U.S. Department of Energy - Energy Efficiency and Renewable Energy

Geothermal Technologies Office

Odessa fabricator builds rig specifically for geothermal drilling

August 3, 2008

For 35 years, MD Cowan has built drilling rigs, developing a market for its Super Single® rig for use in the nation's oil and gas fields. Now the Odessa-based company is branching out into alternative energy. The company recently delivered its first Thermal Single® rig, a variation of its Super Single® rig, designed specifically for geothermal drilling."It has given us another model to offer," said Scott Milliren, MD Cowan's president, by phone from Arkansas, where he was on a business trip, adding that a second rig is currently under construction.

The company has also just landed another big order that should be announced in coming weeks, he said.Milliren credits the geothermal deal to "a good customer relationship and good dialogue with the customer." MD Cowan has worked with the company, ThermaSource LLC of Santa Rosa, Calif., in the past and noted that ThermaSource's executive vice president of operations, Jim Hanson, is originally from Odessa. Working together, the companies devised the Thermal Single rig for geothermal drilling."

His company liked the Super Single but had some specific requirements for geothermal drilling," Milliren said.Milliren cited several examples of variations made to the rig:- The mast has been extended and converted from one piece to two pieces- The rig floor now telescopes from the standard 14 foot to 22 foot- The trailer mount has been eliminated in favor of a skid mount- The mast now travels on a ramp. The floor is higher, explained Hanson, because of the temperatures involved in geothermal drilling. "

We have to run more BOP equipment because of the thermal temperatures. As we drill through the reservoir, everything rises. We also made some modifications for handling the equipment. We can now run 20-inch casing to seven-inch casing. It's drilling, but with a different flavor." Hanson noted that MD Cowan had built its Rig 102, one of nine it owns -- it operates two more for other companies -- that has been in operation for over a year. At the end of the year, the company hopes to have 13 rigs, rising to 18 rigs by the end of next year."

We bought it and refurbished it and Cowan assisted in that refurbishment," Hanson said.The new rig, Rig 105, is in ThermaSource's yard waiting on a contract, he said, and Cowan is currently building a second, Rig 109 and construction of a third, Rig 110, should begin in September.

Hanson has over 30 years experience in geothermal energy. After earning his degree from the University of Texas of the Permian Basin, Hanson said he went to work for an oil tool service company that sent him to California. There he headed up Grant Oil Tools' geothermal operations until the company was sold to Smith International. He has been with ThermaSource 12 years and has seen it grow from a staff of three in 2006 to 230 today. The goal is to employ 450 by the first quarter of 2009, he said.

According to Hanson, ThermaSource is a geothermal engineering and drilling company that also has cementing, mud and geological operations."We can be a one-stop geothermal energy company or provide engineering design, project management or other services," Hanson said. The company is active in California, Nevada, Utah, Idaho, in the Caribbean and is looking at projects in Chile, Panama and Peru as well as looking to enter Australia and New Zealand. While the company is not active in Texas, Hanson said the Lone Star State is on ThermaSource's radar.

Texas, he explained, is looking more at geopressure projects. Hanson's company is cooperating with Sandia National Laboratory on projects. "In Texas, there are a number of areas, particularly in East Texas, with high temperatures." He continued, "What's pushing geothermal energy is that it's a renewable energy that works 24-seven. Wind and solar are peak energy whereas we're base energy."

Milliren said his company has already taken its experience adapting the Super Single rig and applied it to adapting the rig yet again."We've taken that experience and applied it to another customer from Pennsylvania who is active in the Marcellus Shale play," Milliren said. "We've sold four rigs there." The company also has rigs working in the Fayetteville Shale play in Arkansas and in the Barnett Shale around Fort Worth, he said. "Each area has unique design requirements and we've been able to take variants from our core design."

Being a fabricator, Milliren said the challenge has not been finding materials but in building the initial model of each variation on the Super Single.Since the company went into business, Milliren said it has sold 30 rigs and has another 14 sold "from this point forward. There has been a significant up tick in business."That's good for MD Cowan but also for other business, he pointed out. "We utilize -- 80 percent of our subcomponents come from West Texas businesses. We support not only our company but other local companies."

By Mella McEwen, Copyright © 2008 - Midland Reporter-Telegram