Presented at “Short Course V on Conceptual Modelling of Geothermal Systems”,

organized by UNU-GTP and LaGeo, in Santa Tecla, El Salvador, February 24 - March 2, 2013.

GEOTHERMAL TRAINING PROGRAMME LaGeo S.A. de C.V.

VOLUMETRIC RESOURCE ASSESSMENT

Zosimo F. Sarmiento1, Benedikt Steingrímsson2

and Gudni Axelsson2

1
FEDCO – Filtech Energy Drilling Corporation
Tesco Compound, RMT Industrial Complex Tunasan, Muntinlupa City, 1773
PHILIPPINES
[email protected]
2
ISOR – Iceland GeoSurvey, Grensásvegur 9, 108 Reykjavik
ICELAND
[email protected]
[email protected]

ABSTRACT

Geothermal resource assessment is the estimation of the amount of thermal energy

that can be extracted from a geothermal reservoir and used economically for a period
of time, usually several decades. Various methods have been developed for this
purpose. At early stages of geothermal development, when available data are limited,
relatively simple methods are used in assessing the reservoirs. But as more
information are gathered on the reservoir parameters and experience is gained in
producing energy from the reservoir, sophisticated numerical computer models are
used to simulate the geothermal reservoir in the natural state and the response to
utilization which eventually will determine the generating potential of the reservoir.

The main focus in this paper is on the volumetric method (stored heat calculations)
and the key elements that constitute a thorough evaluation of a geothermal resource.
Calculation of the geothermal energy reserves based on the range of values of the
various reservoir parameters can be carried out using Monte Carlo simulation. It
applies a probabilistic method of evaluating reserves or resources that captures
uncertainty. Given the complexity and heterogeneity of the geological formations
of most geothermal reservoirs, this method is preferred as opposed to the usual
deterministic approach which assumes a single value for each parameter to represent
the whole reservoir. Instead of assigning a “fixed” value to a reservoir parameter,
numbers within the range of the distribution model are randomly selected and drawn
for each cycle of calculation over a thousand iterations.

1. INTRODUCTION

Geothermal resource evaluation (resource assessment) is a process of evaluating surface discharge and
downhole data, and integrating it with other geoscientific information obtained from geological,
geophysical and geochemical measurements. The main focus of geothermal resource evaluation or
resource assessment is to confirm that there exists a geothermal resource that could be exploited at a
certain capacity for a certain period with well defined fluid characteristics and resource management
strategies to ensure production sustainability over a long term period. Resource evaluation serves as a

1
Sarmiento et al. 2 Volumetric Resource Assessment

mechanism to verify if the project may be carried out from a technical standpoint by 1) defining the
technical characteristics, selecting the best conditions after a technical and economical comparison of
various development alternatives and 2) in choosing the type of plant and equipment design that would
define their functional characteristics, their cost and implementation schedule and 3) assessing costs and
benefits, economic and financial comparisons out of various alternatives as part of an overall project
technical and financial feasibility studies.

An assessment of geothermal resources can be made during the reconnaissance and exploratory stage
prior to well drilling; typically dealing with the extent and characteristics of the thermal surface
discharges and manifestations, geophysical boundary anomaly, and the geological setting and
subsurface temperatures inferred from geothermometers. The main feature of this evaluation is the
presentation of a conceptual or exploration model that pinpoints the possible heat source and host of the
geothermal reservoir. The results of this study serve as the basis for drilling shallow and deep
exploratory wells to confirm the existence of a resource.

A discovery well drilled during the exploratory stage provides the basis for refining the preliminary
conceptual model. By incorporating the results of drilling and well measurements and testing, reserves
estimation needed in establishing the size of the reservoir and numerical modelling used in forecasting
the future performance of the field can be conducted. Moreover, when planning to expand the capacity
of an operating field, a resource assessment will describe the overall production history to show if
additional reserves may be available to supply steam to the power plant.

