South Australian Geothermal companies - all Cooper Basin assets Hot Rocks
Green Rock Energy
GRK has 2500 km2 of land round Olympic Dam. It has 1 well to 2000 metres which had a bottom of hole temp of 90 C. The well is 8km from the grid power line. It has cash in the bank and a mkt cap of $13M. Working with BHPB and CSIRO on mini fracture stimulation. Currently no grants , nor a major partner on the OD project. Hungarian assets are ok and expenditure will be refunded by world bank.
Petratherm has 2 wells one deep to 3klm and extraploating the gradiants will have temps +200 between 3600m and 4000m. More wells planned. has received a gov grant ($5M) and has Beech Petroleum spending $20M as a farm-in partner. About 500 klm from the grid but a pilot plant 4MW could supply juice to Beverly U mine nearby. Mkt cap $40M No geothermal resource yet
Geothermal Resources (listed last year at20c now $1.46 - a spin off out of Havilah) has land near Lake Frome near Petratherms Paralana system. good land holding and drilling 8 wells to 500 metres to ascertain temperature gradiants. Long way from grid power. Cash $2.8 and rec'd a govt grant last year. Mkt Cap $48M No deep wells and starting out.
Geodynamics By far the leader in the country. Has been at it for years. Has drilled 2 deep wells and established a heat exchanger downstairs. Recently raised significant capital and bought a $30M+ rig to get the holes done. Claims a 300,000 PJ resource and website claims that Australia's total oil and gas PJ's are 140,000. Has 2000km2 of land in SA. Clearly the most likely to get a power plant up before anyone else in the industry. Mkt Cap $175M. Has Woodside and Santos as major shareholders.
The point is that GRK in my mind is fundamentally cheap. The factors that I think will trigger a re-rating on the company are most likely the following
. The successful mini-fracture stimulation of the granites commencing July 2007 . The further confirmation of temperature gradients of the granites in conjunction with BHPB . A possible Government grant for development . The introduction of a major partner to farm-in to the project . Advancement of geothermal projects with the Hungarian partner MOL . Industry success by Geodynamics will lift the whole arena as it will show that this sector can be a viable clean energy producer.
One of the key points is access to market. Proximity to the grid. I am told that power lines cost $400k/ klm.
The other area in Australia for Hot Rocks (apart from the Cooper Basin) is the Hunter Valley.
Have a read through the websites of the companies above to verify the info. I had a spare hour this morning and went through the quarterly reports to get a handle of where things are going in South Oz in the sector. By my reading, the sector is cheap( IF GDY has twice the energy in it's rocks as the rest of oz has in oil/gas it makes coal seem methane a complete joke and blows the U bubble completely out of the water.) It won't happen tomorrow but it will happen over the next few years. There are 140+ geothermal power plants of varying size round the world. It's not brain surgery.
And GRK is the cheapest of the lot and represents the best leverage. cheers omg
GRK Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
