This paper documents our progress developing an ultrasound phased array system in combination with a model-based iterative reconstruction (MBIR) algorithm to inspect the health of and characterize the composition of the near-wellbore region for geothermal reservoirs. The main goal for this system is to provide a near-wellbore in-situ characterization capability that will significantly improve wellbore integrity evaluation and near well-bore fracture network mapping. A more detailed image of the fracture network near the wellbore in particular will enable the selection of optimal locations for stimulation along the wellbore, provide critical data that can be used to improve stimulation design, and provide a means for measuring evolution of the fracture network to support long term management of reservoir operations. Development of such a measurement capability supports current hydrothermal operations as well as the successful demonstration of Engineered Geothermal Systems (EGS). The paper will include the design of the phased array system, the performance specifications, and characterization methodology. In addition, we will describe the MBIR forward model derived for the phased array system and the propagation of compressional waves through a pseudo-homogenous medium.