This paper discusses the main elements of a geothermal resource assessment typically applied at early
stages of geothermal development in the Philippines and Iceland. This mainly involves the volumetric
method (stored heat calculations) with Monte Carlo simulation technique, which is named after the city
of Monte Carlo in Monaco, where the primary attractions are casinos that play games of chance like
roulette wheels, slot machines, dice, cards and others. It is a technique that uses a random number
generator to produce and extract an uncertain variable within a distribution model for calculation in a
given formula or correlation. Monte Carlo simulation became popular with the advent and power of
computers; because the simulations are too tedious to do repeatedly.

The numerical simulation modelling is the preferred technique to determine the generating potential of
the geothermal reservoir, when the exploration reaches the feasibility stage and through later
developments and operation of the geothermal reservoir. The numerical reservoir modelling will be
discussed in another paper at this short course.

2. THE GEOTHERMAL RESOURCE

2.1 Location

With a portfolio of various geothermal prospects, investors consider the location of a geothermal
prospect as a primary factor in their project selection. Projects for exploration and development are
ranked by looking first at the various risks associated with the resource characteristics or quality of
fluids, size, geological risks or hazards and location with respect to the load centre or market. Given the
same resource risks and characteristics, prospects that are close to the load centres and transmission grid
are more likely to be chosen by investors for exploration and development. It also favours a project if
the government prioritizes the development of infrastructures in the area where the resource is located.
Prospects located in national parks and requiring special legislations before permits are issued for
development are more likely to be at the end of the wish list of investors.
Volumetric Resource Assessment 3 Sarmiento et al.

2.2 Stage 1 Surface Exploration Program

A geothermal surface exploration program is usually implemented in three phases starting from (1) a
due diligence work which is carried out by thoroughly reviewing available information related to
previous investigations of hot springs, fumaroles, silica mounds, solfataras and alteration zones as well
as air-photo analyses and remote sensing studies, (2) field reconnaissance surveys including primarily
the acquisition of geology and geochemistry data with a glimpse of what is expected on the
environmental aspects of the area and 3) detailed exploration surveys consisting of geological mapping,
geochemical sampling and geophysical measurements that can be used to delineate a potential
geothermal reservoir and assist in the designation of possible exploration drilling targets (Richter et al.,
2010).

In the Philippines, due diligence work is carried out through the regional identification of a prospect by
identifying regional targets based on the association of most high temperature geothermal fields in the
Philippines with the Philippine Fault; an active, left-lateral, strike slip fault dotted with Pliocene-
Quaternary volcanoes, that forms a discontinuous belt from Northern Luzon to Mindanao. The
Philippines has about 71 known surface thermal manifestations associated with decadent volcanism
(Alcaraz et al., 1976). These are distributed in 25 volcanic centres as hot spouts, mud pools, clear boiling
pools, geysers, and hot or warm altered grounds.

The results of a due diligence study rank the various geothermal prospects that have shown potential for
exploration and development by carefully looking into the intensity and significance of the different
thermal manifestations observed in the area. Immensely hot and widespread occurrences of thermal
manifestations indicate a greater potential for a high temperature and large size reservoir. Acidic fluids
are less preferred than the more benign fluids in view of the constraints imposed on handling the
corrosion effects on casings and pipelines as well as the associated reservoir management problems
during exploitation. The ranking of the field based on such geologic and geochemical parameters are
then produced for selection and prioritization in each of the company’s future project portfolios. This
technique resulted in achieving a very high success ratio in the Philippines, by being able to discover
high temperatures fields with exception of some areas that are lacking in permeability and those that
have exhibited acid and magmatic fluids.

The field reconnaissance surveys will confirm what has been reported and seen from the areal photos
and satellite images. Geologists and geochemists collect both rock and fluid samples, map out major
surface manifestations, and then document all the observations that are significant to all the thermal
areas for further investigations. The report should show the probable areal boundaries by which the
detailed geological, geochemical and geophysical surveys will be conducted. It is on the basis of the
results of the reconnaissance surveys that a budget is prepared to cover the expected cost of the detailed
exploration surveys.

Following the identification of a more potentially resourceful area, detailed surface geological mapping,
geochemical sampling and geophysical measurements are conducted. The results of the multi-
disciplinary works are then integrated to draw out a hydrological model of the system, where the
postulated upflow and outflow areas are described.

