april commissioning of habanero-4, page-13

Getting the 1 MW plant to operate should be simplicity itself. We have known about steam engines for 150 years. It is only the source of the heat that is a little different. If the cementing of the well casing was successful this time we are home and hosed as the plant and plumbing was ready four years ago. Circulation was proved.

The only real value of the 1MW plant is PR. But PR for whom? Yes, new small investors will be impressed and the share price will rise. Media will comment approvingly and make comparisons with solar, etc. However, the PR that we are striving for would be to impress the industry peer groups, the commercial power generators and thereafter the finance providers. 1 MW is still only a toy in their eyes.

GDY has only $27M left in the bank after selling off its two drilling rigs, which is not enough to drill one other serious well. Yes, they can tap into their REDP grant which will certainly help, but considerable investigative work is needed to produce a multi level underground heat exchanger between HAB 4 and HAB 5. It is only then that sufficient flows can be expected from a commercial well pair.

It is only after success in that endeavour that commercial funding might be expected. From where should funding come in the meantime? This is bit of a worry as most of the older shareholders have exited after losing their money and Origin remains very unenthusiastic.

Juke