Geodynamics Cooper Basin Project: Status and forward plan 2010 and - - PowerPoint PPT Presentation

Gerry Grove-White | Geodynamics Limited

Geodynamics Cooper Basin Project:

Status and forward plan 2010 and beyond

Important notice

Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect and these statements speak only as of the date of this presentation. This presentation should not be relied upon as a recommendation to buy or sell shares by Geodynamics Limited. Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in Geodynamics Limited. All references to $ are references to Australian dollars unless otherwise specifically marked. The information in this report that relates to Geothermal Resources is based upon information compiled by Dr Doone Wyborn, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Dr Wyborn is employed by Geodynamics Limited. Dr Wyborn has sufficient experience which is relevant to the style of geothermal play under consideration to qualify as a Competent Person as defined in Edition 1 (2008) of the “Geothermal Reporting Code, 2008”. Dr Wyborn consents to the inclusion in the report of the above information in the form and context in which it appears.

The Geodynamics vision

“Geodynamics will become a world-leading Australian geothermal energy company, supplying competitive zero carbon energy and base-load power”

Reminder of why we are here

• Significant global EGS resource in the

Cooper Basin

• Potential for 10,000 MW of baseload

emission free electricity generation capacity

• Long term goal of sub $100 / MWh power

cost (delivered into grid)

• Size and quality of resource outweighs

any distance concerns Long term goal of the Joint Venture with Origin Energy remains to bring this considerable energy resource to market

Reminder of why we are here

TEMPERATURE IS KING!

• Cooper Basin has hottest known

rocks of its type in the world

• Commercial viability of all renewable

sources will come down to the most efficient use of capital

• Lowest Capex per unit of useful

energy will be most competitive

• Geodynamics believes the Cooper

Basin EGS resource will be the lowest cost renewable source in Australia – delivered sub $100 / MWh

Reminder of why we are here

Recap – Past 12 months

„Proof of Concept‟ achieved

• Culmination of work to date
• Long term closed loop test between

Habanero 1 and 3

• Pumping issues overcome – invaluable

lessons learned

• Independent sign off by world leading

experts

• Important to distinguish between „Proof of

Concept‟ and commercial demonstration

• Dr. Doone Wyborn is giving a detailed paper
• n the process during the technical sessions

Recap – Past 12 months

Wells drilled at Jolokia and Savina

• Confirmation of granite body at ~3,800 m

depth

• Intersected saturated, over-pressured

fractures in granite

• Good temperatures at 4,900 m (J1)
• Progress in validating the geological

model 9 km and 19 km from Habanero

• Assist in reserves delineation

Recap – Past 12 months

Habanero 3 well control incident

• Timing unfortunate
• Successfully controlled
• Professional independent investigation
• Hydrogen embrittlement of steel casing

caused casing to fail

• Absence of complete data meant

wrong grade of steel selected in presence of H2S and CO2 concentrations

• Better to find out now than when 100

wells are operating cont…

Recap – Past 12 months

Implications of Habanero 3 Incident

• Habanero wells secured
• Different grade of steel required for well

casings

• No material impact on well cost from

different material

• Management action plan to improve

planning and QA processes

• Revised work program
• Delay to 1MW Power Plant

commissioning

• GeothermEx confirmation that „Proof of

Concept‟ remains valid despite Habanero 3 Incident

Recap – Past 12 months

Successful REDP Application

• $90 million secured
• Staged payments over project delivery

period

• Strong endorsement in the Company and

the project from the Federal Government

• Objective to deliver 25MW Commercial-

sized Demonstration Plant - minimum size to satisfy lenders

• Will lead to commercial expansion in the

Cooper Basin

Commercial-sized Demonstration Plant

Commercial demonstration plant – concept design

Timeline to Commercialisation

Key Points:

• CDP required to secure financing
• Importance of getting to FID on CDP
• Realistic expectations on rig availability and construction timeframes
• Co-incidence of transmission line commissioning and commercial expansion

Getting to FID on the CDP

Final Investment Decision to build a CDP cannot be taken until Joint Venture parties are comfortable that commercial expansion will / can occur. Need to demonstrate:

• Repeatability of process across tenement / reserves

delineation

• Heat extraction at commercial flow rates greater than

„Proof of Concept‟ tests

• Pathway to long term economics through reduced

costs

• Execution capability

Work program: 18-24 months

Complete Jolokia 1

• Stimulation
• Demonstrate injectivity rates

Drill Jolokia 2

• Stimulation
• Establish connection with J1
• Long term doublet testing

Drill well 1 – second doublet

• Location to be determined
• Fracturing at multiple levels
• Flow test

Drill well 2 – second doublet

• Demonstrate multi-fracture

drilling

• Establish connection
• Undertake flow testing

Geothermal Licences in the Cooper Basin

Technology development / deployment

The following technologies are being developed / deployed over the next 18 to 24 months:

• High temperature logging for prospective fracture zone identification
• Preferential fracturing (controlling where fractures occur) including the

basic science behind fractures and frequency of fractures within the granite

• Down hole isolation
• High temperature elastomers
• Multi fracture drilling
• Drilling technologies such as impact drilling and thermal spalation
• Near field well bore flow enhancement
• Down hole flow control
• Managed pressure and underbalanced drilling
• Well completions and pressure drop reductions
• 2 Phase expanders
• Pump technology
• Heat exchanger design and computer models
• Stibnite management

Thank You

Acknowledgments: Geodynamics wishes to thank our Innamincka Joint Venture Partner, Origin Energy, for their continued support.