Geodynamics signs JV MoU with Origin Energy for hot sedimentary aquifier project

Alexander Richter 1 Mar 2010

Geodynamics signs MoU for Innamincka Shallows Joint Venture will focus on the exploration of shallow hot sedimentary aquifers (HSA) down to a depth of approximately 3,000m.

In a release by the company, “Geodynamics Limited announces “that it has signed a Memorandum of Understanding (MoU) with Origin Energy Limited (Origin) to enter into a Joint Venture (JV) to explore for shallow geothermal resources on existing joint venture licence areas in the Eromanga Basin in South Australia.

The MoU is separate to the existing joint venture between Geodynamics and Origin – previously referred to as the “Innamincka Joint Venture”. For ease of reference, the Innamincka Joint Venture has been renamed the “Innamincka Deeps Joint Venture”. The Innamincka Deeps Joint Venture retains its original terms – where Geodynamics is JV operator and the ownership split is 70 per cent Geodynamics and 30 per cent Origin.

Under the terms of the MoU for the new JV – which has been named the “Innamincka Shallows Joint Venture” – the ownership split will be 50 per cent Geodynamics and 50 per cent Origin. Origin will assume the role of JV operator.

This new Innamincka Shallows Joint Venture will focus on the exploration of shallow hot sedimentary aquifers (HSA) down to a depth of approximately 3,000m, as distinct from the existing Innamincka Deeps Joint Venture with Origin which focuses on higher temperature enhanced geothermal systems (EGS) in the deeper granites generally below 4,000m.

The initial exploratory work for the Innamincka Shallows Joint Venture includes the drilling and testing of two slim wells to depths of approximately 2,200m during the next 12 months to assess the viability of geothermal energy production from HSA in the Eromanga Basin. The cost will be approximately $10 million.

Origin will contribute $4.5 million of project expenditure, in addition to its 50 per cent share of project expenditure for the Innamincka Shallows Joint Venture, in exchange for a 20 per cent increase in its interest in the Shallows area. This is above its 30 per cent stake under the existing “Innamincka Joint Venture”.

Commenting on the agreement, Geodynamics Managing Director Gerry Grove-White today said: “We are delighted to have reached agreement with Origin for it to lead the exploration of our shallow resources in our South Australian licence areas.

“The new joint venture will leverage Origin’s experience, while the Geodynamics team will continue to focus on the development program for the deep resources, which have significantly greater geothermal potential. This work program remains on track and we will continue to keep shareholders informed of developments.”

Source: Company announcement