Geothermal Ventures: A Comprehensive Approach to Technical Risk Assessment
Sproule ERCE conducted a thorough geothermal technical due diligence assessment on the geothermal asset portfolio of a leading operator, aiding a private equity firm in its acquisition of a majority stake. Drawing on Sproule ERCE’s extensive operational expertise and deep knowledge of geothermal systems, our team performed a detailed review of the subsurface geology, proposed well designs, reservoir and surface facilities engineering, project execution plans, financial forecasts, and the operator’s overall risk management strategy.
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Project Highlights
- Technical Due Diligence of Geothermal Development
- Financial Outlook Modelling
- Assessment of Risk Mitigation Strategy
- Multicriteria Risk Evaluation
Challenges:
Subsurface Uncertainties: In the realm of geothermal project, the absence local well data, necessitates a careful analysis of subsurface uncertainties. This is critical for accurately determining geothermal resource potential and evaluating proposed design concepts.
Developing Preliminary FEED: Throughout the technical due diligence phase, the subsurface characterization, risk assessment, and Front-End Engineering Design (FEED) of the geothermal project were still in development, requiring careful scrutiny.
Unique Project Design: The proposed geothermal concepts involved an unconventional and opportunistic approach to the well and completion design.
Developing Preliminary FEED: Throughout the technical due diligence phase, the subsurface characterization, risk assessment, and Front-End Engineering Design (FEED) of the geothermal project were still in development, requiring careful scrutiny.
Unique Project Design: The proposed geothermal concepts involved an unconventional and opportunistic approach to the well and completion design.
Solutions:
Assembling Technical Specialists: To effectively address subsurface uncertainties and associated risks, Sproule ERCE assembled a multidisciplinary team of subject matter experts to validate the proposed geothermal potential and concept design.
Leveraging Operational Experience: Given the uncertainties associated with development projects, understanding the operator’s risk mitigation strategy is vital. Sproule ERCE’s operational experience provided the context for a thorough assessment.
Conducting a Multicriteria Risk Evaluation: To clarify the landscape of identified risks, Sproule ERCE implemented a Multicriteria Risk Evaluation, systematically ranking each risk for informed decision-making.
Leveraging Operational Experience: Given the uncertainties associated with development projects, understanding the operator’s risk mitigation strategy is vital. Sproule ERCE’s operational experience provided the context for a thorough assessment.
Conducting a Multicriteria Risk Evaluation: To clarify the landscape of identified risks, Sproule ERCE implemented a Multicriteria Risk Evaluation, systematically ranking each risk for informed decision-making.
Values:
Comprehensive Technical Review: Sproule ERCE delivered a detailed evaluation of uncertainties, advancing FEED studies, and pinpointing key risks, equipping the client with essential insights for their investment.
Contextualizing Risk and Benchmarking KPIs: All identified risks were contextualized within the larger portfolio, complemented by KPI benchmarks, offering the client a comprehensive perspective on the potential investment opportunity.
Portfolio Perspective on Financial Outlook: A thorough analysis of present and future risks was presented, aiding the client in making informed evaluations regarding the geothermal asset portfolio.
Contextualizing Risk and Benchmarking KPIs: All identified risks were contextualized within the larger portfolio, complemented by KPI benchmarks, offering the client a comprehensive perspective on the potential investment opportunity.
Portfolio Perspective on Financial Outlook: A thorough analysis of present and future risks was presented, aiding the client in making informed evaluations regarding the geothermal asset portfolio.