agl strikes geothermal deal with torrens

Congratulations TEY holders. Great news for the industry to have the two biggest utilities involved. I've picked up a few of the oppies as long term keepers.

http://www.businessspectator.com.au/bs.nsf/Article/AGL-Torrens-Energy-strike-geothermal-deal-GD2SH?OpenDocument&src=

AGL, Torrens Energy strike geothermal deal


By a staff reporter and AAP

Gas and electricity supplier AGL Energy Limited has entered into a Geothermal Alliance Agreement (GAA) with Western Australia's Torrens Energy, to jointly develop geothermal resources for power generation.

According to AGL, it will also acquire a 9.99 per cent cornerstone investment in Torrens by way of a share placement at $0.40 per share for a cash outlay of $2.2 million.

Under the terms of the GAA, AGL will have the first right of refusal to earn 50 per cent of any geothermal resource project identified by Torrens, by sole funding the completion of a deep confirmation well for an estimated cost of $10 million.

The two companies will work together under the four-year exclusive GAA, with Torrens carrying out the exploration activities and providing AGL with the option to farm-in to its geothermal exploration licences (GEL) at permit and project level.

AGL managing director Michael Fraser said “Geothermal energy is an emerging renewable technology that will complement AGL’s existing pipeline of renewable energy projects in wind and hydro. This is an opportunity for AGL to participate in the development of this new industry”.

AGL said a recent opinion from an independent geothermal consultant supports expectations that heat flow values from Torrens' permit areas are comparable to those recorded in Copper Basin in the north of South Australia.

"Torrens' permit areas have the added advantage of being located in close proximity to established electricity transmission infrastructure, which should provide cost advantages in commercially exploiting Torrens' geothermal resources," AGL said.

Torrens director John Canaris said the unique alliance represents a "significant milestone" in the company's business strategy and growth.

Torrens listed in March 2007 and has been granted a large geothermal tenement holding in areas close to Adelaide in South Australia.

Torrens said the selected areas are known for high heat flow and coincide with the overlying insulating sedimentary cover required for high temperatures to accumulate.

"In addition, and unique to Torrens, these highly prospective areas are located on the national power grid, close to large energy markets and infrastructure," Torrens said.