Company to lead drilling project with Baker Hughes, New Mexico Tech, and Sandia National Laboratories to advance commercial-scale geothermal power in New Mexico
XGS Energy, a developer of next-generation geothermal power systems, today announced it has been selected by the U.S. Department of Energy (DOE) for federal funding to support the drilling of a deep vertical appraisal well in New Mexico, advancing development of the state’s next-generation geothermal resources. Working with Baker Hughes, New Mexico Tech, and Sandia National Laboratories, XGS will use the project to generate critical subsurface data, reduce development uncertainty, and accelerate its plan to deliver reliable, around-the-clock geothermal power to New Mexico’s grid.
DOE announced the selection as part of more than $99 million in funding to accelerate geothermal energy development across the United States, reflecting strong federal support for geothermal as a source of reliable, around-the-clock power to meet rising electricity demand. With this funding, XGS will advance a system that generates geothermal power without consuming water, removing a key constraint on development in New Mexico, where heat is abundant and water is scarce.
'New Mexico sits on a substantial and exciting geothermal resource, and we’re grateful to the Department of Energy for investing in the subsurface data needed to transform our nation’s abundant geothermal resources into affordable, reliable American energy,' said Lucy Darago, Chief Commercial Officer of XGS Energy. 'This selection positions XGS to advance our understanding of these resources, and we are glad to deliver this project alongside public- and private-sector partners who have spent decades advancing New Mexico's innovation and industry ecosystem.'
Through this DOE-supported project, XGS will drill a deep vertical appraisal well to acquire downhole temperature, logging, core, and continuous drilling data that will inform the next phase of commercial geothermal development in New Mexico. The data will help XGS refine its understanding of the subsurface, optimize future well and project designs, and reduce uncertainty earlier in the development lifecycle.
'We look forward to drilling this important appraisal well,' said Al Vickers, Chief Operating Officer of XGS Energy. 'The geological and operational data we collect in New Mexico will tighten our thermal and geologic models, inform how we design and construct wells across the region, and, in doing so, help us take another important step toward unlocking geothermal resources at scale in New Mexico.'
XGS has assembled an integrated team with Baker Hughes, New Mexico Tech, and Sandia National Laboratories, combining drilling, formation evaluation, subsurface characterization, data management, and workforce development expertise to support a more efficient path from appraisal to scalable power generation. By linking subsurface insight with surface and enterprise-level project planning, the effort is designed to help XGS bring reliable geothermal electrons to the grid faster and with greater certainty.
'Scaling next-generation geothermal starts with a clear understanding of the resource and the confidence to turn that insight into a deliverable project,' said Ahmed Eldemerdash, Vice President, Climate Technology Solutions at Baker Hughes. 'This selection gives XGS Energy and Baker Hughes an opportunity to build on our existing collaboration in New Mexico, leveraging subsurface, surface, and industrial expertise to generate the data needed for the next stage of development. Together, we’re working to bring reliable, always-on geothermal energy to market faster, with greater certainty, at scale.'
'The New Mexico Bureau of Geology and Mineral Resources (NMBGMR), the state’s geological survey and research division of New Mexico Tech, is looking forward to supporting XGS in this project,' said Dr. Pooja Sheevam, Geothermal Research Associate at NMBGMR. 'Our partnership draws on decades of regional geological and geothermal expertise and utilizes existing robust infrastructure and facilities to help with data and sample management.'
Dr. Shari Kelley, Senior Research Scientist at NMBGMR, added, 'New Mexico Tech is uniquely positioned to utilize its considerable knowledge of the state’s geologic, hydrologic, and energy systems to develop a skilled local workforce. This project gives us a real-world view of the skills that geothermal development demands, and we'll use that insight to shape our geothermal certificate program and future training across New Mexico, while working with XGS to keep local communities informed and engaged.'
'Sandia has decades of drilling expertise, learning how to optimize drill bit performance, drive down costs, and improve drilling efficiency,' said Sandia geothermal researcher Melanie Schneider. 'By turning complex geological challenges into actionable solutions, this partnership advances affordable, reliable geothermal energy to power New Mexico and the nation.'
Read the U.S. Department of Energy’s complete list of projects totaling $99 million to advance U.S. geothermal energy development.
Selection for award negotiations is not a commitment by DOE to issue an award or provide funding. Before funding is issued, DOE and the applicants will undergo a negotiation process, and DOE may cancel negotiations and rescind the selection for any reason during that time.
About XGS Energy
XGS Energy is a next-generation geothermal developer that delivers clean, around-the-clock power anywhere there is hot rock. The XGS system decouples geothermal energy production from its historical dependence on natural water resources and geological conditions, unlocking low-risk power project development, geographic flexibility, easier permitting, and faster deployment. With deep partnerships across power development and oil and gas, XGS is positioned to meet surging demand from utilities, industrial operators, AI hyperscalers, and an increasingly electrified economy. For more information, visit www.xgsenergy.com.
Source: XGS Energy
