Petratherm Paralana Geothermal Energy

Paralana Geothermal Energy

CLEAN ENERGY FOR FUTURE GENERATIONS

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PARALANA HAS ENORMOUS POTENTIAL Deep below the red sand of Paralana are hot rocks capable of creating enough clean energy to significantly reduce Australia’s reliance on fossil fuels.

Our dedicated team is in the process of reaching those rocks as we work towards creating Australia’s first commercial geothermal energy plant.

Our plan is to tap into this vast renewable energy resource to create a low-impact, fully operational plant delivering zero emission power by 2011.

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What is geothermal energy?

The Earth is constantly generating naturally occurring heat. This heat is known as geothermal heat, and can be used to produce electricity.

Electricity produced by geothermal energy is virtually free of carbon dioxide and other emissions.

The equivalent of a 1000 MW geothermal power plant could save 20 million tonnes of CO2 each year – or 3% of Australia’s current greenhouse gas emissions – by replacing a coal-fired power plant.

As the demand for electricity rises throughout Australia geothermal energy can make a significant contribution.

Geothermal power is the only renewable energy source that can provide long-term base load power, 24/7. Other renewable sources such as wind, solar and wave sources rely on particular environmental conditions and therefore cannot be used for base load generation.

Geoscience Australia estimates that if we were able to extract just one percent of Australia’s geothermal energy, it would be equivalent to 26,000 times Australia’s total annual energy consumption.

And the cost of generating geothermal power will become increasingly cost competitive as global demand for fossil-fired generators rises.

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The Power to Change: Australia’s Geothermal Future report predicts the geothermal industry is likely to create some 17,000 jobs in Australia by 2050.

Geothermal heat comes from the Earth’s early formation more than four billion years ago and from the natural radiogenic decay of minerals creating “hot rocks”.

Australia has some of the world’s best heat producing rocks but for a geothermal energy project to work they need to be buried under 3km to 4km of younger sedimentary rock that acts as a thermal blanket.

Our modeling shows Paralana has all the right credentials.

How it works Our team plans to use Petratherm’s unique Heat Exchanger Within Insulator (HEWI) model at Paralana where the requisite underground heat exchanger is created within the naturally permeable and porous insulating rock above the granite heat source.

Our team then uses hydraulic stimulation, where water is slowly pumped into wells at high pressure to open existing narrow fractures in the insulating rocks to make the geothermal reservoir.

A second well is then drilled to create an underground “heat exchanger” capable of circulating super-heated water.

This is called an Engineered Geothermal System. (EGS) When the exchanger is working, hot water under pressure will flow from a network of production wells into a binary cycle power plant.

The energy is transferred into a secondary working fluid with a heat exchanger. The working fluid boils, producing high-pressure vapour that is used to drive the turbines, coupled to a generator.

Once heat has been removed from the geothermal water, it is re-injected into the reservoir to be heated and used again.

The Paralana 2 deep injection well is being drilled to reach the target hot rocks 3.6km below the earth’s surface.

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BINARY GEOTHERMAL POWER PLANT HEAT EXCHANGER

1km

2km

INSULATOR

3km

~ 200° C ~ 4km

5km

MT PAINTER HIGH HEAT GENERATOR

CURNAMONA HEAT GENERATOR

Petratherm’s unique Heat Exchanger Within Insulator (HEWI) model for an Engineered Geothermal System

The Australian Geothermal Energy Association commissioned energy specialist modelling firm McLennan Magasanik Associates Pty Ltd (MMA) to produce a report estimating the future electricity generation capacity of geothermal energy in 2020 and the price.

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KEY FINDINGS The Australian Geothermal Energy Industry can be expected to provide up to 2200 MW of base-load capacity by 2020 into the National Electricity Market based on current government policy settings;

That capacity potentially represents up to 40% of the Federal Government’s 2020 Renewable Energy Target (RET) of 45,000 GWHs the equivalent of the output of around 6000 MW of wind farms; An estimated $12b would be invested to develop 2,200 MW of installed capacity;

The cost of generating electricity from geothermal resources is expected to move rapidly down the cost curve to reach economies of scale by 2020.

This cost is expected to be lowest of any form of renewable or low emissions energy.

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Why Paralana?

Paralana is an exceptional project with an extensive potential geothermal resource and close proximity to a willing customer.

Our Paralana project is some 600km north of the city of Adelaide in South Australia in an area proving to be ideal for geothermal exploration.

POS

Beverley

SIBL

E TR

ANS

Olympic Dam

SION

PARALANA HOT ROCK TEST SITE

Arkaroola

MIS

LINE

Leigh Creek

Nepabunna

PO

SS

IBL

ET

RA

NS

MI

SS

ION

LIN

E

The Paralana site contains some of the highest heat producing rocks found anywhere in the world. Extensive investigations by our team have revealed that the rocks 3.6km below the surface of Paralana have exceptionally high temperatures of about 200C.

TRANSMISSION LINES 132 KV Line 275 KV Line

Port Augusta

Importantly, at this depth, the bottom of our well is still in the sedimentary rock strata, or the thermal blanket, overlying the high heat producing rocks. This is where we will be creating factures to create our underground reservoir.

Our team expects there may be lower technical risks in circulating fluids through the sedimentary rocks - they are likely to have higher natural flow abilities and to be less chemically reactive. The technology to fracture sedimentary rocks is also better understood.