Previously the Philippines and Iceland have been very successful in using resistivity measurements
(Schlumberger and later TEM) in discovering some of the operating geothermal fields in the countries
today. But it can’t be denied that more exploratory wells had to be drilled subsequently than today
before the main sweet spots in those fields were identified. Recent application of Magnetotellurics
(MT), which are found to have been able to predict more precisely the more drillable productive sections
of the reservoir in Iceland and many other geothermal countries of the world, still have to make its mark
in the Philippines, given the complex geological setting of the remaining areas that are being offered for
concessions. Previously 1d interpretation of the data was carried out but with increased computer
capacities joint three dimensional interpretation of TEM and MT data is routinely carried revealing more
Sarmiento et al. 4 Volumetric Resource Assessment

details in the resistivity structure of the geothermal reservoir than is possible with one dimensional
interpretation.

With the construction of a conceptual or exploration model of the field from the results of the detailed
surface exploration techniques, a pre-feasibility report is also prepared which similarly touches on
preliminary cost estimation, financial analyses, market studies and environmental impact review.

2.3 Stage 2 Exploration Drilling Program

In view of the large drilling cost (of 3-5 million dollars per well) and the associated risk in hitting a good
production well, it is at this stage when the need for a well-defined financial risk management strategy
and instruments becomes extremely important. In the oil and gas industry, farm-in agreements are
usually resorted to where additional investors or consortiums partners are invited to share in the cost of
drilling. Financial institutions and other companies are willing to advance the cost of drilling in favour
of a carbon trade mechanism.

The local geothermal industry in the Philippines and Iceland apply similar development strategy. The
Philippines has explored 22 distinct high temperature resources, to an advanced stage and the
exploration in Iceland includes detailed surface exploration and drilling of some 10 geothermal areas.
Their development history has a general trend. Upon the integration of the multi-disciplinary
exploration data from geology, geochemistry and geophysics for a selected area, a preliminary
conceptual model is proposed. Drilling of 2-3 deep exploration wells ensues to validate the hydrological
model and to confirm the existence of a geothermal system. Potential targets are identified within the
closure of a resistivity or electrical sounding anomaly based on their chances of striking the upflow
zones, penetrating permeable structures at depths. The first well is usually targeted towards the main
upflow zone, where the chance of drilling a discovery well is high. The other two wells are drilled to
probe for the lateral extension of
524,000m E 528,000m E 532,000m E
the area; usually to block a well
2 LEGEND:
field equivalent to at least 5 km , APO1D
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sufficient enough for Isoresistivity of Bottom
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committing to a 50-100 MW
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Targeting the first well is the FIGURE 1: Exploratory well location map showing provisional
most difficult decision to make resource boundary for Mindanao geothermal field.
in a new project as its results (Modified from Delfin et al, 1992)
Volumetric Resource Assessment 5 Sarmiento et al.

may affect the final outcome of the project, especially if the results are not encouraging. If this happens,
the decision to pursue drilling of the second well hinges fully on whether additional targets differed
significantly and/or is entirely different on the first target. The third well is usually drilled only after
the second well gives promise or provides a new perspective on the understanding of the prospect.
Otherwise, it is cancelled.

2.4 Geology of the Exploration Wells

The subsurface geologic data indicates the equilibrium temperatures of minerals penetrated by the well
from the top of the reservoir down to the bottom of the well. Obvious from the results are the alteration
minerals commonly found in geothermal systems associated with a high temperature resource. Typical
of these minerals are the elite, smectite and epidote. When these temperatures are compared with
measured downhole temperatures, the relationship of the alteration minerals with respect to the
equilibrium state and maturity of the system is established. If the alteration minerals indicate
temperatures much higher than measured temperatures, a relict geothermal system or waning geothermal
resource exists. Cooling of the fluids might have also taken place. Mineral assemblages like alunite are
usually associated with acidic fluids and therefore their detection during drilling gives warning that the
zone by which it was detected may have to be isolated. Other clay minerals are used during drilling to
predict temperatures at depth like those of kaolinite, smectite and illite to be in the range of temperatures
< 230°C; smectite, illite and quartz with fewer amounts of calcite and chlorite to be in the range of
temperature >230°C; epidote, albite, calcite and anhydrite to indicate moderate temperatures of 200-
300°C and potassic minerals near hot fluids to be indicative of >300°C of magmatic and high salinity
fluids.

