Technology Demonstration

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1 Advanced Geothermal Drilling Technology Demonstration in the Chocolate Mountains, CA David W. Raymond California Geothermal Forum October 20, 2016 Sandia National Laboratories is a multi-mission laboratory managed and operated by Sandia Corporation, a wholly owned subsidiary of Lockheed Martin Corporation, for the U.S. Department of Energy s National Nuclear Security Administration under contract DE-AC04-94AL SAND NO C.

2 Background Overview Conventional geothermal drilling is difficult hard/ abrasive/fractured rock high temperatures loss circulation Migrate mature/proven rock penetration systems used in Oil &Gas/Minerals industry to improve geothermal ldrilling Barriers to PDC bit adoption Lack of wells Service industry absence Poor performance in early field trials Project Approach Phase 1 Preliminary field trials to demonstrate potential & highlight g deficiencies Phase 2 Service company involvement in performance remediation and custom development Phase 3 Secondary/Follow Up field trials for verification & validation

3 Acknowledgements DOE/EERE/Geothermal / Technologies Office ARRA Program Sponsorship Steve Bjornstad; U.S. Navy Geothermal Program Office Aaron Schen; NOV Downhole Joel Barbour and the crews from Rig 77; Barbour Drilling Prospect Geotech Steven Knudsen (ret.), Doug Blankenship, Dennis King & Jiann Su; Sandia National Laboratories Keith Barrett; PrimeCore Systems Inc.

4 2011 Drilling Project Description Identify Geothermal Developer/Drilling Company US Navy GPO agreed to collaborate by providing wells of opportunity MOU with Sandia/Navy (DOE/DOD) Barbour Well, Inc., USN GPO drilling contractor Provide drill rig time, integration, and coordination with test plan Identify Test Site/Well of Opportunity Chocolate Mountains Aerial Gunnery Range, CA Two geophysical test holes planned; One pursued Investigate temperature field/hydrothermal alteration Metamorphosed volcanicrocks anticipated

5 LOCATION SAMPLE GEOLOGY BIT 1 BIT 2

6 BARBOUR RIG 77

7 DATA SYSTEMS AND ACQUISITION

8 CENTER SCREEN BIT 1 6 DEC :19

9 BIT 1 6 DEC :19

10 BLACK BOX HARDWARE

11 Drilling Summary Start Finish Bit Size Drilling Date ft ft inches Hours Daily ROP Activity 11/27/ Rig Up 11/28/ /29/ /30/ /1/ /2/ Surface Logging 12/3/ Surface Casing 12/4/ /5/ /6/ /7/ /8/ /9/ /10/ /11/ /12/ Fishing 12/13/ Fishing 12/14/ /15/ Bit Depth Depth Feet Vendor Type in Out Drilled HTC GX C1V Smith GF S Security S84F HTC WE HTC GT Reed Reed Security XSD30D HTC GT

12 BIT 1 NEW 6 DEC 2011

13 BIT 1

14 Start Depth Stop Depth ROP Total Depth Average MIN 16.9 MAX 38.2

15 BIT 1 AFTER REMOVAL 7 DEC FT DRILLED 26 FT/HR AVERAGE ROP

16 BIT 2 NEW 7 DEC 2011

17 BIT 2

18 Start Depth Stop Depth ROP Total Drilled Average MIN 11.2 MAX 28.9

19 BIT 2 AFTER REMOVAL 9 DEC FT DRILLED 20 FT/HR AVERAGE

20 BIT 3 NEW 9 DEC 2011 Start Stop Total Footage Depth Depth ROP Drilled Average MIN 7.3 MAX

21 Drill Cost Comparisons Case Bit Type Bit Scenario Rock Reduction Component of Drilling Costs. Bit Cost, BC [$] ROP [ft/hr] Footage Initial Drilling Trip Cost Per Drilled, L Depth, ID Time, DT Time Foot [ft] [ft] [hr] [hr] [$/ft] Interval cost [$k] A PDC Bit 1 Actual performance $ 15, $ 45 $ 32,780 B Roller Cone Bit 3 if Bit 3 drilled the Bit 1 interval $ 3, $ 71 $ 3, $ 74 $ 52,507 C PDC Bit 2 DBR $ 46, $ 115 $ 65,243 D PDC Bit 2 Adequate rig torque no DBR $ 15, $ 59 $ 33,355 E Roller Cone Bit 3 if Bit 3 drilled the Bit 2 interval $ 3, $ 72 $ 3, $ 89 $ 43,681

22 Path Forward PHASE TWO New bit design developed dand manufactured Integrated optimal features in both phase one bits yieldingpdc bitdesign for geothermal drilling Torque control components are part of phase two design to control rig torque up PHASE THREE Awaiting possible fieldtest opportunities with industry

23 Conclusions Advanced Drilling Technology Demonstrations Successful Field trial with National Lab/Operator/Service / Company participation Advanced PDC Bits for geothermal drilling Downhole tool deployment for monitoring Operating Conditions and Specific Energy monitoring using advanced surface rig displays Driller coordination and communication for improvements Results Demonstrated PDC bits can drill geothermal/prevail over roller cone bits Improved ROP Longer Life Matching PDC bits with rig capability is necessary for best performance Specific Energy monitoring with driller coordination/communication has demonstrated performance gains/cost reductions

24 Thank You

25 Backup Slides

26 BIT1

27 BIT 1

28 BIT 2

29 BIT 2

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