Australia – Geothermal Energy Overview Key success factors

1. Heat Flow Drilling as a Geothermal Exploration ToolChris MatthewsTechnical ManagerAustralian Geothermal Energy AssociationAustralian Geothermal Energy Conference 2010

2. Talk Outline • Australia – Geothermal Energy Overview • Key success factors • Australia’s heat flow and temperature fields • The SA Heat Flow Anomaly • The geothermal exploration hypothesis • Testing the hypothesis • Examples of Australian plays where this has been done • Earth Modelling and the 3D temperature field • Using the model to define resources and deep drill targets

3. Australian Geothermal Energy • Australia – No active volcanism or evidence of widespread vertical advection – dominantly conductive thermal regime • Geothermal exploration over the last ten years has highlighted the lack of comprehensive heat flow data • With no active volcanism all Australian geothermal plays are in “blind” target regions – little or no surface expressions (occasional hot springs in some areas) • Most advanced development – Cooper Basin EGS (GDY) • Other EGS plays include Flinders Ranges region (PTR and TEY), Hunter Valley (GDY), Eastern Tasmania (KEN) • Many southern basins (eg Otway and Gippsland, Perth, Cooper) also targets for HSA

4. The shallower the better • Key factors for success relate to high geothermal gradient, suitable reservoir conditions and a proximal market for the power. • Reservoir and proximal markets beyond the scope of exploration… • Except where very good insulators exist (eg coal seams), high heat flow is the key factor in locating high average geothermal gradients. • Petroleum Basins often have temperature data. This can be used for prospectivity (eg Cooper Basin, Otway Basin) • Higher average geothermal gradients means lower drill costs; where is it hottest? • Both Australian EGS and HSA regions are dominantly conductive heat flow regimes = surface heat flow a reliable indicator… • Beware the heat refraction effect, but also seek it out…

5. Australian Heat Flow and Temperature • Australia – Surface heat flow data on the whole is widely spread • Higher resolution data suggests large variability on small length scales • Only broad prospectivity assessments can be gained from this dataset • CAHFP based on geological factors • SAHFA based on heat flow values Perth Basin Adelaide Geosyncline Published Australian Heat Flow Data • Austherm – uses thermal gradient data and depth to basement as a guide to estimating temperature • Only broad prospectivity assessments can be gained from this dataset Austherm 07

6. Central South Australia Geology • Barossa Complex (1710 Ma) • Curnamona Craton (1710 Ma) • Gawler Craton Olympic Domain Hiltaba Suite and Gawler Range Volcanics (1595 Ma) • Adelaide Geosyncline Sediments (830 – 500 Ma) • Delamerian Fold Belt (490 Ma) • Torrens Hinge Zone • The SAHFA located here

7. SAHFA Potential for High Geothermal Gradients • β = Q / λ • Gradient = Heat Flow / Thermal Conductivity • Surface Heat Flow likely relates to basement heat production • Heat production over ~6 μW/m3 will result in surface heat flows of 100+ mW/m2 • Hiltaba Suite Granites 2.9 – 16.1 μW/m3 • Olympic Domain • (+ Mt Painter Province) • Gawler Range Volcanics 4.01 μW/m3 • Olympic Domain • Barossa Complex 0.5 – 12.2 μW/m3

8. SAHFA Potential for High Geothermal Gradients • β = Q / λ • Gradient = Heat Flow / Thermal Conductivity • Lower conductivity means higher geothermal gradients • Adelaide Geosyncline - sediments 500 – 800 million years old • Harmonic mean of all measured values ~2.8 W/mK (less with temperature correction)

9. The Geothermal Exploration Hypothesis • Theory: The prospective geothermal play in question has: • Likely high heat flow regions • Adequate thermal insulation in sedimentary sequences to result in high average geothermal gradients • Basement rocks at suitable depths for EGS reservoir development • Conclusion and Hypothesis for a given region: • Surface heat flows of 100+mW/m2 and bulk thermal conductivities around 2.8 W/mK should give average geothermal gradients over 40oC/km

10. Testing the Hypothesis • Structured heat flow drilling programmes: • 10 -15 km gridded spacing to capture any lateral heat production/heat flow variations • Thermal conductivity and thermal gradient measurements to allow heat flow to be calculated • Building and characterising the geology in 3D to create an Earth Model for the region • Using the data to model temperature in 3D to allow stored heat to be calculated and deep targets identified that show coincident T and reservoir potential

11. Example of Success: • Parachilna Play South Australia • Torrens Energy Ltd • Heat Flow wells drilled in pattern grid • Depth range 500 to 1000m • Validation of the hypothesis that the Torrens Hinge Zone has regions of high heat flow

12. Earth Model • 3D Geology model built using available and new data: • Drilling data • Seismic • State Magnetic and Gravity data • MT and other geophysical surveys • Earth Model parameters: • 3D Geology • Heat Flow Data • Thermal Conductivity Data • Specific Gravity Data • Specific Heat Capacity

13. The 3D-Temperature Model and Beyond • The 3D Earth Model parameters • can then be used to calculate • a stored heat inferred resource: • E = m c ∆ T • m = specific gravity x volume • c = specific heat capacity • ∆ T = Temperature drop

14. Tantanoola Trough – Panax Geothermal

15. Tantanoola Trough – Panax Geothermal

16. Rendelsham Trough – Panax Geothermal

17. Rivoli Trough – Panax Geothermal

18. Charlton Lemont – KUTh Energy

19. Nicholas Fingal – KUTh Energy

20. The 3D-Temperature Model and Beyond With the input parameters of heat flow, conductivity and geology, the temperature field can be modelled in 3D across an area of interest

21. The 3D-Temperature Model and Beyond Armed with a 3D Earth Model, plus a 3D-TFM temperature model, the areas where the optimum temperatures coincide with the most favourable geology can be predicted… And thus, deep wells targeted

22. Conclusions Australia is non-volcanic, and a dominantly conductive thermal regime, even in hot sedimentary aquifer settings Australian companies have used heat flow, thermal conductivity and thermodynamic principles to model temperature in 3D across a region This data allows temperature to be used to estimate stored heat, and thus resource calculations can be made, and from the temperature field targeting for deep confirmation drilling Acknowledgements Hot Dry Rocks Pty Ltd, Torrens Energy, Panax Geothermal, KUTh Energy