AWE Limited (ASX: AWE) has signed a Memorandum of Understanding with a subsidiary of Green Rock Energy Limited (ASX: GRK) to form a joint venture to undertake a drilling program to demonstrate the geothermal energy potential in the Perth Basin, WA.
AWE’s extensive Perth Basin oil and gas exploration and production acreage substantially overlaps Green Rock’s seven Geothermal Exploration Permits (“GEPs”).
AWE will contribute drilling expertise and Perth Basin technical knowledge and could benefit from new data on target hydrocarbon formations located above the hot sedimentary aquifer geothermal targets.
AWE Managing Director, Bruce Clement said, “AWE can bring valuable skills and knowledge of drilling in the Perth Basin to this joint venture. AWE can also acquire valuable information about its conventional and unconventional oil and gas assets through partnering wit h Green Rock in drilling the deeper geothermal targets.”
Mid West Geothermal Power Pty Ltd (“MWGP”), a subsidiary of Green Rock, has made considerable progress in identifying the most prospective geothermal resources since the GEPs were awarded in 2009, including the use of leading edge interpretation of 3D seismic data. MWGP has also been awarded $5.4 million on a 1-for-3 basis from the WA State Government’s Low Emissions Energy Development (“LEED”) Fund towards the demonstration of commercial production of geothermal energy as the first stage of the Mid West Geothermal Power Project.
The initial focus of the AWE/MWGP joint venture will be to secure additional funding for the project from the Commonwealth’s Emerging Renewables Program (“ERP”). ERP funding would complement both LEED and JV funding and enable two test wells to be drilled. AWE would contribute the remainder of drilling costs not covered by LEED and
Selecting the optimal well location for acquiring data on geothermal temperatures and flow rates sufficient for geothermal power generation, and which allows AWE to enhance its assessment of potential hydrocarbon bearing formations, will be a key objective of the Joint Venture. AWE’s main petroleum targets lie above the target geothermal reservoir zones expected at depths of between 3000m and 3500m.
In consideration for joining the joint venture, AWE will pay MWGP up to a total of $250,000 conditional on completion of milestones up to and including the ERP funding being secured.
If the ERP funding is secured, AWE has the right to farm-in for a 50% interest in the most suitable GEP and would become Operator of the drilling program, with geothermal well design and testing overseen by MWGP.
To access over 3,000 of the latest oil projects from across the world visit Projects OGP for free trial today