Geodynamics Completes Proof of Concept

Eco Investor April 2009 Edition

Geodynamics (ASX: GDY) has successfully completed the ‘Proof of Concept’ program for its geothermal technology, marking the achievement of Stage 1 of the company’s business plan.

The result follows the completion of the closed loop test, and its analysis and independent validation. The closed loop test confirmed the previously established large size of the Habanero stimulated heat reservoir. Geodynamics said modeling of wells theoretically located at the extremities of the Habanero stimulated zone showed that the wells would be capable of extracting more than 40 megawatts of thermal energy for over 20 years with only a 5°C temperature draw-down for circulation rates higher than 70 kilograms per second.

Circulation rates during closed loop testing between Habanero 1 and 3 reached a maximum of 15.5 kg per second. Production rates of 25 kg per second have been achieved from Habanero 3. Although these flow rates have not approached 70 kg per second at this time, the results are an indication of the heat capacity of the reservoir, said the company.

Geodynamics can now move forward with its focus solely on Stage 2 of the business plan – Commercial Demonstration.

The closed loop test was the culmination of six years of work and the Proof of Concept demonstrated:

* Resource definition

* Ability to drill and complete wells

* Ability to hydraulically stimulate fractures

* Ability to develop a substantial reservoir volume

* Achievement of well productivity and injectivity

* Confirmation of fluid circulation between production and injection wells

* Forecasting resource degradation

* Mitigation of currently identified operational constraints

* Absence of adverse environmental impacts.

The company said these achievements do not necessarily imply economic viability at this time. Commercial demonstration will among other things focus on improving drilling performance and well costs. It will demonstrate the ability to stimulate and circulate through multiple zones in the granite to enhance well productivity to required levels and increase the recoverable resource base.