Ann: Agreement With ADE For Sharing Of Wells And , page-5

re: Ann: Agreement With ADE For Sharing Of We... Panax, Adelaide to benefit from MoU

Thursday, 5 March 2009

PANAX Geothermal and Adelaide Energy have agreed to share data and facilities over their common acreage positions in the Penola project area of the Otway Basin, South Australia.

Under the memorandum of understanding between the two companies, Panax and Adelaide will share relevant technical data, and facilities and infrastructure that are owned by each of the parties.

The MoU also allows Panax – which holds the geothermal exploration rights in the area – to use gas wells that are owned by Adelaide as geothermal reinjection wells and utilise Adelaide’s storage facilities for temporary disposal of geothermal fluids.

Adelaide holds the oil and gas rights in the Penola project area.

Panax managing director Bertus de Graaf said the company could potentially save significant capital and time by using Adelaide’s gas wells for reinjection purposes.

“Similarly, the data sharing arrangements – and agreement for sharing of facilities and infrastructure – that have been agreed will be of enormous benefits to both parties,” he said.

The company plans to use Adelaide’s water storage facilities during the testing phase of its Salamander-1 well, which is expected to be drilled in September.