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Base-load, national scale,zero emissions
8TH ANNUAL AUSTOCK CONFERENCE
Geoff Ward – Managing Director
March 2011
Geodynamics –
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IMPORTANT INFORMATION
Disclaimer
This presentation contains general information only which is current as at March 2011.
Any forward looking information in this presentation has been prepared on the basis of a number of assumptions regarding
present and future business strategies and the environment in which Geodynamics Limited will operate in future which may
prove to be incorrect and these statements speak only as of the date of this presentation.
This presentation should not be relied upon as a recommendation to buy or sell shares by Geodynamics Limited. No
recipient of this presentation should construe anything in this presentation as legal, business or tax advice.
Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in
Geodynamics Limited.
All references to $ are references to Australian dollars unless otherwise specifically marked.
Competent Persons Statement
The information in this report that relates to Geothermal Resources is based upon information compiled by Dr Doone
Wyborn, who is a Fellow of the Australasian Institute of Mining and Metallurgy.
Dr Wyborn is employed by Geodynamics Limited. Dr Wyborn has sufficient experience which is relevant to the style of
geothermal play under consideration to qualify as a Competent Person as defined in Edition 1 (2008) of the “Geothermal
Reporting Code, 2008”.
Dr Wyborn consents to the inclusion in the report of the above information in the form and context in which it appears.
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GEODYNAMICS AT A GLANCE
A company built around a world-class
resource:
Geodynamics is
Australia‟s most
advanced geothermal
energy developer.
• Access to a world-class resource in the Cooper Basin, South Australia
• Well defined path to demonstrate value of resource through development of 25 MWe commercial demonstration plant (CDP)
• $90 M Federal Government Renewable Energy Demonstration Program (REDP) grant to support delivery of CDP
• Strong management team with extensive geothermal field experience
• Joint venture with Origin Energy (“Deeps” & “Shallows”)
• Cornerstone investors in Origin Energy, Tata Power, Sunsuper and The Sentient Group
• Strong balance sheet and financial capability to deliver forward program
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COOPER BASIN PROJECT
• Global leader with most deep hole,
high temperature geothermal
drilling experience in granites
• Inferred resource from explored
areas of 230,000 PJ heat in place
• Capable of delivering 7,000 PJ
(electrical)
• Equivalent to electrical supply
from ~16 Tcf of natural gas or
~750 MT thermal coal
(40% eff.)
• Ultimate potential to supply
up to 6,500 MWe of long
term base-load power
World-class resource with potential to provide
20% of Australia‟s base-load power
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Geodynamics‟ resource potential is vast
• Largest and hottest known geothermal resource in Australia suitable for
EGS and HSA
Enhanced Geothermal
• “Deeps”
• > 4,000 m
• High temperatures (250 – 300C)
• Large scale („000‟s MWe)
• Origin Energy 30%
Sedimentary Geothermal
• “Shallows”
• < 3,000 m
• Moderate temperatures
(135 - 150C)
• Lower cost drilling
• Mid scale („00‟s MWe)
• Origin Energy 50%
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CURRENT ACTIVITIES
„Shallows‟ HSA exploration:
• Origin is JV Operator
• Celsius 1 and 2 exploration wells at depths of ~2,000m
• Wells indicate temperatures ~130 –145C
„Deeps‟ EGS development:
• Next step in program is to return to
Habanero site – Habanero 4
• Proposed drilling program following
„Shallows‟ exploration
• Habanero 4 will provide power
source for 1 MWe Pilot Plant
• Remain focused on delivery of
1 MWe Pilot Plant by early 2012
Complementary programs for EGS and HSA
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Diversifying portfolio opportunities
• Hunter Valley NSW, EGS
• Undertaking seismicity study in preparation
for a 2 km temperature delineation well
• Queensland, EGS
• Shallow drilling program under development
EXPLORATION
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Value enhancing stepsGeodynamics has a clear strategy to demonstrate value of the Cooper Basin
resource with identifiable value accretion milestones within 6, 12, 24 months.
