Wet geothermal formations or reservoirs are of great current interest as a new energy source. Such formations have the potential for large quantities of energy at temperatures of interest for power production and other uses. In these reservoirs the ground water usually contains dissolved solids in such high concentration as to pose a serious disposal problem. For this reason and also to maintain the water table, in most cases, the water will be reinjected into the reservoir after the useful energy has been extracted. Efficient utilization of the potential of a given reservoir requires optimum location of costly producing and reinjection wells. Selection of well location must be based upon an understanding of the heat and mass flows within the reservoir. In this paper, we present some general considerations for physical modeling as well as the results obtained from a laboratory model having two wells to simulate a geothermal energy extraction loop.