HIGHLIGHTS
• Geothermal energy projects reliably produce green baseload energy to power grids around the world
• The USA’s annual geothermal power production of 17.2 terawatt hours would meet all Western
Australia’s annual electricity demand1
• The annual geothermal electricity production of the USA, Indonesia and Philippines combined would
meet over 17% of Australia’s annual electricity demand2
• EE1 holds Australia’s most advanced geothermal projects, each with significant development
potential
• Paralana Project:
• Drilled to a depth of 3,685m with a bottom hole temperature of 171°C3
• Significantly high gradient of >46°C per km of depth (1.84x Australian average)4
• Commercial Power Potential: Between 97 and 233 GWhs
5 per annum potential based on
conservative conventional analogous US projects (representing between 10,450 and 25,102
households’ power consumption per annum6)
• Geothermal System Options: Enhanced Geothermal (EGS) and Advanced Geothermal
(AGS) type systems expected to improve commercial development
• Potential for New Drilling in 2025: Potential for Paralana 2 extension at depth
• Flinders West Project:
• Drilled to a depth of 1,934m with a bottom hole temperature of 85°C7
• Significantly high gradient of >43°C per km of depth (1.72x Australian average)8
• Commercial Power Potential: The upper range of the power density at Flinders West Corridor
was independently estimated at 7 MWe/km2,9 which has the capacity to support
commercial power production
• Grid Access: Selling power and grid services directly onto the South Australian and East
Coast power networks is realistic from Flinders West
• Carbon Storage Attributes: Developed for the potential of its Captured Carbon Storage
(CCS) attributes
• Next Generation Technology: Potentially suited for Next Generation Project (NGP)
technologies beyond EGS and AGS
Earths Energy Limited (Earths Energy, EE1 or the Company) is pleased to
announce updates regarding its South Australian projects.
Following the recent appointment of the Company’s Chief Executive Officer, Mr. Josh
Puckridge, the Company has undertaken a review of its South Australian projects.
This review was conducted internally and by geothermal consultancy JRG Energy (JRG)
who have acted as independent technical advisors with respect to this announcement.
The work recently completed has focused on evaluating the development potential of
the Company’s South Australian portfolio ensuring the Company maintains projects
capable of being developed into world class geothermal projects for the purpose of
commercial electricity production.
“This recent work completed by EE1 and JRG confirms that the Company holds some of
Australia’s most advanced geothermal projects. The work completed at Paralana makes
it a prime development candidate and beneficiary of the innovations made in US based
EGS projects.”
Josh Puckridge, Company CEO, EXECUTIVE SUMMARY OF WORK COMPLETED
The recent work completed confirms that the Company’s projects in South Australia are
not just significant by Australian geothermal project standards but are also projects that
maintain global development potential (see Figure 2 on page 4).
Recent work completed by US groups in Nevada show that the Company’s South
Australian projects contain significant development potential by incorporating recent
developments in both Enhanced and Advanced Geothermal Systems.
Based on a relatively conservative group of analogous projects operating in the US (see
Figure 2 and Figure 5), the Company could readily begin assessing the feasibility of 40MWe
to 80MWe installed capacity projects at multiple sites within South Australia.
Initial work completed also indicates the potential for Captured Carbon Storage project
development. This is an enticing opportunity for the Company as South Australia is one of
few Australian jurisdictions with legislation in place to support the development of projects
such as Paralana and Flinders West.
Finally, the Company has identified further strategic opportunities from its coverage of the
power grid between Port Augusta and Olympic Dam, which enhances development
potential and attractiveness.
SOUTH AUSTRALIAN PROJECT AREAS
The Company’s South Australian assets have been defined into two new project areas:
1. Paralana (300 kms to the northeast of Port Augusta), and
2. Flinders West (beginning 45 kms northwest of Port Augusta to Olympic Dam).
These two project areas are represented in Figure 2 above. Figure 2 shows the Company’s
South Australian projects in the context of operating geothermal projects around the
world. This shows clearly that the Company’s already established power density is sufficient
by global standards to be developed (this is further expanded on in this announcement).
