I keep coming back to this post by mvanle (kudos) of an email from Elizabeth Gerrard, the GDY PR manager, especially the following paragraphs:
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The Habanero 3 well will not be operating in the near future as it is damaged and was pumped full of mud to stop the flow. The insurance claim is still being processed, but once the claim is approved we expect to drill a replacement well at Habanero. I do not have a time frame for this but expect it may be considered by the Joint Venture partners after the program of work at Jolokia is completed. The forward work program announcement indicates we will drill doublets (two wells) after Jolokia, but does not specify a location as this has not been worked out yet.
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In order to demonstrate that we have the resources required to fuel a commercial scale demonstration plant, we must demonstrate that we can access flowing fractures in other parts of our tenement. For this reason we are returning to Jolokia to hydraulically stimulate the granite and increase the size of the small fracture intercepted there during drilling. This program of work will commence in 2010 after we have completed the well - that is to insert a new casing tube the length of the well to ensure reservoir fluid does not come into contact with the existing casing which is the same as that used in Habanero 3. This new casing will mean the well is thinner but still able to be used as either an injection or production well.
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This clearly suggests that GDY has changed it's priorities from "lets get the Innamincka demo on TV and get more popular support for EGS GT" to "lets get the ducks in a line for a bankable commercial energy generation proposition". I suppose we all know that more or less, but it makes you speculate why... Maybe it's just the reality check of the Hab 3 blowout, but maybe we are seeing something more fundamental...
In the past there seemed to be a perception, rightly or wrongly, that a demonstration was the next box that needed to be ticked. Now there almost seems to be indifference to when, whether or how the 1MW demo happens - almost an attitude of: "don't bother us with that stuff, we're far too busy drilling holes and doing the maths of the business case".
I have always viewed the data centre as window dressing (I know some of you disagree).
The new message is that the fundamentals of commercial energy production need to be systematically proved up.
The way I read the language is that this view has been pressed on GDY from "above". They are at pains to distinguish that this decision comes from "the JV partners" so maybe we should ask where the JV partners (to the extent they are distinct from GDY) would get this focus from?
Does anyone else get the feeling in their gut that GDY have "been told" by someone (internal or external)? It all has the feel to me of a major capital decision needing further qualification.
I know this is all touchyfeely stuff but, as I said, I have been irresistibly drawn back to this email several times now and I think my subconscious is trying to get my attention. Perhaps this was always the real emphasis and I've just been mesmerised by the colour and movement of the Innamincka story because I'm a propeller head at heart.
I think GDY have forcefully had their attention shifted from making EGS GT work to making a commercial power plant (based on EGS GT) work - with all the issues of transmission lines, customers, contracts etc to be taken into account. If the fundamental thinking that got GDY to where they are now is correct this could be a very, very good sign. If, on the other hand, it turns out that the idea of an EGS GT plant in the middle of a very large continent was sexy but never really had legs it could foretell an imminent attitude adjustment!
RNE Price at posting:
91.5¢ Sentiment: None Disclosure: Held
(20min delay)