geothermal syndicate

From the quarterly report today:

"Detailed plans were formulated to drill a “proof of concept” deep appraisal well in the first quarter of the 2009 calendar year (January – March 2009). A drilling rig has been identified and this is being pursued through a drilling ‘syndicate’ in conjunction with other geothermal explorers. In addition, we have signed a Memorandum of Understanding with a drilling management consultancy group, regarding well design and drilling management, etc. Moreover, the Company completed and submitted a new application for a $5 million REDI grant from AusIndustry and commenced its search for a joint venture partner for this advanced project."

So, PAX are to become part of the rumoured GEO syndicate? With the most advanced, well-modeled, de-risked and commercially attractive Australian project (excluding the GDY Cooper Basin project), one would imagine that these factors and the cash position would see PAX at the front of the queue for use of the rig in such a syndicate.

The rest of the report is equally interesting. PAX held discussions with the World Bank regarding support for the Kyrgyz project, and subsequently chose to exercise their option over the project. What was discussed in the meeting has not been specified in the report, yet an investor would be left to wonder what support the World Bank may have offered to provide.

It is disappointing to see the wait for the L.C drilling - it had been previously implied that drilling could occur earlier. Thankfully, in the interim, the nature of the project lends itself to a JV partnership, as variables such as temperature, pressure, permeability and porosity are known through previous hydrocarbon drilling (information that would have cost PAX up to ~$40M to generate) and the work of ScopeEnergy ($4M in previous expenditure).

Bring on the JV, before our bulls stagnate.