tp, page-7

Hello again HS!

Basically, my view on the drilling rate is positive. The 'commissioning delays' are said to be very much non-systemic, arising from various learning minor causes, primarily regarding the PLC (programmable logic control - a bit like an autopilot with highly active feedback mechanisms), and some minor drilling mud pressure control issues. Such 'issues' would be more accurately described as learning curves.

By far the main focus for me is that the delays are non-systemic. From here, a focus on drilling rate should allow these higher down-well velocities to continue. Regarding the "-Note that not all sections are so easy to drill and that lower rates of penetration can be expected in some of the harder sandstone formations to come-", this really is a vague reference to the numerous horizons that sandstone usually exhibits. Multiple hard-sandstone horizons have already been intersected on the way down to 2000m, as can be confirmed by the company. I would not see this as a declaration of the intent to slow rates.

During the next 1700m, the structure of the rocks will vary, particularly in terms of hardness, but it should average out to a rate that may equal this latest round of results, particularly as the 'learning curve' delays are eliminated.

My guess (really just a guess) would be granite intersection within a month, based on current drilling rates, but not factoring in a reduction in delays. From there, we will really have to wait to see how the rig handles the granites, and it is difficult to put a figure on how granite drilling (and the associated fluid control issues) will impact upon rates.

Besides that, everything is going well. They will not put a number on it, but the drill bits are performing as well as could be expected, as is the rig itself. I would use the phrase 'exceeds expectations' if I didn't already have such high expectations of it's capability!

Great to see Mr R. Healy put another $9M injection into the company yesterday. Whatever he knows, it must be good, and I think he would want a pretty thorough idea of the probability of drilling success before he made a move like that.

So, looking forward to a critical data release in 13 days, to see just how much progress they make along their learning curve.

Hopefully some time before target depth they will indulge us with an estimate, or a list of options, for the 500MW system pricing. They have data from ROAM - they refuse to release it. They are pursuing options for plant design/cost - they refuse to outline them. They will soon be able to estimate the number of wells required to service the facility - this variable will also be critical to the pricing of the project, and must be released to the market when understood. $226M just to get HotRock40 up and running (40MW), how much can we rely on economies of scale here? Does anyone have an estimate of any of these figures (excluding transmission, which is easy enough to guess at)?

Anyway, hopefully within a month the company will have intersected Australia's hottest known geothermal resource, saturated with in-situ geothermal fluid, and ready for conclusive flow test results that will send this company to the heights of ASX superstardom (is that even a word?).

I'm looking for one more market crunch to get more GDYO - this company is on the verge of success.