South Australia Future Energy Conference Adelaide 17-18 ... · South Australia Future Energy Conference Adelaide 17-18 August, 2009 For personal use only Bt dG fBertus de Graaf

South Australia Future Energy ConferenceAdelaide 17-18 August, 2009

B t d G fBertus de GraafFor

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Background (PAX:ASX)

Panax Geothermal Ltd (ASX: PAX)

• 100% geothermal exploration & development company;

• Conventional geothermal energy (i e existing hot water)energy (i.e. existing hot water) = Main Focus.

– Penola Three advanced geothermal projects:

Limestone Coast, S.A;Drilling of production well scheduled for 2nd half 2009; Contract Rig securedContract Rig secured.

– Puga Himalayas, India.

– TirrawarraCooper Basin, SAGovernment drilling grant applied for

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CorporateFinancial

• Share Capital: 253 Million Shares on issue.• ASX code: PAX• Cash Position: AUD $15.2 Million, 31 July 2009,

zero debt.• GDP Grant: A$7.0 million,

first drawdown received ($2.45 million).• Market Cap: Approximately $48 million.p pp y

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CorporateExperienced Board & Management

Mr. Greg Martyr Partner of Gryphon Partners.(Non-Exec. Chairman) Ex Normandy Mining Group. Ex Deutsche Bank.

Dr. Bertus de Graaf Founder and past Managing Director of two(Managing Dir & CEO) other Resource Companies(Managing Dir. & CEO) other Resource Companies

(Ross Mining & Geodynamics).

Mr. Kerry Parker Ex CFO Arrow Energy.(Exec. Director, CFO >15 years in resource development.& C S t )& Co. Secretary)

Mr Ian Reid Geophysicist with >25 years in petroleum and (Non-Exec. Director) geothermal projects. Extensive reservoir expertise.

Mr. Ron Palmer Geoscientist with > 20 years in Mineral Exploration.(COO) Founder of Osiris Energy & Hot Dry Rocks Pty Ltd.

Mr David Jenson Mechanical engineer with 30 years experience(GM - in design, construction, commissioning andGeothermal Engineering) operation of geothermal power plants. 4

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1. Conventional (HSA) –

Two Types of Geothermal Systems in Australia

commercially proven;2. Enhanced (e.g. HFR) –

still experimental.

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Limestone Coast Geothermal Project(Otway Basin – Hot Sedimentary Aquifer)

High heat flow zones • Dormant volcanic

province;

• Deep basement also heat source;

• Studies of existing wells (26 water, 19 gas);

• Confirmed existence of Hot Sedimentary Aquifer;

• Katnook 2 (gas well) recorded 143°C @ 3,460m depths (= GEL 223);

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• 5 yrs in preparation.For

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Limestone Coast Geothermal ProjectExcellent Infrastructure

• Large tenement position g p(3,000km2);

• Excellent infrastructure:– HV power linesHV power lines

overhead;– Interstate grid

connection on leases;– Close to customers.

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Limestone Coast Geothermal Project, SA - Otway BasinSA - Otway Basin

Hot Sedimentary Aquifer (HSA)Geological BasisGeological Basis• High Heat Flow

(recent volcanism & basement);

I l ti l• Insulating layer (Eumeralla Formation);

• Productive Reservoir (Pretty Hill Sandstones);

• Geothermal temperatures (150 - 200OC @ 3,500m to 4,000m).

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Limestone Coast Geothermal Project

Geothermal Power Generation- Geothermal Power Generation

• Use of Binary Geothermal Power Plant – ‘closed loop’;

• Off the shelf technology;

• Small environmental foot print;

• One production well at flowOne production well at flow rate of 175kg/sec @ 145OC (293OF) generates 5.9 MWe net power (excluding production p ( g ppumping power).

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Limestone Coast Geothermal ProjectGeothermal Resource Assessment (AGEA Code)( )

• Four troughs, target HSA;;

• Large potential;

• Excellent infrastructure;Excellent infrastructure;

• Geothermal resource estimates for three t htroughs;

• Penola Trough advanced project – Production

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p oject oduct owell 2nd half 2009.

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Independent Geothermal ResourceAssessment(AGEA d HDRPL)(AGEA code, HDRPL)

Limestone Coast Geothermal Resources*)Limestone Coast Geothermal Resources

Trough Measured (PJ)

Indicated (PJ)

Inferred (PJ)

Total (PJ) Report Date

Penola 11,000 32,000 89,000 132,000 18/02/2009

Rivoli & St Clair 53 000 53 000 28/01/2009Rivoli & St. Clair 53,000 53,000 28/01/2009

Rendelsham 17,000 17,000 28/01/2009

Tantanoola 130,000 130,000 31/03/2009

Tirrawarra Project*)Tirrawarra Project )

Tirrawarra 11,000 30,000 0 41,000 07/07/2009

Total 22,000 62,000 289,000 373,000*) by Dr. Graeme Beardsmore of HDRPL

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Penola Project – Measured Geothermal Resource

Measured GeothermalMeasured Geothermal Resource = 11,000 PJ

• “Measured Resource” restricted to top 800mrestricted to top 800m of Target Reservoir;

• 28 deep petroleum wells + logs + core + gBottom Hole Temperatures (BHT);

• Deepest wells approx. 3,500m or >600m of target reservoir penetrated;400 km2 3D seismic;

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• 400 km2 3D seismic;• 1,000 km 2D seismic.