Favourable CCS Legislation: work completed by the Company has confirmed that the
process and legislation is in place in South Australia to commercially develop a CCS
project under a strategic gas storage licence.
Favourable Logistics to Grid Access in South Australia and the East Coast of Australia:
recent reports by the Australian Energy Market Operator (AEMO)12 confirms that the
regulatory approvals are in progress that would see the likely points of grid access
available at the Flinders West Corridor project also be connected to Australia’s East Coast
power network. This greatly improves the viability of any project considered at Flinders
West.
PARALANA PROJECT
Project Highlights:
• Drilled to 4,012m depth with a reservoir temperature of 190°C
• Heat gradients as high as 80°C per km of depth in initial shallow areas
• Perfect candidate for new EGS engineering and methods from the US
• Potential for new drilling in 2025 to extend Paralana 2’s well depth
The Paralana project contained Australia’s second EGS project to be drilled to reservoir
depth. The area was originally targeted from the known high heat production of the
Mount Painter Inlier, the Paralana Hot Spring with 62°C water at the surface and the
presence of insulating sediments. The Paralana 1B shallow heat flow well was drilled in
September 2005 to a depth of 492m. The measured temperature gradient was over 80°C
per km. The well was then deepened to 1,807m in June 2006, recording a bottom hole
temperature of 109°C, and a calculated heat flow of 129 mW/m2
.
The Paralana 2 well was spudded in late June 2009 and the rig was released in December
2009 after reaching a total depth of 4,012m. Highly fractured ground in the lower part of
the well resulted in a partial well collapse, with 7-inch casing cemented in the well to a
depth of 3,725m and could not be developed further. A temperature of 176°C was
measured at a depth of 3,672m. Overpressures of approximately 3,300 psi in geothermal
brines were found at depths between 3,670m and 3,864m.
In January 2011, the well was perforated over the interval 3,679m to 3,685m and a
diagnostic fracture injectivity test was run. After stimulation, the measured well head
pressure was 3,940 psi indicating that the injectivity test had successfully connected with
over-pressured reservoir fluids. A larger stimulation was conducted in July 2011. 3.1 ML of
fluid was injected over a five-day period. Initial injection rates were only 2 to 4 l/s (1-2 bpm)
but increased to 20 l/s (10 bpm) after the injection of several acid stages. More than 10,000
microseismic events were recorded, with a complex distribution. The stimulated zone
extends to the northeast and east of the Paralana 2 well by up to 900m with depths
between 3,500m and 4,000m.
Unlike the recent successful EGS projects in Nevada, Paralana 2 (in 2011) was drilled
vertically and stimulated conventionally to achieve self-flow of 6 l/s and up to 20 l/s during
injection. Using a horizontal well pair development concept similar to that pioneered in
Nevada, there is potential to increase these rates significantly.
Figure 5 identifies operating projects based in the USA which share similar power densities
and temperatures (see Figure 2). The majority of these projects have been in operation
since the late 1980s and early 1990s; significant developments have since been made in
geothermal reservoir modelling and engineering. None of these projects represent an
Enhanced or Advanced Geothermal System or project.
The relationship between Installed Capacity and Annual Production for this group of
projects highlights how the Installed Capacity (or the ‘Nameplate Capacity’) does not
necessarily represent a consistent relationship to Annual Production across projects.
Mammoth’s 40 MW capacity, for example, outproduces the Heber project’s annual
production even though its installed capacity is almost twice that at 81.5 MW of capacity.
Modern engineering and project characteristics can result in meaningful power
production from lower installed capacities.
Key Technical Summary: Paralana is a well-developed geothermal project with significant
drilled and proven heat and pressure. EGS engineering and methods were not as
advanced as exists today and, as such, the Company can quickly reassess and establish
the potential of Paralana as a modern EGS project.
