This paper investigates the economics of steam production at The Geysers from the point of view of a field developer. We present a cash-flow analysis and the calculation of several profitability criteria for steam supply to a hypothetical 55 MW (gross) power plant starting in 1989. This paper assesses in two parts the economics of developing the steam supply: (1) a deterministic economic analysis to establish the sensitivity of the profitability criteria to steam price where each parameter is given a unique value, and (2) a probabilistic analysis to estimate the profitability criteria, and their sensitivity to steam price, when uncertain parameters are allowed to vary. The results of the study indicate that no new commercial project is economically feasible at The Geysers unless the steam price exceeds 2 cents/kw'hour, because of long payout and extremely low profitability. Only a steam price exceeding 2.7 cents/kw'hour ensures a reasonably short payout time and the minimum profitability typically expected by field developers. Above a steam price of 3 cents/kw'hr, the economics of field development are attractive and risks are low. The accelerated decline in well productivity in recent years has increased risks and reduced profitability.

The technique of completing or recompleting production wells as multiple-legged or "forked" wells has been successfully applied in the Aidlin area of the northwest Geysers field. Wells in the Aidlin area are deeper, hotter and have smaller diameter casings than wells in the southeastern part of the field, where forked wells have been drilled previously. These factors, plus frequently unstable formation conditions at the production casing shoe, add further complications to the forking technique. During 1992-1993, two producing wells at Aidlin were worked over and recompleted as two-legged producers, and one new well was completed with three producing legs. Despite a variety of drilling problems, each of the recompletions resulted in a significant increase in well productivity, with an average increase per well of 58 %. In addition to yielding steam production at a cost that is relatively low compared with drilling new wells, multiple-legged recompletions allow for more flexible scheduling, budgeting and permitting of drilling programs.