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Penola Project Regional Map

• Excellent• Excellent infrastructure:– National & State

grid;g ;– Tarmac roads;– Flat terrain;– Local gas fired g

station & substation (86 MW);

– Note 3D seismic cover;

– Mt. Gambier AirportAirport.

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3D Seismic & Pretty Hill Formation Target Reservoir, Penola Project (GEL 223)

• 600m of Pretty Hill SandstoneSandstone intersected; total thickness 1,000m;

• Measured• Measured porosity/permeability 10 - 50 Darcy–metres;Fl t 175k /• Flow rates >175kg/sec can be achieved.

(Dark blue = >18% porosity in Pretty Hill Formation, our target rocks)

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Penola Project Petroleum Wells & Seismic Data Provide Certainty• Confirmation of

Reservoir Permeability/Porosity (175kg/sec);(175kg/sec);

• Confirmation of minimum temp. (+/-145OC or 293OF);145OC or 293OF);

• Production well 175kg/sec 4.5 MW net plant net pumpsnet plant, net pumps.

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4. Penola Project – BackgroundDrill test

• Ladbroke Grove-1 intersected 875m of target reservoir with transmissivity in the range of 48 D.m to 68 D.m;

• Minimum requirement = 10-12 D.m;

• High porosity zones fdetermined from

detailed 3D seismic/well log data.

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Drilling Salamander-1• First well to demonstrate conventional geothermal

energy in Australia;energy in Australia;• Well to spud in October 2009 (Steam!);• Designed as production well;• Off set data from more than 20 deep wells;• Deepest well (3,499 meters) completed in 24 days;• Well cost estimate approx. AUD$12 million;• Temperature is known (160˚C @ 4,000m);

Ai t A t li ’ fi t “G th l• Aim to prove Australia’s first “Geothermal Reserve”.

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4. Penola Project – Resources to ReservesDrilling & Well Testing Programme

• Salamander-1 designed to carry out well testing programme as designed by SKM (NZ) & signed-off by GeothermEx. (USA);

• Tests are designed to establish initial geothermal reserves – forTests are designed to establish initial geothermal reserves for making a development decision;

• HSA projects are faster to develop cf. HFR projects.

1.

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Penola Project – Base-Case StudyBASE CASE

Flow 175 kg/sec

(Binary Geothermal Power Plant)

Target Reservoir

Brine Temp. 145OC (293OF)

Injection Temp. 70OC (158OF)

Temp. & Reservoir quality known from open file data base

Ambient Temp. 1) 16OC (61OF)

Gross Output 2) 6.7 MWe

Net Plant Output 2)Net Plant Output 2)(MWe)

5.9 MWe

Net Plant / Net Pumps Output (MWe)

4.5 MWe

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1) Aust. Bureau of Meteorology.2) As supplied by ORMAT.

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Penola Project Staged Development to 59 MW net

• Spud Salamander 1 Aug /Sept 2009;• Spud Salamander-1 Aug./Sept. 2009;• Grid connected Demonstration Plant – 2nd half 2011.

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Penola Project – Base-Case Study

Total Costs per MWh *)Total Costs per MWh ) (Capital & Operating Costs)

Total No. Prod. Wells

Net output **)(MW)

Total Cost (MWh)AUDAUD

Demonstration Plant 1 5.9 $77

Phase 1 Plant 3 17.7 $63

• Signed off by GeothermEx; Audited by KPMG

Phase 2 Plant 10 59 $55

Signed off by GeothermEx; Audited by KPMG

*) 30 year life; 95% availability; no financing costs.

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**) Net = power output net of plant pre-finance.

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Summary

• Limestone Coast Geothermal Project has a large potential;• The Penola Project is associated with a “Measured Geothermal Resource

of 11,000 PJ, sufficient for 100’s of MW’s of power generation;• Penola Project gained Commonwealth Government recognition

($7 million GDP grant);

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Summary continued

• The Penola Project is located close to the grid;• Independently reviewed, new Base-Case cash flow modeling confirms

the Penola Project has the potential to generate low cost, zero-i iemission power;

• Salamander-1 to spud in October 2009, with the aim to establish first “Geothermal Reserves” within 6 months of spud date of well.

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Note : Geothermal Resource Information

Th i f ti i thi P t ti th t l t t th ti ti f G th l R h b il d bThe information in this Presentation that relates to the estimation of Geothermal Resources has been compiled by Dr Graeme Beardsmore, an employee of Hot Dry Rocks Pty Ltd. Dr Beardsmore has over 15 years experience in the measurement and estimation of crustal temperatures and stored heat for the style of geothermal play under consideration. He is a member of the Australian Society of Exploration Geophysicists and abides by the Code of Ethics of that organization.

Dr Beardsmore qualifies as a Competent Person as defined by the Australian Code For Reporting Of Exploration Results, Geothermal Resources and Geothermal Reserves (2008 Edition). Dr Beardsmore consents to the public release of this announcement in the form and content in which it appears.

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