Sage Geosystems Secures Financing for Hybrid Geothermal Field Pilot

A $3-million investment by a climate fund founded by TED curator Chris Anderson and an additional $2-million investment by a subsidiary of Helmerich & Payne will fund a hybrid CLG/EGS demonstration well in Texas. Drilling could begin this summer.

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Source: Sage Geosystems

Sage Geosystems (Sage), a Houston-based firm focused on hot-dry-rock geothermal energy development, has received funding for a Phase 1 demonstration well using its HeatRoots technology. Sage plans to begin drilling the well, which will be located in the south Texas/Gulf Coast corridor, as early as this summer.

The project represents an unprecedented partnership between geothermal development, the oil and gas industry, and climate venture funding—with an indirect tie to tech and media. Sage CEO and cofounder Lev Ring is a former executive and global head of research and development with Weatherford. Fellow Sage cofounder and chief technology officer Lance Cook was previously a chief scientist with Shell. A portion of the cash investment and a credit for drilling services come from international drilling contractor Helmerich & Payne. A $3-million investment comes from Virya LLC (Virya), a climate fund founded by TED curator and British media entrepreneur Chris Anderson.

Anderson’s vision took TED from a one-off conference about technology, entertainment, and design to a viral video phenomenon and worldwide community of passionate people. He will now join Sage’s board of directors.

The potential pivot to clean geothermal energy by major hydrocarbon industry entities caught the eye of Anderson, Sage’s lead investor. “Our clean energy future needs reliable baseload power, and so it’s thrilling to see the prospects for geothermal energy improving by the day. The skills and resources of the oil and gas industry can play an absolutely crucial role here,” Anderson said. “There’s potential for an industry often regarded as part of the problem to pivot and to use its drilling and fracking capabilities to unlock vast quantities of zero-carbon energy. That’s why Sage is so exciting to us. This is a space that both climate activists and oil industry executives worried about the long-term future of their businesses can follow with great hope,” he added.

The Sage team believes that globally scalable geothermal energy is the natural future of the oil and gas industry and intends to help pave the way for the industry to pivot into the space.

“If you think about how vast the oil and gas industry is globally and what would happen if the industry engaged at scale in geothermal energy development, we could be developing a terawatt or more of geothermal energy each year,” said Cook.

A Novel, Hybrid Approach

The Sage approach to geothermal development is novel in both its initial candidate selections and its well construction process. The company’s pilot project will involve retrofitting old, plugged and abandoned wells and combining open-to-reservoir enhanced geothermal system (EGS) and closed-loop geothermal (CLG) technologies.

The process begins with drilling a well to approximately 4 to 6 km total depth. It then uses HeatRoot technology to propagate fractures downward, reaching at least several hundred more feet in depth and with it, much higher temperatures than the bottomhole temperature of the original well. The fractures are filled with a highly conductive slurry that is also convective. Then a pipe-in-pipe closed-loop heat exchange system with a supercritical circulation fluid is placed in contact with the HeatRoot network.

“Geothermal is a ubiquitous and truly huge global clean-energy source, firmly within the core competency of the oil and gas industry,” said Ring. “We intend to quickly de-risk a novel approach to heat harvesting in hot sedimentary basins, unlocking terawatts of potential globally.

“We need to move quickly,” he continued. “Working in sedimentary rocks will help that. We are using old wells to calibrate our models and keep costs down in preparation for our first greenfield well, which will be a 10–100MW project, depending on our partner.”

“Think of the HeatRoot system like tree roots reaching downward from the well that suck up heat from the depths and deliver it to the wellbore,” said Cook. You’ve got heat resources that would have required a well twice as deep to access, by growing some roots to feed your heat exchanger.”

Better the Second Time Around

Sage, which was founded in July 2020, has experienced a series of fast successes, including having its models validated by an international oil company, being awarded the US Department of Energy (DOE) American-Made Geothermal Prize for using additive manufacturing to make a helical downbore heat exchanger, and being selected to advance in the DOE million-dollar, multiphase Geothermal Prize Competition for geothermal innovation.

Ring and Cook had worked on geothermal technologies from within the oil and gas industry in the early 2000s, only to be disappointed when the concept failed to launch as the shale boom took off.

“Geothermal’s time has come. We are looking at the potential for exponential growth like the shale boom, but this time it’s clean energy,” said Ring.

The team credits the Geothermal Entrepreneurship Organization (GEO) at The University of Texas at Austin for reigniting their excitement for geothermal and for lighting a fire under the oil and gas industry at large to engage.

“Industry is buzzing about this right now in a big way. Every major entity has newly formed but quiet efforts in geothermal, and I expect this to snowball as entities begin to make their efforts public over the coming months,” said Cook. “H&P [Helmerich & Payne] is really getting out and leading the way here with their engagement.”