indicates commitment to green energy solutions.
Project costs can be kept even lower as cheaper more flexible modular power systems are tested and become commercial.
Our projections from sample conceptual conversion projects indicate repurposing some oil and gas wells to geothermal heat and power production is profitable with an internal rate of returns (IRR) in the range of interest (7 to 27 %) to investment banks.
For over a decade, research and discussions looked into opportunities to produce geothermal electricity and/or heat from existing lower temperature sedimentary formations, yet there is still no commercial development.
Geothermal energy currently plays a small role in meeting the world's energy demand, and commercial production has been mainly focused on high-temperature, often volcanic formations.