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Dixie Valley — Geothermal Development in the Basin and Range

Since helping Sun Oil Company site and drill the discovery well in the late 1970s, GeothermEx has continued its involvement at Dixie Valley. Our work has included exploration, drilling, testing, geochemical analysis, resource due diligence for project financing, solving operational problems, and numerical simulation to evaluate alternative production and injection scenarios. The following describes work undertaken for an ultimately successful buyer when Oxbow Geothermal decided to sell its Dixie Valley assets.

Client: Caithness, LLC
Location: Dixie Valley, Nevada
Date: 1999

Project Goals

In 1999, Caithness Energy, one the largest producers of renewable energy in the United States, was interested in purchasing the 60 MW geothermal resource at Dixie Valley, Nevada from the Oxbow Group. Caithness approached GeothermEx to prepare a thorough due diligence report that would include a resource and operational assessment of the project. One significant challenge in the project was that Oxbow had begun using augmented injection in a number of wells, a technology that was relatively new and untested at the time of the engagement and therefore challenging to assess.

The GeothermEx Approach

GeothermEx began with a thorough review of the project’s historical performance, an assessment of the current operating conditions, and an evaluation of the effectiveness of the current operator’s strategy. The Dixie Valley project included both conventional production and injection wells in addition to the newer augmented injection wells. The augmented wells used shallow groundwater sources to raise the well pressure, a technology that was challenging to assess over the life of the project given the many variables in play. After the initial review, GeothermEx performed numerical simulation and used production data to assess the capacity of the field over the duration of the project. The final report concluded that the Dixie Valley field, with its mix of well types, could sustain its current output for the anticipated life of the project.

Outcomes

As the GeothermEx report concluded, the Dixie Valley field has consistently produced the expected 60 MW from its conventional production, injection and augmented injection wells. The GeothermEx team was able to correctly anticipate the performance of the enhanced injection wells, a significant achievement and one that, in hindsight, has proven highly valuable to Caithness Energy.