3. THERMAL ENERGY CALCULATION

The volumetric method refers to the calculation of thermal energy in- the rock and the fluid which could
be extracted based on specified reservoir volume, reservoir temperature, and reference or final
temperature. This method is patterned from the work applied by the USGS to the Assessment of
Geothermal Resources of the United States (Muffler, 1978). In their work, the final or reference
temperature is based on the ambient temperature, following the exhaust pressures of the turbines (for
electrical generation). Many, however, choose a reference temperature equivalent to the minimum or
abandonment temperature of the geothermal fluids for the intended utilization of the geothermal
reservoir. For space heating the abandonment temperature is typically 30-40°C but for electricity
generation the reference temperature is usually ~180°C (the separation temperature) for conventional
power plants but as low as 130°C for binary plants. . It is important to keep in mind, however, that the
efficiency used for the particular energy generation process be based on the same reference temperature,
whatever reference temperature is selected.

The equation used in calculating the thermal energy for a liquid dominated reservoir is as follows:

(1)

where

∙ ∙ ∙ ∙ 1 ∅ ∙ – (2)

and

∙ ∙ ∙ ∙∅ ∙ – (3)

The question to be raised is: What if the reservoir has a two-phase zone existing at the top of the liquid
zone? Theoretically, it is prudent to calculate the heat component of both the liquid and the two-phase
Sarmiento et al. 6 Volumetric Resource Assessment

or steam dominated zone of the reservoir. However, a comparison made by Sanyal and Sarmiento
(2007) indicates that if merely water were to be produced from the reservoir, only 3.9 percent is
contained in the fluids; whereas, if merely steam were to be produced from the reservoir, only 9.6 percent
is contained in the fluids. If both water and steam were produced from the reservoir, the heat content in
the fluids is somewhere between 3.9 and 9.6 percent. Conclusively, all the fluids are in the rock and it
doesn’t matter whether one distinguishes the stored heat in water and steam independently.

This approach is illustrated by the following set of equations to separately account for the liquid and
steam components in the reservoir:

(4)
where

∙ ∙ ∙ ∙ 1 ∅ ∙ (2)

∙ ∙ ∙∅∙ 1 ∙ (5)

∙ ∙ ∙∅∙ ∙ (6)

and the parameters are as follows:

QT = Total thermal energy (kJ);

Qr = Heat in rock (kJ);
Qs = Heat in steam (kJ);
Qw = Heat in water (kJ);
A = Area of the reservoir (m2);
h = Average thickness of the reservoir (m);
Cr = Specific heat of rock at reservoir condition (kJ/kg°K);
Cl = Specific heat of liquid at reservoir condition (kJ/kg°K);
Cs = Specific heat of steam at reservoir condition (kJ/kg°K).
Ø = Porosity;
Ti = Average temperature of the reservoir (°C);
Tf = Final or abandonment temperature (°C);
Sw = Water saturation;
ρsi = Steam density at reservoir temperature (kg/m3);
ρwi = Water density at reservoir temperature (kg/m3);
Hsi, Hwi = steam and water enthalpies at reservoir temperature (kJ/kg); and
Hwf = Final water enthalpy at abandonment temperature (kJ/kg).

4. POWER PLANT SIZING

The above calculations only provide for the total thermal energy in place in the reservoir. To size the
power plant that could be supported by the resource, the following equation is further introduced.

∙ ∙
(7)
∙

where P = Power potential (MWe);

Rf = Recovery factor;
Ce = Conversion efficiency;
Pf = Plant factor; and
t = Time in years (economic life):
Volumetric Resource Assessment 7 Sarmiento et al.

4.1 Recovery factor

Recovery factor refers to the fraction of the stored heat in the reservoir that could be extracted to the
surface. It is dependent on the fraction of the reservoir that is considered permeable and on the efficiency
by which heat could be swept from these permeable channels.

4.2 Conversion efficiency

The conversion efficiency takes into account the conversion of the recoverable thermal energy into
electricity. More accurately the conversion can be estimated in two stages, first the conversion of the
thermal energy into mechanical energy and later the conversion of the mechanical energy into electrical
energy. This is not considered necessary, in view of all the uncertainties involved in the volumetric
assessment method, so applying a single thermal-mechanical-electrical efficiency is considered
sufficiently accurate.

