ASX ANNOUNCEMENT 24 SEPTEMBER 2008Cooper Basin Project...

ASX ANNOUNCEMENT 24 SEPTEMBER 2008
Cooper Basin Project Update
Purchase of Second Heavy Duty Drilling Rig
Geodynamics is pleased to announce that a contract for the construction and supply
of a second heavy duty drilling rig has been signed with National Oilwell Varco
(NOV); a worldwide leader in the design, manufacture and sale of oil and gas drilling
systems and components.
This follows an extensive competitive international bidding process, based on a
detailed technical and functional specification. The new rig will form part of the
assets of the Geodynamics/Origin Energy Joint Venture, and will be devoted to the
development of the Cooper Basin geothermal tenements.
The NOV rig pictured is similar to the newly contracted 2000 HP A.C., 15,000 PSI
high pressure, high temperature deep geothermal drilling rig that Geodynamics has
contracted to be built in Edmonton, Canada. The Rig will cost USD$38.3 million or
AUD$45.4 million and the timeframe for construction, rig up and commissioning in
Canada is 22 months.
This new rig will have the capacity to drill to 6,000 metres, manage higher wellhead
pressures. It incorporates heavy duty rig hydraulics, along with a number of other
features that make it better suited to the drilling of geothermal wells.
This new rig, along with the existing Le Tourneau Lightning 100 rig provides the
drilling resource capacity required for the proposed 50MW power station.
Jolokia 1 completed to 4,911m
Geodynamics is pleased to advise that Jolokia 1 has been successfully completed to
a depth of 4,911m, with the rig being released on 21 September 2008. Whilst just
short of the targeted depth of 5,000 metres, the company took advantage of a bit
change to proceed with planned temperature and structural logging of the well using
“state of the art” logging equipment especially brought into the country from the Gulf
of Mexico. The results of this logging analysis will provide the company with valuable
temperature and fracture information.
Rig 100 will be mobilised to the Savina 1 site in the coming month. Savina 1 is
located approximately 10km WSW of Jolokia 1 and 19km W of Habanero 3.
Whilst only accessing one flowing fracture 100m below the top of the granite in
Jolokia 1, there were many instances of drill gas peaks and abnormal bit behaviour
(known as drilling breaks) whilst drilling in the granite. These instances are
analogous to those observed at Habanero 1, prior to stimulation and ultimate fracture
flow.
Jolokia 1 will remain suspended for approximately 6 months while drilling Savina 1,
after which Rig 100 will return to the Jolokia site. At that time the company expects to
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undertake further evaluation of the well and implement a technical solution to allow
multi fracture stimulation. This technical solution is being developed with the
assistance of many parties including our JV partner Origin Energy.
Closed Loop Flow Test Update
Since the last update, the circulation pump supplier, Schlumberger, have engaged
their global technical research and development organisation who are working
towards having the pump upgraded and returned to service in 8 weeks. This
program of works and timeframe has increased from the originally stated 3 weeks
following detailed engineering investigations into the unique operating conditions
encountered during the initial operations. Schlumberger have committed to providing
a product of the highest possible quality and working together with Geodynamics to
meet our goals.
During these initial test programs, all parts of the geothermal operating system are
rigorously tested and refined to enable reliable operations during the commercial
phase.
Geodynamics is working with Schlumberger to expedite the delivery schedule and
assures shareholders that the company is doing its utmost to resume the closed loop
flow test as soon as possible.
The final product will be an application specific, first of its kind, system for the
geothermal industry.
As previously advised, the flow test is scheduled to run continuously for a period of
six weeks. Upon completion of this test, the results will be subject to a period of
external review and validation. A successful validation will mark the completion of
Stage One of the Company’s business plan i.e. ‘Proof of Concept’.
For further information please check our website (www.geodynamics.com.au) or
contact Mr Gerry Grove-White or Mr Paul Frederiks on + 61 7 3721 7500.
Gerry Grove-White
Managing Director
Participants in the Innamincka Joint Venture are:
Geodynamics (Operator) – 70%
Origin Energy Geothermal Pty Ltd* – 30%
*A wholly owned subsidiary of Origin Energy Limited (ASX: ORG)
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National Oil Varco 2000 HP AC drilling rig similar to
the customised rig Geodynamics has ordered.