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Contact Energy Abandons New Deep Geothermal Well

Contact Energy Abandons New Deep Geothermal Well At Ohaaki

Contact Energy announced today that the BR-50A well at Ohaaki geothermal field has been plugged and abandoned due to drilling difficulties.

The well was initially spudded as BR-50 in March 2002 but drilling was suspended in April 2002 due to technical problems. After mobilising aerated drilling equipment from overseas, drilling on BR-50A restarted in May 2003. The well successfully drilled through unstable strata to its target casing depth of 1050 metres.

However, hole conditions deteriorated and this prevented the installation of protective casing to finish the well. BR-50A was the first geothermal well drilled in New Zealand using aerated techniques.

Contact’s Chief Executive, Mr Stephen Barrett, said “the Ohaaki station is designed to operate at 104 MW, but has not been able to sustain that level of output because the steam flow from the associated geothermal field has been lower than was expected at the time the plant was built in the 1980s.”

“To enhance electricity production at Ohaaki, Contact began a programme last year of drilling new wells to lift the station’s output.”

“Drilling wells to tap the deep resource is both more expensive and technically challenging than extraction from the shallow geothermal reservoir.”

The costs associated with this well are approximately $3.7 million post-tax, and will be expensed this financial year.

Mr Barrett said “Contact has other deep wells at Ohaaki that have been reliably producing steam for a number of years, so we have some experience in accessing the deep geothermal resource.”

“Nonetheless, it is obviously very disappointing to have two successive drilling attempts fail to achieve production status at this location.”

“The Ohaaki station has excellent generation plant, and we remain committed to gaining the maximum economic utilisation of these assets.”

“We will be carefully reviewing the experience with these last two wells to determine what lessons they hold for the future.”

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