4.3 Economic life

The economic life of the project is the period it takes the whole investment to be recovered within its
target internal rate of return. This is usually 25-30 years.

4.4 Plant factor

The plant factor refers to the plant availability throughout the year taking into consideration the period
when the plant is scheduled for maintenance, or whether the plant is operated as a base-load or peaking
plant. The good performance of many geothermal plants around the world places the availability factor
to be from 90-97%.

5. GUIDELINES FOR THE DETERMINATION OF RESERVOIR PARAMETERS

Recent developments in the geothermal industry require the establishment of guidelines on how reserves
estimation is to be approached and reported in corporate annual reporting or financial statements. Sanyal
and Sarmiento (2005) had proposed three categories for booking of reserves: proven, probable and
possible; which are more appropriately estimated by volumetric methods. The reserves could be
expressed in kW-h and/or barrels of fuel oil equivalent (BFOE). Conversion into MW unit should only
be done when sizing up a power station for a period of time. Recently, Clothworthy et al. (2006),
proposed to develop an agreed methodology for defining the reserves in order to increase market
confidence in the industry and deter developers and consultants from quoting any figures they choose.
The same categories of reserves are indicated except that the word inferred was used instead of the
possible reserves. Lawless et al. (2010) is similarly proposing guidelines on methodologies and other
consideration when preparing reserves estimation in response to the requirement of investment
companies, especially, those listed in the stock exchanges.

5.1 Definitions

The need for an industry standard is now imminent following the above developments, to create
consistency in declaring the estimated reserves for a given project. Sanyal and Sarmiento (2005) uses
the result of Monte Carlo simulation to determine the proven, probable and possible or inferred reserves
based on the resulting percentiles obtained from the cumulative frequency or the probability density
function. The percentile value indicates the value of probability that the quantities of reserves to be
recovered will actually equal or exceed. The above and all other definitions in this paper conform with
SPE (2001), where the proven reserves will have a P90 (90 percentile) probability, P50 for the proven
Sarmiento et al. 8 Volumetric Resource Assessment

+ probable reserves and P10 for the proven + probable + possible reserves. The histogram of
geothermal reserves calculated by Monte Carlo simulation is often highly skewed; hence, the proven +
probable is better represented by the most likely or the mode instead of the P50.

5.2 Resource

Resource is the energy which can be extracted economically and legally at some specified time in the
future (less than a hundred years).

5.3 Reserves

Reserves are defined as quantities of thermal energy that are anticipated to be recovered from known
reservoirs from a given date forward. A reserve is the part of the resources, which can be extracted
economically and legally at present and that is known and characterized by drilling or by geochemical,
geophysical and geological evidence (Muffler and Cataldi, 1978; Dickson and Fanelli, 2002).

5.4 Proven

Proven reserves are quantities of heat that can be estimated with reasonable certainty based on
geoscientific and engineering data to be commercially recoverable from the present to the future, from
known reservoirs under current economic conditions and operating methods and government regulation.
The definition by Clotworthy et al (2006) and Lawless et al. (2010) give more specific descriptions,
stating that a proven reserve is the portion of the resource sampled by wells that demonstrate reservoir
conditions and substantial deliverability of fluids from the reservoir.

5.5 Probable

Probable reserves are unproven reserves which are most likely recoverable, but are less reliably defined
than the proven reserves but with sufficient indicators of reservoir temperatures from nearby wells or
from geothermometers on natural surface discharges to characterize resource temperature and
chemistry.

5.6 Possible

Possible reserves have

slighter chance of recovery
than the probable reserves but
have sound basis from
surface exploration, such as
springs, fumaroles, resistivity
anomalies, etc., to declare
that a reservoir may exist.
Clotworthy et al. (2006)
adopted the inferred
resources from what could
cover possible reserves based
on McKelvey box as adopted
by SPE (2001). Based on
their graphic illustration, the FIGURE 2: Illustration of the boundaries used in differentiating
probable reserve the three categories of reserves
encompasses what could be
categorized as only possible reserves in the Philippines (Figure 2). From probable to possible there is
an increasing geoscientific and economic uncertainty whereas inferred connotes further geoscientific
uncertainty only.
Volumetric Resource Assessment 9 Sarmiento et al.

