The document discusses the risks and strategies used in the development of the privately funded Mindoro Geothermal Project in the Philippines. Key strategies to de-risk the project included obtaining a power purchase agreement, improving subsurface surveys using techniques like MT and TEM, obtaining commercial drilling insurance, and drilling deep slim holes to better understand the resource prior to production wells. These strategies helped confirm a measured resource of 40MW and secure $50 million in equity funding to develop the field using modular well-head turbines.

1. De-risking Geothermal Development
Mindoro Geothermal Project
Dr. Antonie de Wilde
Chief Technical Officer
Emerging Power Inc.

2. Location Map of
Montelago
Geothermal Project

3. The Odds
• First and only Private Sector
developed green field in
Philippines
• No subsidies (Other than RE
2008 (No import tax, no VAT)
• No Feed-in-Tariff
• No previous drilling by PNOC
• First large-scale medium
enthalpy field (potential 40 MW)
• Field located in Protected Area

4. Development Partners
2013 -2017
2012
Review of earlier data (including CSMT) and
Medium – Enthalpy none volcanic experience
FEDS2010 -2012
Preliminary reports PNOC-EDC 1989 – 2001
CSMT survey.
Structural Geology, Gravity, Magnetics, Geo-chemical,
Conceptual Model and 3D Conceptual reservoir model
2013 -2016
MT, TEM, 1D and 3D Resistivity
Models, Well targeting, Drilling
supervision (including borehole
lithology, etc.)

5. POWER SERVICE AGREEMENT

6. Recovering Exploration Cost
• Get Power Purchase
Agreement to supply
electricity! (with a tariff
based on capital cost and
O&M cost)
• If no geothermal, EPI can
recover the exploration cost
by running a power plant.
• The impact of US$12 -14
million over a 15 year PPA is
reduction of 1.0% IRR.
What if after subsurface
surveys, (US$1.5 – 2.0 m) and
drilling 2 exploration wells
(US$ 12 m), there is no viable
geothermal resource?
Get A PSA= PPA for
20 MW HFO (Diesel)
+
40 MW Geothermal

7. IMPROVE SURFACE AND SUB-
SURFACE SURVEYS

8. Surface Surveys
TDEM-MT-Gravity-Magnetics
MT (Magneto Telluric)

9. COMMERCIAL DRILLING
EXPLORATION INSURANCE

10. Drilling and Exploration risk
• MARSH and RE
Munich offered
Commercial Risk
Insurance (Dec 2012
– 2013)
• Insurance premium =
10%
• Pay-out, only 80% of
insured premium
• Example: 2 wells,
insured for $12
million -> premium
US$ 1.2 million
• Pay-out= US$ 8.4
million

16. EXAMPLE CONCEPT OF COMMERCIAL DRILLING INSURANCE
Example:
Cost for 2 Prod. Wells + 1
RIW and Infrastructure
US$ 20 million
Underwritten by Insurance
Premium paid by Investor
Premium 8 – 10%
(example US$2 million)
Successful : delivers 2*5 MW
If unsuccessful repaid 80% of
insured costs
Pays 80% of insured cost if
not successful
80% of US$ 20 Million =
US$16 million
Risk Reduction
Equity Risk: US$20 million Equity Risk: US$6 million
premium $2 million +
20% loss $4 million

17. DEEP SMALL HOLE DRILLING

18. Drill 2 deep small holes
(at less than the cost of insurance premium)

19. PQ Phase (4 meters to 150-170 meters)
HQ Phase (150-170 meters to 500-700 m)
NQ Phase (700 meters to 1,500 meters)
Core drilling US$ 1.2 to 1.5
million for 2 holes of 1250
meter. < than insurance
premium

20. Risk Reduction using Small Deep Holes
• Cost of insurance premium US$1.2 – 1.5 million
• Cost of drilling small deep hole with coring rig < US$
1,5 million
• Drilling 2 holes makes assessment of reservoir possible
• If the wells flow, can use for production (.75 – 1.2 MW)
-> reduce cost for water pumping during production
well drilling
• From financing perspective using Australian code, the
reservoir moves from “measured reservoir” to
“productive reservoir”
• Lithology for production drilling known: faster
production drilling (reduce production drilling 4 -5 days

21. First deep small holes in Philippines
many have followed (12)
From: "Rimando, Philip M." <pmrimando@phinma.com.ph>
Date: March 11, 2015 at 12:13:54 PM GMT+8
To: Antonie De Wilde <adewilde@emergingpowerinc.com>
Cc: Meg Ledesma-Honrado <mlhonrado@basicenergy.ph>, "Buena, Sheryl L."
<slbuena@phinma.com.ph>
Subject: Thanks for the Meeting
……………………
You have also treaded on a realm that other geothermal
explorationists in the Philippines have not dared to go before – that is,
drilling slimholes to probe a geothermal resource. That’s a bold step if
I may say so and it goes against conventional wisdom in the Philippine
setting. It is also a pioneering venture that hopefully would open up
the mindset of other players in the local industry………
Philip M. Rimando
Trans-Asia Oil & Energy Dev’t Corp.

22. “MEASURED RESOURCE”

24. We are pleased by the success of our exploration drilling work in Naujan,” EPI
Chairman Antonio G. Zamora said in the statement.
“It shows we have the geothermal resources needed to produce close to our
target of 40 MW power,” he added.
Mr. Zamora said QED worked with geothermal consultants Iceland Geosurvey
(ISOR) and the Magister Geothermal Program of the Institute Teknologi
Bandung for the exploratory activity.
Antonie de Wilde, EPI chief technical officer, said based on “flow testing
obtained during the last days, we are very pleased to confirm that our earlier
assessment of a reservoir with the capacity to generate a minimum of 35 to 40
MW, is now confirmed with actual measured data.”

25. NAC = P446 + P474 =P920 = US$ 22 million
Dragon Capital = US$ 7 million
FMO= US$ 7 million
Gutierez= US$ 14 million
Total Equity = US$50
million

26. WELL-HEAD TURBINES

27. Large Turbines vs. Well head Turbines
Large Turbine
• 10 to 15% more efficient
• More risk as reservoir needs
to be drilled fully
• 3 – 5 years drilling and
construction, without cash
flow.
Well-head turbine
• 10 – 15% less efficient
• Can develop on well to well
or well pad to well pad
basis. (modular)
• Produce cash flow within 14
to 16 month.
• Requires significant less
equity than large field (Drill
one well and 1 re-injection)

28. Large vs. Well Head Turbines
• 15% efficiency loss is 15% of free steam/brine
• Increase in cash flow already covers a large
part of the inefficiency.
• Lesson learnt
• Volumetric Assessment or P90 for only one
well not possible in Philippines (or Indonesia)
– It is done in Netherlands, Govt. guarantee
program based on capacity of duplet. Due to
detailed mapping of Underground, where every
well (gas, oil, water) is mapped.

29. - Thank You!
Terima Kasih
adewilde@emergingpowerinc.com
Antonie de Wilde