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~ 9 months
• Habanero 4
• 1 MWe Pilot
Plant
operational
• 25 MWe FID
• H5/H6 second
flow loop
operational
• 25 MWe
operational
• PFS on full
scale plant
30 - 42 months
~24 months
~12 months
Re-establish heat flow
loop; demonstrate drill
capability & well integrity.
Deliver first power from
EGS technology and
sustained well production.
First commercial customer for
power & demonstrate expansion
of power supply capability
through second flow loop .
Delivery of first
commercial power;
establish long-term
cost path .
Establish flow potential .
~ 3 months
Potential to crystallise value of
resource for funding of future
activities.
• “Shallows”
C1/C2
exploration
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Execution focus – delivering the program
• Field operations focused on delivering
program objectives and lowering costs
• Cost reduction focus:
- Drill the Limit
- Improved drill bit life
- Improved drilling fluids
• Efficient Rig asset management giving
control of our program:
- Rig 100 delivering near term program
- Rig 200 actively leasing to world market
while not required by Geodynamics
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WHY AUSTRALIAN GEOTHERMAL? Geothermal is the lowest cost source of
emissions-free, renewable energy for base-
load (24/7 availability) power generation
Can be integrated with other technologies – e.g.
solar and gas
The smallest environmental footprint of all
energy types
Scalable for on and off-grid projects
Australian market opportunity is real – Growing
energy demand
plus regulated renewable energy targets
Vast global potential
Australian market
opportunity is real –
Growing energy
demand plus
regulated renewable
energy targets.
Key Messages: y messages:
• Geothermal is the lowest cost source of
emissions-free, renewable energy for base-load
(24/7 availability) power generation
• Can be integrated with other technologies – e.g.
solar and gas
• The smallest environmental footprint of all
energy types
• Scalable for on and off-grid projects
• Geodynamics‟ EGS resource has potential to
provide the energy for up to 20% of Australia‟s
base-load power generation
• Potential to export know-how to international
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Australian market potential~9,000 MWe of market growth and retirement potential forecast over the coming
decade.
Forecasts developed from internal Geodynamics analysis
Transmission link <$400 M
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Meeting the Renewable Energy Target
* Australian Federal Treasury Modelling for CPRS scheme- Dec. 2008
“20% by 2020”
Energy market regulation promoting renewable sources - mandatory 20% renewable
energy contribution required in Australia by 2020
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Cost competitive future technologies
Geodynamics is pursuing both
HSA and EGS
Geodynamics long run Cooper Basin
EGS forecast cost
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Enormous global potential for the futurePotential to leverage IP and technology into other locations including India,
China, Europe
Heat maps indicate areas with temperatures suitable for EGS development
Heat maps are illustrative only and adapted from work by NREL Billy J Roberts (US), Shell (EU), Dr Prame Chopra (AUS)
Red circles indicate localities where the stress conditions are optimal for large scale EGS development
Stress conditions are illustrative only and adapted from internal Geodynamics analysis14
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WELL CAPITALISED WITH STRONG PARTNERS
• $40 M in cash
• Majority ownership of 2 high power deep
drilling rigs
• Rig 100 drilling our 2011 program
• Rig 200 available for lease
• $90 M of Federal Government REDP
funding support for 25 MWe commercial
demonstration plant
• Strong support of Joint Venture partner
Origin Energy and cornerstone investors
Tata Power and Sunsuper/Sentient
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Team and capability
Mr Spence was appointed Chairman
of Geodynamics at the 2010 AGM
after three years experience on the
Board is former COO of Woodside
Energy, brings 30 years plus of Oil
and Gas development experience.
Dr McDonnell has extensive
geothermal experience. Responsible
for development and construction of
two geothermal power stations
totalling 245 MWe with Mighty River
Power.