The following guidelines or set of criteria are followed in the resource assessment and reserves
estimation in the Philippines.

6. UNCERTAINTY DISTRIBUTION

The accuracy of the methods used in geothermal reserves estimation depends on the type, amount, and
quality of geoscientific and engineering data, which are also dependent on the stage of development and
maturity of a given field. Generally, the accuracy increases as the field is drilled with more wells and
more production data become available. Volumetric estimation is most commonly applied during the
early stage of field development to justify drilling and commitment for a specified power plant size.
This method is better applied during the early stage than numerical modelling which requires significant
number of wells and production history to be considered reliable. To be used for companies’ annual
reporting and to enhance corporate assets for valuation, booking of geothermal reserves could be
performed during the maturity of the field (Sanyal and Sarmiento, 2005). However, because of the
limited data and uncertainty on the assumptions on reservoir parameters, some degree of cautiousness
and conservatism are also inputted. This approach which takes into account the risk factor in the
decision making can be quantified with reasonable approximation using Monte Carlo Simulation.

Unlike a deterministic approach, where a single value representing a best guess value is used, the
probabilistic method of calculation is considered to account for the uncertainty on many variables in
geothermal reserves estimation. As seen from Table 1, a range of possible reserves estimates could be
obtained depending on the assumptions included in the calculation. In general, the proven reserves refer
to the minimum, the probable reserves as the most likely or intermediate, and the possible or inferred
reserves as the maximum. The Monte Carlo simulation performs the calculation and determines the
estimate based frequency distribution of the random variables, which are dependent on the number of
times a value is extracted from the uncertainty models of the input parameters.

The area and the thickness of the reservoir are usually assigned the triangular distribution because these
parameters are obtained directly from drilling and well measurements. There is a good approximation
of the resource area based on the temperature contours and electrical resistivity measurements; while
drilling depths and indication of permeability and temperature are directly measured from the well. The
deepest wells in Iceland are drilled to 3 km depth and even though the best permeability is found at 1 to
2 km depth good permeability has been encounter down to 2.5 km. There has been good evidence from
wells currently drilled that permeability still exists at depths below 3,400 meters in the Philippines,
(Golla et al, 2006) and down to 4000 meters in Larderello (Capetti and Cepatelli, 2005; Capetti, 2006)
which could justify an addition of 500 meters beyond currently drilling depth range of 2500-3000
meters. The successful drilling in Tanawon located at the southernmost edge of Bacman proves a point
that geothermal resource may really extend within or beyond the fence delineated by a geophysical
anomaly, i.e., Schlumberger resistivity anomaly. The distribution model for these two parameters could
be skewed appropriately depending on one’s knowledge of the area.

Earlier volumetric estimation in the Philippines defined the lateral and vertical resource boundaries on
the basis of the ability of many wells to flow unaided at minimum required temperature of 260°C.
However, recent findings from the country’s maturing geothermal fields indicate that this minimum
temperature limit could be lowered to 240°C. Wells were recently observed to sustain commercial flow
rate at this temperature, after the field had been produced sufficiently to cause boiling and expansion of
two-phase zones in the reservoir. In New Zealand, wells are drilled to intersect temperatures of 180°C
at shallower levels of the reservoir as the fluid has the ability to flow to the surface (Lawless, 2007b).

The porosity is usually assigned a log normal distribution following the observations of Cronquist
(2001) quoting Arps and Roberts (1958) and Kaufmann (1963) giving that, in a given geologic setting,
a log normal distribution is a reasonable approximation to the frequency distribution of field size, i.e.,
to the ultimate recoveries of oil or gas and other geological or engineering parameters like porosity,
Sarmiento et al. 10 Volumetric Resource Assessment

permeability, irreducible water saturation and net pay thickness. The mean and the standard deviation
are however needed to be defined. All other parameters like fluid densities and specific heat are
dependent on temperatures (Table 2).

The correlation between the recovery factor and porosity is shown in Figure 3, while the conversion
efficiency and reservoir temperature correlation is shown in Figure 4.