Next steps at Paralana:
• Modelling work to support a new generation EGS project at Paralana
• Refine Paralana’s power density modelling and likely energy production
compared to US analogues utilising more modern engineering
• Assess the feasibility of further drilling at Paralana 2 in the context of further
developing the project’s potential EGS development
• Assess potential joint venture opportunties
FLINDERS WEST PROJECT
Project Highlights:
• Existing well drilled to 1,934m depth with a reservoir temperature of 85.3°C
• Excellent Grid Access with Grid Services potential
• CCS Exploration and Development Potential
• Next Generation Geothermal Production Potential
In the early 2000s, the growing interest in renewable energy led to initial investigations of
the geothermal potential in the Flinders West Corridor. In 2005, Green Rock secured GELs
over the area surrounding the Olympic Dam mine and drilled Blanche 1.
Blanche 1 reached a terminal depth of 1,934m below ground level and reported the
following:
• 718m sedimentary rock cover,
• Geothermal gradient estimated to 43°C per km of depth,
• Underlying the sedimentary rock is the crystalline basement composed of fractured
granitic rocks (Gawler Craton, 1,217m thick), geothermal gradient estimated to
30°C per km, and
• Measured maximum downhole temperature was 85.3°C at 1,934m.
The exploratory surveys and drilling completed to date across the northern GELs 695 and
768 suggest the potential for an Enhanced Geothermal System (EGS) project. The
extrapolated depth to 150°C (necessary for power generation) is ~3.5 km suggesting some
potential for an engineered geothermal system project using stimulated horizontal well
pairs as pioneered by US operations in Nevada. However, these Nevada wells are ~2.5 km
and ~175°C, as a result, additional work will be needed to demonstrate viable economics
for an EGS project in the Flinders West Corridor.
Simultaneously, other companies were awarded surrounding GELs, along the western
shoreline of Lake Torrens southward to Port Augusta. Exploration activities in that area
focused on acquiring temperature and thermal conductivity (TC) data from mineral
drillholes, which reported geothermal gradients between 30°C and 40°C per km, and a
sedimentary cover of >1,000m across the southern GELs 692, 693 and 694.
Next Generation Geothermal Power Production Potential: Flinders West shows early signs
of suitability for other Next Generation Geothermal Power production innovations beyond
EGS and AGS. The Company is also assessing the suitability of new plant and systems
designs such as supercritical carbon dioxide (sCO2) systems that utilize liquid CO2 instead
of H2O as the fluid circulating in the geothermal reservoir to excavate heat. These designs
are in early development but are being progressed and developed by multiple highly
reputable engineering firms around the globe.
Captured Carbon Storage Potential: low TC sedimentary units (such as Tregolana Shale
and Tapley Hill Formation) can act as an insulator / a low permeability caprock with
potential for exploration and development of CO2 subsurface storage should a suitable
reservoir be identified in future exploration work in the underlying sandstone or fractured
basement.
Similarly to Figure 5, Figure 6 illustrates US based operating geothermal projects analogous
to the Flinders West Corridor based on shared heat characteristics and power densities.
The potential for non-linear annual power output relative to the project’s installed
capacity is further highlighted by the annual production of GWhs by the San Emidio and
Raft River projects.
Key Technical Summary: Flinders West is a promising geothermal site, drilled to 1,934m with
a temperature of 85°C and a high gradient of 43°C per km of depth. It offers excellent grid
access and potential for Enhanced Geothermal Systems (EGS) and carbon capture.
Analogous US projects confirm its scalability, with future plans for subsurface exploration
and leveraging next-generation engineering potentially beyond EGS and AGS.
Next Steps at Flinders West:
• Identify and appoint appropriate subsurface exploration team for CCS and
geothermal development
• Progress assessment and discussions regarding grid access and grid services
along the Flinders West Corridor
• Continue techno-economic assessment of new technologies and engineering
such as Next Generation Geothermal Power Production
• Assess potential joint venture opportunities