weekly report, page-3

is out with mixed news! Possibly why SP has been weak today.

Geodynamics is pleased to announce that since the last update the following well completion activities have been undertaken:
• Wireline logging successfully completed across the main reservoir
including imaging of the borehole wall; and
• A slotted steel liner has been successfully inserted into the bottom open hole section of the well which is designed to maintain well integrity.

Geodynamics advises that the fracture zone is clearly visible in the image log – the first time that this has been achieved. This has provided for better idefinition of the fracture model required for establishing the longevity of the circulation system.

A temporary suspension plug that was placed in the well to enable installation of the surface valves has failed to set correctly and operations to recover it using drill pipe are underway. While this was an unplanned event,
contingency plans were in place and it is expected to be a routine recovery operation, unfortunately delaying completion by around a week.

Following the well completion, the company will immediately move forward with preparing for the open circulation testing between Habanero 1 and 3. A
successful test will mark the “proof of concept” and completion of Stage One of the Company’s business plan.
Upon completion of Habanero 3, the rig will be dismantled, moved to Jolokia 1 and rigged up. A number of planned maintenance activities will be conducted prior to spudding and combined with the rig move are scheduled to take three
weeks.

The open circulation test which will release steam at the surface will demonstrate the impedance (or resistance) of the circulating loop between Habanero 1 injection well and Habanero 3 production well. This will be completed near the end of February.