ferret's stock to watch: petratherm limited

Ferret's Stock to Watch: PETRATHERM LIMITED
09:51, Thursday, 5 May 2005

A COMPANY WINS SUPPORT FOR SECOND HOT ROCKS WELL IN SA

Sydney - Thursday - May 5: (RWE Australian Business News )

OVERVIEW
********

Here is another hot rocks company that is helping to pioneer a
new source of energy.

It's pretty exciting stuff with Australia in the global forefront
of tapping into hot fractured rocks to produce an almost limitless flow
of steam which is subsequently turned into power megawatts, displacing
oil and gas.

The company is drilling in the SA outback to make electricity
from hot rocks deep beneath the Earth's surface.

Below the basin lies a huge outcrop of superheated granite that
reaches temperatures close to 300 degrees Celsius.

Petratherm has just won a special PACE (Plan For Accelerating
Exploration) funding award of $140,000 from the South Australian
Government for drilling of its geothermal evaluation well at Callabonna.

Drilling of the Callabonna target will begin in about four weeks
time.

The well, to be called Yerila-1, is named after the granite which
outcrops just 40 kilometres southwest of the drilling site and is one of
the highest heat-producing granites known (over 20 times more than normal
granites).

Yerila-1, to be drilled to approximately 1 kilometre depth, will
pass through the artesian aquifer modelled at 620 metres, and then
penetrate into the interpreted Cooper Basin equivalent strata below.

Data collected from the well will enable calculation of inherent
stress characteristics and a temperature gradient profile, as part of the
hot rock evaluation process.

On completion of the Callabonna program the rig will be moved to
the Paralana-1 (GEL178) site to complete the Paralana geothermal
evaluation well to 600m.

Paralana-1 was spudded in mid January but encountered unstable
hole conditions and was halted at 306 metres.

The larger capacity rig commissioned for Yerila-1 is rated to
2,000 metres, and able to drill with a weighted mud system, overcoming
hole instabilities found at Paralana-1.

Temperature gradient data gathered from the geothermal evaluation
wells at Callabonna and Paralana will determine if there are significant
geothermal resources at these sites.

SHARE PRICE MOVEMENTS
*********************

Shares of Petratherm yesterday crept up 1.5c to 32c. Rolling high
for the year has been 46c and low 21.5c.

ONGOING DRILLING PLANS
**********************

At Paralana-1, shallow temperature logging of the upper cased
portion of the hole above 127m recorded a bottom hole temperature of 340
degrees, which is consistent with the modelled high geothermal gradient
and the recorded higher regional temperatures.

A larger capacity rig with the capacity to overcome the drilling
problems has been contracted to complete the hole to the original target
depth of 500-600m.

Callabonna Hot Rock Target (GEL 157), 70 kilometres north of
Paralana, has been moved forward in the drilling schedule and will now be
drilled immediately prior the completion of Paralana-1.

Petratherm's modelled target depth for a significant economic,
geothermal resource is 3.5 kilometres.

The initial two-step evaluation drilling program will identify
and quantify any potential resource, prior to the commitment of higher
cost, deep drilling into the thermal resource, to determine if there is a
significant geothermal resource at depth.

ONGOING GENERATIVE RESEARCH
***************************

Ongoing generative research is underway to identify potential new
geothermal areas within Australia.

Enacting of geothermal licensing legislation in Queensland has
been delayed several months, and it is now expected to be at least June
before applications can be made.

The company is considering the merits of several areas, with a
view to the possible application for licences.

BACKGROUND
**********

Petratherm was established on October 24, 2003 to explore the
tapping of high-temperature "hot fractured rocks" to produce steam for
power generation.

It obtained tenements suitable for the production of economically
viable hot rock energy, together with methodology and research data to
assess the potential of such tenements.

To date, three tenements have been obtained which are
characterised by potential occurrence of substantial rock masses with
naturally occurring radiogenic minerals.

They are in proximity to major infrastructures.

Depth to top of target rock should be in the three kilometre
range.

Petratherm believes that the requirement for power from renewable
energy sources will increase, and that hot rock energy is one of the few
forms of renewable energy that can provide base-load power without
significant impact on the environment.

ENDS