News: AWE to form JV for Geothermal program , page-6

Exploration deal heats up geothermal hopeful

by:CRITERION
From:The Australian
March 06, 201312:00AM

Green Rock Energy (GRK) 0.2c; AWE (AWE) $1.29: With investor sentiment in the geothermal sector plunging deeper than the proponents' ambitious drill targets, we're heartened to see an exploration deal between AWE and Green Rock, which traded at the lowest allowable one-tenth of a cent before yesterday's 100 per cent spurt. The pair will jointly explore overlapping tenements in the Perth Basin.

Green Rock didn't seem to have a lot going for it after its headline project (to power University of Western Australia from hot aquifers) foundered in late 2011. But Green Rock holds a $5.4 million grant from the West Australian government's Low Emission Energy Development Fund, and it hopes to secure more from Canberra's Emerging Renewables Program.

The idea is that AWE gleans hydrocarbon data from the first 2800m or so, with the drilling continuing to the geothermal depth of 3000m-3500m. AWE has the right to farm in for a 50 per cent interest. AWE also pays $250,000 to Green Rock, contingent on milestone events including procuring the federal funding.

We should stress that the targets are existing geothermal reservoirs rather than "hot rocks".

The latter involves loosening up the rock through fracking, then drawing water through the heat source. In June last year Origin Energy went cold on supporting leading hot-rocker Geodynamics, while AGL Energy and TRUenergy pulled back from their partnerships with Torrens Energy and Petratherm.

We'll call Green Rock and AWE spec buys, the latter for its broader $50m exploration efforts.

http://www.theaustralian.com.au/business/opinion/exploration-deal-heats-up-geothermal-hopeful/story-e6frg9lo-1226591098609