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Panax Geothermal with update on drilling at Penola

Australian listed Panax Geothermal has announced that “based on recently available advice from Weatherford Drilling International (“WDI”), Panax’s Salamander-1 well will spud during early September 2009.

On 18 August 2008, Panax executed a binding Heads Of Agreement with WDI, for the purposes of securing a firm drilling rig slot for mid 2009 for the use of a drilling rig suitable for the drilling of Salamander-1.

A deposit of approximately AU$ 500,000 was paid to ensure that the drilling rig slot is confirmed. Subsequent to that time, a formal Drilling Contract has been agreed.

The rig is a new 2,000 HP LTI “Lightning” Rig, WDI Rig # 828, which is being mobilized by WDI into Australia. The scheduled shipping date from Dubai is 15 April 2009 and the rig is expected to arrive into South Australia on 10 May 2009. The Salamander-1 well is the second well to be drilled in the WDI drilling program. The well to be drilled immediately prior to the Panax well is scheduled to spud on 15 June 2009.

Under the terms of the drilling contract, Panax has the option to drill a second well within an 18 month period of the first well having been drilled.

While the revised date for the spudding of Salamander-1 is slightly later than originally anticipated, this will not have any impact on Panax’s application under the Australian Government’s Geothermal Drilling Program. In late December 2008,

Panax applied for a grant of up to AU$7 million for the Salamander-1 well. The announcement of successful applications under this Program are expected to be announced by the end of March 2009.

Panax is also pleased to advise that it has recently placed a firm order with Wood Group Limited for the purchase of the required wellhead and associated items for the Salamander-1 well. A deposit representing approximately 35% of the total wellhead cost has been paid to ensure the security of delivery of this item.”

Source: Company statement via

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