U.S. Department of Energy Albuquerque Operations Office

1. Geothermal Resource Exploration and Definition U.S. Department of Energy Albuquerque Operations Office

2. GRED ProgramGeothermal Resource Exploration & Definition • Program Management Team • Dan Sanchez, DOE/AL • Ed Hoover, SNL • Norm Warpinski, SNL • Allan Sattler, SNL • Ray Fortuna, DOE/HQ • Funding $900,000 — FY00 $2,000,000 — FY01 $1,775,000 — FY02 $3,500,000 — FY03 (YTD) TBD — FY04

3. GRED ProgramGeothermal Resource Exploration & Definition • EE-2C Program Area • Exploration and Drilling • Goals and Objectives • Develop collaborative efforts to support the exploration for and definition of new geothermal resources • Mitigate The Initial Risk Of Confirming A Reservoir • Encourage Geographic Diversity • Effect an increase in the electrical power generated from geothermal energy • Overall Generating Capacity • Number Of States

4. GRED ProgramGeothermal Resource Exploration & Definition • Program Approach • Geographic Diversity Focus • GRED • New States, New Fields, Extensions • GRED II • New States, New Fields • Promote As Many Awards As Possible • Require Slim-Hole Drilling • DOE Cooperative Agreements • Preferred Contractual Instrument • Flexibility

5. GRED ProgramGeothermal Resource Exploration & Definition • Scope of Work • Phase I • Exploration Work To Site A Test Well • Geologic Studies, Geophysics, Geothermometry • Phase II • Slim-Hole Drilling • Logging, Core, Short Tests • Phase III • Well Testing & Reservoir Assessment

6. GRED Science and Engineering Areas Geophysics Drilling Phase I : Exploration geophysics to determine optimum location for a test well Phase II : Drilling of a test well to access the reservoir and evaluate geologic features Fourmile Hill Temperature Logs (454° Max) Steamboat Hills Velocity Model Testing Assessment Phase III : Testing of the well for reservoir qualities, flow capacity & thermal characteristics Potential of the new resource to provide geothermal power Lightning Dock Temperature Contours Rye Patch Testing

7. GRED I – Site Locations Fourmile Hill Blue Mountain Rye Patch U-boat Steamboat Cove Fort/Sulphurdale • Rye Patch Presco Energy, LLC • Blue Mt. Noramex Corp. • Cove Fort Utah Municipal Power Agency • Fourmile Hill Calpine Siskiyou Geothermal Partners • Steamboat SB Geo, Inc. • U-Boat Coso Operating Unit (Caithness) • Lightning Dock Lightning Dock Geothermal, Inc. Lightning Dock NV UT CA NM

8. GRED I ProgramGeothermal Resource Exploration & Definition • Rye Patch • Presco Energy, LLC • Completed Phase II & III • Accomplishments • Well Drilled To 643 m • Intermediate Limestone Target • Polyurethane Foam Treatment • Successful Flow Testing • ~ 6 Hour Test • 150°C Fluid • 2,000,000 lb/hour

9. GRED I ProgramGeothermal Resource Exploration & Definition • Steamboat • S.B. Geo, Inc. • Completed Phase II & III • Accomplishments • 2 Wells Drilled • 610 m • Cored From 235 m to TD • 297 m • Cored From 152 m to TD • Temperatures Comparable To Other Nearby Wells • Testing Recently Completed

10. GRED I ProgramGeothermal Resource Exploration & Definition • Blue Mountain • Noramex Corp. • Completed Phase II • Beginning Phase III • Accomplishments • Successfully Drilled 650m Well • 150° C Temperature

11. GRED I ProgramGeothermal Resource Exploration & Definition • Fourmile Hill • Calpine Corporation • Completed Phase I • Accomplishments • Temperature Gradient Well Completed • 1346 m Depth • 230°C Maximum Temperature • Phase II Work Ongoing Fourmile Hill Temperature Survey

12. GRED I ProgramGeothermal Resource Exploration & Definition • Cove Fort/Sulphurdale • Utah Municipal Power Agency • Completed Phase I & II • Accomplishments • Magnetic & Resisitivity Surveys Completed • Several Possible Targets • Well Drilled To 598 m • 157° C Temperature • Complicated Geologic Structure

13. GRED I ProgramGeothermal Resource Exploration & Definition • Lightning Dock • Lightning Dock, Inc. • Completed Phase I • Beginning Phase II • Accomplishments • Completed Geophysical Surveys • Aeromagnetic • Gravity • Resistivity • Seismic • Targeting Well Site In Complex Structural Environment Lightning Dock Gravity & Magnetic Survey Results

14. GRED I ProgramGeothermal Resource Exploration & Definition • U-Boat • Coso Operating Unit • Completed Phase I • Accomplishments • Completed Geophysical Surveys • Gravity • Microseismic • Seismic • No Phase II Planned MEQ Seismic Gravity

15. GRED II ProgramGeothermal Resource Exploration & Definition • Second Round Program (GRED II) • Focus On Non-Producing Sites • Solicitation issued, April 2002 • Solicitation closed, June 2002 • Financial Assistance Awards, September 2002 • 7 Successful Projects • 5 States • All Non-Producing Sites

16. GRED II – Site Locations Animas Valley, NM Raft River, ID San Francisco Mt., AZ Arnica Sink, CA Truckhaven, CA Blue Mt, NV Fly Ranch, NV AZ CA IDNM NV

17. GRED ProgramGeothermal Resource Exploration & Definition • Conclusions • Successful GRED I Program Is Nearly Complete • 7 Projects Funded (4 States) • 5 Projects Should Progress Through Phase III • Significant Potential In These 5 Sites • GRED II Initiated • 7 New Projects Funded (5 States) • Overall Program Is Successfully Encouraging New Exploration & Reservoir Confirmation