From today's Age newspaper.Green Rock EnergyGARIMPEIRO'S...

From today's Age newspaper.


Green Rock Energy
GARIMPEIRO'S contribution to the impossible task of making the D & D bash a carbon-neutral event is to take a look today at the geothermal or hot-rock stocks.
The most startling thing about the $500 million sector is the dominance of Geodynamics, with its $300 million-plus market cap.

Fair enough perhaps, given Geodynamics is now rigging up the Le Tourneau "Lightning" drill rig to drill its first commercial-scale production well near Innamincka in South Australia's outback.

Good luck to it too. But Garimpeiro's natural inclination is to look at those hot-rock stocks with a similar story to tell but which have a fraction of the market cap.

Green Rock Energy is a case in point. At Friday's close of 13.5¢, it's got a market cap of about $25 million.

Management is headed up by a couple of ex-WMC guys — Adrian Larking (managing director) and Alan Knights (executive director).

Larking is a seasoned geologist/lawyer. He was involved in setting up WMC's oil and gas business — yes it did have one a while — and knows more than most about the Olympic Dam copper/uranium mine, which sits in South Australia's hot-rock country and which is now part of BHP Billiton.

It's little wonder then that Green Rock's key project lies just outside the Olympic Dam mining lease and shares the same name.

Green Rock's OD hot-rock project is of the engineered type in that its plan is to generate power by extracting heat from water, which has been pumped into hot granite (fracture stimulated at depths of five kilometres) and returned to surface at some 170-200 degrees.

Work to date has confirmed the potential of it all and planning is under way on an appraisal/development pathway that envisages staged growth to 500 megawatts of power capacity by 2015-16.

The timing would tie in with BHP's proposed expansion of the Olympic Dam mine. But given Green Rock's project area sits 10 kilometres from the eastern Australian high-voltage electricity grid, finding a market for the "green" electricity (a 100MW power station avoids 800,000 tonnes a year of carbon dioxide emissions) won't be a problem.

Rounding out Green Rock's portfolio is a traditional hot-rock play in Hungary (hot water is extracted rather than pumped in) and an engineered hot-rock play in SA's Spencer Gulf.

Followers of BHP's Olympic Dam expansion project will know that BHP is planning to meet the project's monster water requirements by building a desalination plant in the upper reaches of the Spencer Gulf.

Powering it with "green" energy could be an option.

Cheers
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