gdy 105 million jv origin energy, page-31

So, just to recap, as I am sure there are many who are just coming to assess the sector for the first time. Long-termers feel free to tune out....

- Renewables targets to be set by Libs at 15% and Lab at 20%.

- Increasing media focus on the impact of CO2 emissions and the need for alternative power supply.

- The cheapest way to meet renewable targets is high-grade geothermal projects (cheaper than nuclear, wind, hydro, clean coal and solar).

- These geothermal projects are baseload, emission-free and have an economic life to be measured in hundreds of years.

- GDY have Australia's highest quality geothermal project, and will produce over 100% more electricity per dollar invested than the nearest competitors (UROs Limestone Coast conventional project, GRKs Olympic Dam HDR project, and PTRs Paralana HEWI project).

- To further improve electrical output, GDY have exclusive access to the Kalina Cycle, which improves extraction efficiency by up to a further 30%.

- GDY will target temperatures of 300C @ 5000m, have the largest HFR reservoir in the world (at 11 000 000 cubic metres), and have enormous flow rates of up to 20kg/sec confirmed in the first two non-commercial wells.

- When infrastructure costs are factored in (500km of transmission lines), GDY will be by far the most profitable geothermal energy company operating in Australia, producing electricity for an estimated $45-$50/MWh.

- An initial customer for GDY will be Olympic Dam, where proposed expansions will require huge power supply increases.

- GDY recently purchased the Lightning Rig, the most advanced onshore rig in Australia, and have used it to drill 2968m of the 4300m Habanero 3 well.

- Recent delays, caused by non-systemic operational errors, have resulted in drilling suspension as the equipment is checked. An update on proceedings is expected to be released tomorrow.

- When target depth is reached, GDY will be able to commence flow testing, and prove a concept that has the potential to supply a large percentage of Australian demand. GDY have just over 1300m to drill before the main heat exchange zone is intersected and flow is demonstrated.



There are other variables aligning in GDYs favour, but the points listed above outline the main factors that indicate GDY will dominate the geothermal sector now and in the future. As covered earlier in the thread, Origin see a huge, profitable future ahead for high-grade geothermal energy.

Great times to take a position in GDY as it moves from explorer to producer, becoming a media darling and a high-return investment. The new MD, Mr Gerry Grove-White, will oversee the transition, and the connection to the NEM. With small ongoing opex costs, GDY has the ideal business model for eventual high dividend yields, as the initial capex is paid off.