Geodynamics to start spudding Habanero 4 well and sold drilling rig

Geodynamics to start spudding Habanero 4 well and sold drilling rig Drilling crew preparing for spudding of Habanero 4, Australia (source: Geodynamics)
Alexander Richter 7 Mar 2012

Australian Geodynamics announces it has received all necessary permits to commence spudding of Habanero 4 well at its Innamincka Deeps project and reports the sale of drilling rig Rig 100 to a Weatherford daughter company.

In an announcement this morning, Australian geothermal developer Geodynamics Ltd. announces preparations to spud the Habanero 4 well and the sale of a drilling rig.

The company has received all necessary approvals to spud the Habanero 4 well and will soon commence drilling. Drilling Habanero 4 is the first stage in the gated appraisal and development program that was developed with Joint Venture partner, Origin Energy, and outlined to shareholders at the 2011 Annual General Meeting.

Habanero 4 is targeting a maximum depth of 4,170 metres and completion is expected in approximately four months. Located approximately 120 metres east of Habanero 3, the Habanero 4 site has been selected so that the well will intersect the existing stimulated fracture zone in an area of demonstrated productivity.

Geodynamics? Chief Executive Officer Geoff Ward said, “Recommencement of drilling operations at Habanero 4 is a significant milestone for Geodynamics. Re-establishing access to the Habanero reservoir is a key step to demonstrating the commercial potential and productivity of the world-class deep granite geothermal resource in the Cooper Basin.”

In the release the company also announces that the Innamincka Deeps Joint Venture partners have executed an agreement for the sale of the jointly-owned drilling rig asset, Rig 100, to Key International Drilling Company Limited, a wholly owned subsidiary of Weatherford International Ltd. Additionally Geodynamics has entered into a new agreement with Weatherford Drilling International (Australia) Pty Ltd (WDI) to carry out the drilling of Habanero 4 using Rig 100 which is expected to commence within the next week as soon as funds are received to complete the rig sale.

The total cash consideration for the rig and associated drilling equipment is $16.8 million less selling costs. The decision to sell the rig allows Geodynamics to focus on its core business of geothermal resource development. For future wells, the Company plans to lease or use a rig hiring arrangement in line with standard industry practice.

Mr Ward commented, “The sale of Rig 100 frees up valuable funds to allow us to continue the appraisal and development of the Cooper Basin „Deeps? EGS resource. Together with existing funds and those recently secured from capital raising, the settlement of the Habanero 3 insurance claim as well as accelerated access to funding under the $90 million federal Renewable Energy Demonstration Program (REDP) grant, Geodynamics is strongly positioned to carry out this current drilling campaign at Habanero.”

Source: Company release by email