TABLE 1: Guidelines followed in determining the various parameters for reserves estimation

Parameter Proven Probable Possible/Inferred

Area Defined by drilled wells Defined by wells with temperature Areas include those not
with at least 500 meters contours that would extrapolate to yet drilled but enclosed
beyond the drainage of the 240°C to the edge of the field. by geophysical
outermost wells bounded Acidic or reinjection blocks earlier measurements like
by an extrapolated delineated could be included. Areas Schlumberger/TEM
production temperature of currently inaccessible because of electrical resistivity and
240°C. Enclosed by good limited rig capacity and restriction magneto-telluric surveys.
permeability and imposed within the boundaries of Defined by areas with
demonstrated commercial national parks. thermal surface
production from wells. Areas with wells which could be manifestations, outflow
Acidic blocks excluded enhanced by stimulation like zones, high postulated
until demonstrability for acidizing and hydro-fracturing, by temperatures based on
utilization is achieved. work-over of wells, other treatments geothermometers
or procedures which have been
proven to be successful in the future.
Areas with extensive surface
manifestations where
geothermometers indicate
consistent or constant? temperatures
>250°C.
Thickness Depth between the 180°C Defined by demonstrated Defined by demonstrated
and the maximum drillable productivity in nearby areas or productivity in nearby
depth of the rig that has adjacent wells. Depth beyond the areas or adjacent wells
demonstrated commercial deepest well drilled in the area +500
production. Maximum meters provided projected
depth should have at least temperatures reached at least 240°C
240°C to warrant at the bottom
commercial output of the
well.
Reservoir Taken from direct Extrapolated from temperature Results of geother-
Temperature measurement in gradients and temperature mometers using water,
production wells, distribution across the field or steam and gas from hot
supplemented by enthalpy results of geothermometers using springs and fumaroles.
and chemical water, steam and gas from hot Resistivity anomaly
geothermometers. springs and fumaroles where high resistivity
Reservoir temperature anomaly is seen blow
should be at least 240°C to conductive cap,
allow the well to self indicating chlorite-
discharge epidote alteration at
depth.
Base Similar to the
Temperature abandonment temperature,
usually @ 180°C or at
ambient temperature
Volumetric Resource Assessment 11 Sarmiento et al.

It has been practice to slice the

reservoir into several layers to
capture the variation in
temperature, porosity, permea-
bility and productivity. This full
representation of the various
properties of the entire field
does not make the whole
process more precise than when
treating it as a single block in a
Monte Carlo simulation, and is
not necessary because all of the
values in a given range for every
parameter are inputted in the
calculation.

7. THE MONTE CARLO

SIMULATION SOFTWARE

The reserves estimation is done

using commercial software that
provides for a probabilistic
approach of calculating
uncertainty in the occurrence of
FIGURE 3: Correlation between recovery factor and events or unknown variables.
porosity (After Muffler, 1978) The most common commercial
software are Crystal Ball (2007)
and @Risk which are used in
assessing risks in investment,
pharmaceuticals, petroleum
reserves and mining evaluation.
Monte Carlo simulation can also
be programmed using an Excel
or Lotus spreadsheet but the use
of commercial software allow
the user to take advantage of all
the features required in a
statistical analyses as follows:

 Graphs of input parameters

and output, frequency,
cumulative frequency, linear
plot etc.;
 Statistics: minimum, mean,
median, mode, maximum,
standard deviation and others;
 Sensitivity test.
FIGURE 4: Correlation between thermal conversion
efficiency and reservoir temperatures (From To obtain a good representation
Nathenson, 1975 and Bodvarsson, 1974) of the distribution sampling is
done through 1000 iterations
with continuous calculation.
Sarmiento et al. 12 Volumetric Resource Assessment

7.1 The input cells

The Monte Carlo Simulation program is embedded in MS Excel spreadsheet and, like other programs,
various cells that have links to the main output or target reserves need to be filled-up. A typical
worksheet for volumetric reserves estimation is shown in Table 2.

