Progress in the development of a cost-effective exploration program for low- to moderate-temperature geothermal resources is reported. As part of this program two or three demonstration projects in Arizona will be brought on stream. The site-specific exploration, evaluation and development program as well as the state wide reconnaissance exploration program is continuing. The compilation of data for a geothermal energy resource map of Arizona has commenced. Geological field work was directed towards obtaining a broad overview of Arizona geology and regional reconnaissance in the Springerville - St. Johns area. All outside projects are on schedule and the Landsat lineament map and report have been completed