BUSINESS JOURNAL EVENT

2008 Health Care Conference: Frontiers of Health Care

Wednesday, November 12, 2008, 8:00 a.m. - 11:30 a.m., Hyatt Vineyard Creek Hotel & Spa, Santa Rosa

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ThermaSource growth accelerates

GEOTHERMAL DRILLER RECEIVES $40 MILLION, TO REACH 420 EMPLOYEES

SANTA ROSA – ThermaSource LLC, the three-man geothermal consultancy that grew to a 200-employee drilling company within the last year and a half, is on the move again.

With a new infusion of $40 million from its partners and investors, the company is expanding its fleet of rigs as fast as they can be bought. It is now the largest geothermal drilling outfit in the world and one of the fastest-growing private companies in Northern California.

By the year end it’s projected to more than double in size to 420 employees. “We expect to be a significant force in the exploration and drilling of geothermal wells globally,” said Louis Capuano Jr., ThermaSource president and CEO.

Geothermal technology hasn’t been in such high demand since the gas crisis of the early 1970s. But that period of high prices and shortages, caused by OPEC’s embargo of oil, ended when political maneuvering persuaded the Arab emirates to lift the embargo.

No such solution is in the offing for today’s spike in oil prices, caused by soaring global demand for a finite resource.

Now utilities and gas and oil companies are scrambling to add clean and renewable energy sources to their portfolios, and exploratory drilling is in high demand.

ThermaSource grew its fleet of drilling rigs – costing $1.5 million to $15 million each – to 10 and is buying more, said Mr. Capuano. The company has coring rigs that can go down 6,000 feet, bigger rigs that can drill to 12,000 feet and a couple of 2,000-horse power big rigs that can go up to 20,000 feet below the earth’s surface.

One of those rigs, in a convoy of 52 flatbed trucks, is on its way to the Bottle Rock plant at the Geysers in Lake County. ThermaSource intends to drill five to six 10,000-foot wells a year there, each generating four to five megawatts of energy, or enough to power 5,000 homes.

ThemaSource expects to be at the Geysers for the long term, saying that once drilling is completed at Bottle Rock, it will move on to projects on the 2,700-acre Binkley Lease. That parcel includes 470 acres of public land where drilling leases recently were awarded by auction for an historic high of $14,000 per acre.

ThermaSource has another rig at the Western GeoPower plant at the Geysers, two near the Salton Sea, one near China Lake on the high desert, one – soon to be two – in Nevada and one in the Caribbean.

New drilling contracts are being pursued and negotiated in the Philippines, Nicaragua, Chile, Peru, Baja Mexico, Panama, Iceland and additional Caribbean islands.

“The steam fields in the Caribbean look especially promising,” said Mr. Capuano.

Geothermal fields are found where deep rock fissures allow heat from the earth’s core to rise toward the surface. Harnessing that energy requires water – superheated and captured in steam.

During the 1990s, drilling at the Geysers caused wells to lose pressure, and geologists determined that the underground water source, an ancient lake, was being depleted faster than rain water could penetrate the rock to replenish it. Since then geothermal engineers have turned to enhancement and replenishment technologies, including the injection of waste water, pioneered by Lake County and Santa Rosa.

There are many places worldwide where hot, dry rock could be turned into steam fields by injection or by increasing permeability to rainwater by creating fractures.

“The heat is sustainable, but we’ve got to strike a balance between what we pump out and what goes in,” said Mr. Capuano. “On the Lake County side of the Geysers, declines have tapered down to zero.”

ThermaSource recently acquired EGS Inc. of Santa Rosa, whose founder Paul Brophy is an expert in volcanology and geophysics, to aid in the analysis of heat and fluid migration paths as well as expedite the permitting process, which can be lengthy.

For more information, visit www

.thermasource.com.