bargain buy, page-10

Peter,

In general terms there is a significant difference in cost between oil and geothermal wells. On the graph the vertical axis is logarithmic so that it is even greater than first appears. A group including Tester (involved in nearly everything geothermal) did some analysis on this. They offered some qualitative explanatory answers:

* The bore diameters for geothermal wells tends to be 8.5" to 10.5" whereas for oil they are more likely ~6.5" (as you suggested).
* Casings for oil wells are often cemented only at the bottom while for geothermal cementing occurs all the way up.
* Geothermal wells are more likely to be drilled in hard rock (for EGS anyway) which plays havoc with drill bits. The frequent and long bit trips adds considerably to completion time, i.e. rig hire costs.

I'm not sure that this would explain a double or triple cost but it's heading in the right direction. When Panax's crews drill a few more wells in sandstone their costs should reduce somewhat. Sandstone and granite are incomparable.

GDY has goals of becoming the paragon of the world in large scale EGS power production so that switching to an equipment hire company is probably too much of a come down. Their block buster rig has been sitting idle for many months.

Juke