Mr Ward has over 15 years experience
in oil and gas across both technical and
corporate areas. Former Director and
Partner of Azure Capital, an
independent corporate advisory firm
focused on resources and engineering
clients.
Keith SpenceCHAIRMAN
Geoff WardMANAGING DIRECTOR & CEO
Stuart McDonnellCOO
Strong management
team focused on
delivery.
MANAGEMENT TEAM:
• Global leader with most deep hole 250ºC geothermal drilling experience in granites.
• Expertise in geothermal drilling, reservoir analysis and management, project management,
power engineering and procurement/logistics
• Own strategic rig asset to advance work program
• Completed exhaustive testing and analysis program with leading global consultants to
understand Habanero 3 well issues
TECHNICAL CAPABILITY:
World class team
assembled to bring
resource to fruition.
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INVESTMENT SUMMARY
• Geodynamics provides early stage low cost
exposure to a huge energy resource that has no
future oil price or carbon price risk
• Clear development plan with near-term
milestones to crystallise value
• Value of resource will be recognised as
development milestones are met:
• HSA exploration success - 2011
• 1 MWe pilot plant spinning - early 2012
• Secure commercial customer for demonstration
project
• Strong balance sheet and able to progress
forward program
• Value of resource not reflected in share
price
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• SPP completed successfully - $16.2 M
• Modest capital raising in 2011 will fund
development plan to the next milestones
of demonstrating EGS power
• Planning a placement to institutional
investors early 2011
• Placement will have an attaching option
(ratio to be determined), option timed to
be open to beyond the planned
1 MWe pilot plant commissioning
CAPITAL REQUIREMENTS
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About Origin Energy
• Origin Energy is a top 50 ASX listed company involved in gas and oil exploration and production, power generation and energy retailing
• 140-year history
• Almost 4,000 employees in Australia, New Zealand and the Pacific
• More than 3 million customer accounts in Australia and the Pacific
• More than 105,000 shareholders
• For more information: www.originenergy.com.au/2/About-Origin
• Geodynamics and Origin Energy share two joint ventures to commercialise the Cooper Basin resource:
• Innamincka „Deeps‟ Joint Venture, focused on EGS
- Geodynamics Limited (Operator) –70%
- Origin Energy Geothermal Pty Ltd* –30%
• Innamincka „Shallows‟ Joint Venture, focused on HSA
- Origin Energy Geothermal Pty Ltd* (Operator) – 50%
- Geodynamics Limited – 50%
* A wholly owned subsidiary of Origin Energy Limited (ASX: ORG)
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About Tata Power Group• India‟s largest private sector power utility
• Operating for over ninety years
• Generation capacity in Mumbai, Delhi,
Jojobera, Jharkhand and Karnataka
• Installed generation capacity of 3,000 MW
• Mumbai power business has a unique mix
of Thermal and Hydro Power accounting
for 1797 MW
• For more information on Tata Power‟s
Associates and Joint Venture partners:
www.tatapower.com/aboutus/associates-
jvs.aspx
Substantial Shareholder:
The Tata Power Company Limited – 10.1%
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About The Sentient Group and Sunsuper
The Sentient Group
• Manages over US$1.3 billion in the development of quality metal, mineral and energy assets across the globe through its Cayman-based, 10 year closed-end private equity Sentient Global Resources Funds.
• Experience in the natural resources and investment industries
• Possess skills covering geological exploration, commodity analysis, political risk, capital markets, financial structuring and portfolio management.
• For more information:www.thesentientgroup.com/AboutSentient
Substantial Shareholder:
The Sentient Group – 6.9%
Sunsuper Pty Ltd – 6.8%
Sunsuper Pty Ltd
• Fund established: 1987
• Fund members: over one million
• Funds under management: $14 billion
• A top ten Australian superannuation fund
• For more information:
www.sunsuper.com.au///aboutUs/sunsuper
story.
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