Australian Geothermal Project Starts Second Well

In geothermal excavation terms, to spud means to drill, and Geodynamics has begun a successful spud for Habanero 2, their second geothermal production well. The Habanero wells are for a hot-fractured rock demonstration project to extract the 250 degrees Celsius heat of the target hot granite buried over 4.4 km under the ground at the company’s Cooper Basin Hot Fractured Rock geothermal project.

Cooper Basin, Australia – July 19, 2004 [] Managing Director for Geodynamics Bertus de Graaf said the second well is located 500 meters from the injection well Habanero 1, and is designed to intersect the underground heat exchanger. Century Drilling was contracted for the excavation of Habanero 2. “The hot rocks in Geodynamics 985 sq km geothermal exploration licenses hold heat equivalent to 50 billion barrels of oil, almost 20 times Australia’s remaining oil reserves,” de Graaf said. “Our objective is to play a real role in affecting the balance of power generation in Australia. We believe that this renewable energy resource will be cost competitive against coal and gas.” de Graaf said Habanero 2 would be drilled to a depth of 15,000 ft (4,572 m), with a drilling timetable of 95 days. The company expects to reach total depth in mid October. Woodside and Origin Energy, cornerstone investors for the project, provided well design software and planning expertise. The well was budgeted to cost AUD$ 8.7 million (US$ 6.3 million) with a contingency fund of $1.3 million, and additional costs of $500,000 to hire specialized under-balanced drilling equipment. “Our engineers have designed the well to cope with the high temperatures and pressures that were found in the granites during drilling of Habanero 1,” de Graaf said. “So the design and drilling of Habanero 2 has benefited from lessons learnt from Habanero 1.” Geodynamics has reached each milestone in establishing its pioneering Hot Fractured Rock program, and the overall risk of the project is now significantly mitigated, de Graaf said. The company is on track in its preparation of a circulation test, which is scheduled for a three to four month trial at the end of 2004. Water will be pumped through the first well to the underground heat exchanger, with the superheated water then returned to the surface under pressure through the second well. “We have confirmed temperatures of 250 degrees Celsius in the buried granites at 4,400 m,” de Graaf said. “We have also shown the horizontal nature of the underground heat exchanger, which will potentially enable heat mining on a regional scale. The stimulated area is more than nine times larger than we expected. The overpressures that were discovered during the drilling of Habanero 1 are very advantageous in that they contain water under pressure, which in turn reduces the risk of water losses.”