Geothermal energy from Paralana has the capacity to provide sustainable, emission-free, largescale, base load electricity.

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33 KV Line 100km

Possible 275 KV Line

The proposed Paralana transmission plan

The granite constantly generates heat and is exceptionally large, so the geothermal resource is considered renewable. A local generation plant could potentially use this single energy source for centuries – making it ideal for continual base-load supply.

Commercialising Paralana Paralana is close to a customer at the nearby operating Beverley mine. Petratherm has signed a Memorandum of Understanding with the operator Heathgate Resources, to provide top-up

power to the mine via an initial 7.5 MW plant with the potential to scale up to 30 MW. The Paralana project has a longer term plan to supply large-scale, base-load power into Australia’s national electricity market through entry points at Port Augusta and Olympic Dam. This would be potentially via plants of 260 MW520 MW capacity and two high voltage transmission lines.

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Drilling begins at Paralana

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Why will it work?

The Paralana project is a realistic, market leading geothermal project with lower risk than other similar geothermal projects.

Petratherm has developed a unique geothermal exploration and assessment model that makes the company stand out in the geothermal marketplace.

This model ensures only those sites with the greatest likelihood of hosting hot granites deeply buried below kilometres of good insulation rock and within economically viable distances of customers are identified and drilled.

Our technical strength centred on Petratherm’s Heat Exchanger Within Insulator (HEWI) model also aims to reduce cost, risk and time taken for drilling to bring forward the development of reliable geothermal power generation.

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Paralana is considered the most prospective EGS energy project in Australia with Petratherm signing an important joint venture agreement with leading companies Beach Petroleum and TRUenergy.

These joint venture partners provide Paralana with complementary skills and excellent project management abilities.

This includes extensive experience in drilling, power generation and retailing in the National Electricity Market.

Our project has a realistic long-term path that provides the potential for commercial viability at all stages.

This involves an initial 7.5MW demonstration plant, expanding to 30MW to meet the local electricity market needs for Beverley Mine and scaling up to 260MW to 520MW into the National Electricity Market.

The Paralana Project has received further endorsement and recognition, with its success in gaining a $7M Geothermal Drilling Program (GDP) funding offer.

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Proposed Operations Timeline

2009

2010

2011

2015

2018

2030

Drilling of the first deep well to commence

Drilling of the second deep well to commence

7.5MW plant to be under construction

30MW plant to be established to increase capacity

260MW plant planned with connection to national electricity market

520MW plant planned to further increase capacity

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Why this team?

Our joint venture partners make a strong team with extensive experience in drilling operations and in delivering power to the market.

Petratherm

TRUenergy

Beach Petroleum

Petratherm Limited is a leading explorer and developer of geothermal energy based in Adelaide. The Company was listed on the Australian Stock Exchange in 2004 (ASX Code: PTR) and is actively involved in projects in Australia, Spain and China.

TRUenergy is the third largest private energy business in Australia with an integrated portfolio of generation and retail assets valued at A$5 billion. In 2007, TRUenergy further expanded its renewable energy portfolio through a strategic $57 million commitment to a joint venture with Petratherm, a leading developer of engineered geothermal technology here and overseas.

Beach Petroleum is a significant S&P/ASX200 listed Australian oil and gas producer with 300 exploration and production tenements in Australia, Egypt, New Zealand and Papua New Guinea. This is backed by a highly experienced management team, technical skills base and consistent track record of asset growth – paired with a strong balance sheet and cashflow.

Our flagship Paralana project has the potential to contribute to the broader success of the Australian geothermal energy industry.

The successful demonstration of the HEWI model will have significant impacts for future geothermal projects.

In Spain, Petratherm is set to become the first company to formally develop geothermal energy projects. It is undertaking projects in the key large electricity consuming markets of Madrid and Barcelona.

Petratherm is the only Australian geothermal developer formally endorsed by the Chinese and Australian governments through the Asia-Pacific Partnership, to help China – the world’s fastest growing market for electricity – rapidly progressing its highly promising geothermal energy opportunities.

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TRUenergy is a wholly owned subsidiary of the Hong Kong-based CLP Group, one of the largest publicly listed power businesses in the Asia Pacific region.

In July 2007, TRUenergy launched its Climate Change Strategy, publicly committing to reduce the business’ carbon emissions by sixty percent by 2050. To date, TRUenergy is the only Australian energy utility to publicly commit to such significant and ambitious climate change targets.

The Company is particularly a sector leader in designing, applying and operating modernday exploration, drilling and development technologies within the Cooper Basin.

Partnering this momentum is Beach’s pioneering investment in clean and renewable energy alternatives, reflected in its financial backing for Paralana’s drilling and stimulation of the deep injection and producer wells.

Significantly, Beach was appointed by the Paralana joint venturers as Operator for the two deep wells.

This reflects Beach’s experience across more than 280 tenements in the Cooper-Eromanga Basin in delivering and managing demanding drill schedules and project risk factors to achieve positive cost, time and technical outcomes.

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BE PART OF PARALANA’S BLUE SKY FUTURE

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Joint Venture lead partner Petratherm Ltd ASX: PTR www.petratherm.com.au

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105-106 Greenhill Road Unley, South Australia 5061 Telephone 08 8274 5000

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