TABLE 2: Typical worksheet and input parameters for Monte Carlo Simulation

7.2 Output
HENGILL GEOTHERMAL FIELD
3.95
To obtain the required output, the user has to 0.140
specify the targeted input and output to print 0.120
and plot. In reserves estimation, the most
REL. FREQUENCY

0.100
important output of the program is related to
the frequency plot of the thermal energy or its 0.080
equivalent power plant size capacity. 0.060

0.040
The thermal energy or the plant capacity is
0.020
usually plotted using the relative frequency
histogram and the cumulative frequency 0.000
0.4 1.6 2.8 4
distribution. The relative frequency of a value
CAPACITY (MW)
or a group of numbers (intervals or bins) is Values in Thousands
calculated as a fraction or percentage of the 10% 89.4% >
total number of data points (the sum of the 1.0948 3.95
frequencies). The relative frequencies of all
the numbers or bins are then plotted, as in FIGURE 5: Relative frequency plot of the volumetric
Figure 5, to show the relative frequency reserves estimation of the Hengill field
distribution. (after Sarmiento and Bjornsson, 2007)

On the other hand, the cumulative frequency distribution is similar to a probability density function. It
is plotted by cumulating the frequency or adding incrementally the relative frequency of each number
Volumetric Resource Assessment 13 Sarmiento et al.

or bins. Figure 6 is plotted by

cumulating the frequency
distribution from maximum
value of the random variable to
the minimum random variable.
The vertical axis is then
interpreted as representing the
cumulative frequencies greater
than or equal to given values of
the random variable. The same
plot could be represented in a
reverse order, from minimum to
maximum, but the vertical axis
would then be interpreted as the
cumulative frequency equal or
less than the given values of the
random variable. The
cumulative frequency greater FIGURE 6: Illustration of a typical cumulative frequency plot
than or equal to the maximum of the volumetric reserves estimation.
value is always 1 and the
cumulative frequency greater
than or equal the minimum value is always 0. In Figure 6, the probability that the output is greater than
or equal to 1,095 MW is 90 percent (Proven reserves); the probability that the capacity is greater than
or equal to 1,660 MW is 55 percent (Proven + Probable Reserves, Mode or Most Likely); and the
probability that the output is greater than or equal to 2720 MW is 10 percent (Proven + Probable +
Possible or Maximum Reserves). These results imply that the field could initially support a 1,095 MW
power plant for 25 years; possible expansion to 1660 MW will be subject to further delineation drilling
and availability of field performance data. The risk that the field could not sustain 1,095 MW is equal
to or less than 10 percent.

8. CONCLUSION

Geothermal resource assessment is the estimation of the amount of thermal energy that can be extracted
from a geothermal reservoir and used economically for a period of time, usually several decades. The
key elements vital to the successful evaluation of a geothermal resource consist of a thorough review of
the exploration results, well discharge tests and application of the appropriate reserves estimation and
numerical simulation techniques. The size and the quality of the reservoir fluids define the various
options to be followed in planning for full commercial development of the field. The well chemistry
takes special emphasis on scaling potential, acidity, high salinity and gas content of the reservoir.

Several methods have been developed for resource assessment. The methods used vary according to the
availability of data on the reservoir, its inner structure, the natural state and reservoir response to
utilization. Different methods are therefore applied at different stages of the development. At early
stages of geothermal development when available data are limited relatively simple methods are used
assessing the reservoirs but as the more information is gain on the reservoir parameters and experienced
is gain in producing energy from the reservoir sophisticated numerical computer models are used to
simulated the geothermal reservoir in the natural state and the response to utilization which eventually
will determine its generating potential of the reservoir.

The preferred method in reservoir assessment in the early phases of geothermal development is the
volumetric method. The volumetric method refers to the calculation of thermal energy in- the rock and
the fluid which could be extracted based on specified reservoir volume, reservoir temperature, and
reference or final temperature. Through the aid of a computer program using Monte Carlo simulation, a
Sarmiento et al. 14 Volumetric Resource Assessment

probabilistic approach of estimating geothermal reserves becomes less demanding. Some guidelines in
the selection of the various reservoir parameters are needed to have consistency in the estimation. By
this method, the risks associated with overestimating the size of a geothermal field could be quantified.
Moreover, future expansion in the field could be planned in advance while drilling gets underway to
confirm the available reserves.

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