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Hot rocks firms just got hotter

MEREDITH BOOTH

June 01, 2007 02:15am
Article from: The Advertiser

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POLITICAL focus on geothermal energy sent the share prices of Australia's five public hot rocks players into orbit yesterday.

Shares in Geodynamics, Petratherm, Greenrock, Torrens Energy and Geothermal Resources climbed between eight and 28 per cent, in response to Opposition leader Kevin Rudd's promise to give $50 million to the geothermal sector if elected.

Labor environment spokesman Peter Garrett added $50 million would be matched by industry, to increase exploration for hot rock energy.

Executives from Petratherm and Geodynamics were in Canberra yesterday to advise the Federal Government on how they could assist the geothermal industry in the next six to eight months.

Petratherm managing director Terry Kallis said the ALP policy would bridge the gap between the current grants system and what was needed for exploration.

"For geothermal to get to the step where Petratherm is at, we will need extra funding. We are about to drill two wells down 4kms and we'll get no change out of $4-5 million," Mr Kallis said.

ABN Amro geothermal energy analyst Roger Leaning said geothermal company shares would be "given a kick" by the imminent Federal Government announcement on carbon trading and greenhouse gas emissions targets.

"When it's driven on political news flow it's probably a short-term reaction (to share prices). For these guys to create value they have to deliver on their projects," he said.

While distributing geothermally-produced electricity to its markets was an engineering problem, hot rocks explorers' biggest challenge was to identify quality resources of decent size and temperature, he said.