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Base-load, national scale, zero emissions 8 TH ANNUAL AUSTOCK CONFERENCE Geoff Ward Managing Director March 2011 Geodynamics For personal use only

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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.

    8

    ~ 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

  • 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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    http://www.sunsuper.com.au/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=65http://www.sunsuper.com.au/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=65

  • 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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  • Supplementary

    Slides

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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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