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Geothermal - A good investment?

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The Mint Man

The Mint Man

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hey ASFers,
Over the last couple of days the Climate change debate has been hoting up in parliment.
Peter Garrett was on lateline talking up the Geothermal industry as well as John Howard making the best part of a 10min answer on the industry when asked about related issues in question time today.

So My question is, Do you think that Geothermal is a good investment? and if so what companies on the sharemarket that have interests in Geothermal would you invest in?
I know of one such company which will be listed later on this year called Greenearth energy, I will be entitled to some of these as I own shares in VPE who own a 33.3% interest. Im quite excited by this project.

Here is a link to the interview of Peter Garrett on lateline last night talking up Geothermal http://www.abc.net.au/reslib/200705/r147417_519856.asx
here is a transcript of the interview, its too long to post here http://www.abc.net.au/lateline/content/2007/s1938273.htm

I believe there is a clear opportunity here as both sides of parliment seem to be pushing it.... just look what happened to SOO after Costello mentioned rebates for solar panels in the budget!

Cheers.

PS: not sure if this is in the correct section as it is a general question/chat however Im also talking about shares....:confused: Ill leave it up to you mods!
 
Since the thread will be discussing/comparing different geothermal stocks it's probably best in 'ASX Stock Chat'.
 
The Mint Man said:
Do you think that Geothermal is a good investment?
Click to expand...

I think so. I invested in Geodynamics when they listed in 2002 and never looked back.

I posted some of the HFR companies over here.

GDY : Geodynamics (http://www.geodynamics.com.au)
PTR: Petratherm (http://www.petratherm.com.au/)
GRK: Green Rock Energy (http://www.greenrock.com.au/)
GHT: Geothermal Resources (http://www.geothermal-resources.com.au/)
EDE: Eden Energy (http://www.edenenergy.com.au/)

Since then, Torrens Energy (ASX:TEY) has also come aboard.

Interesting day today with Labor's proposed couple of dollars should they win 'power'.

EDE + 1.4%
GDY + 7.8%
GHT + 10.3%
GRK + 28.1%
PTR + 18.5%
TEY + 14.8%
 
I am not sure if they will be a good investment or not, but I do invest in them because to me it is a logical progression. We just need progressive leaders to pay upfront for the infrastructure. The main source of hot rock energy (the most renewable of all geothermals I understand) are isolated areas so they need to access to the electrical grid. I do think this should be a government expense. But first things first, they need to prove the technology. They are getting there.

With England talking about laying undersea cables to carry hot rock energy from Iceland I can't see why this country should have an issue with a few power lines.

Apparently in Australia we have a hot rock energy resource that could provide hundreds of years of clean electricity. We would be foolish not to exploit it with current concerns on greenhouse emmissions.

The stocks I have on my watchlist and/or portfolio are

GEODYNAMICS GDY
TORRENS TEY
PETRATHERM PTR
GEOTHERMAL GHT
GREEN ROCK GRK

I have read lot of reports on hot rock energy and learned a lot yet still I have no idea how to compare one stock from another. I know the industry is calling for a jorc style reporting so that investors can make informed decisions. At the moment it seem closeness to the electric grid and potential or already established contracts with the electricity companies are viewed as attractive.


My little spec Green Rock has a possbile customer with BHP, and also a relationship with the CSIRO. They have also had funding frpm the World Bank. It seems to be an industry that can obtain funds from funding rather than investors.

Still it is an industry in infancy, but hopefully very soon it will take great leaps forward.
 
Geodynamics (GDY) and Beach Petroleum (BPT) both have interests in Geothermal power. Geodynamics is 20% owned by Orgin an Woodside if I remember correctly.
 
Beach Petroleum, didnt realise, hear a lot of good about thät stock.

It is amazing when you read the reports, the total resource measured so far is 842 times our current annual electricity usuage.

Geodynamics is the only one I probably would not buy right now because it has has such a great run. Still, who would ever know.
 
Spaghetti said:
B
Geodynamics is the only one I probably would not buy right now because it has has such a great run.
Click to expand...

I think that is probably because GDY is the most advanced. They are the only company in Australia that has actually drilled two wells to the full depth, proven the temperature gradient, shown that the heat exchanger will not lose water and is horizontally fractured, done hydraulic stimulation and started a circulation test (although the flows were restricted due to a fallen bridge plug). This has significantly reduced many of the risks for shareholders.

Geodynamics through subsidiary Geodynamics Power Systems also have the exclusive license for Kalina Cycle technology which is useful for increasing the efficiency of HFR binary geothermal plants or other waste heat plants.

Most of the other players are still exploring, and drilling wells to prove the temperature gradient. The temperature gradient may not be as good as expected. They may hit rock that isn't horizontally fractured, or a reservoir that leaks and would require lots of water to keep the system running. The hydraulic stimulation of the reservoir is one of the riskiest parts of development.
 
YChromosone

When I looked at the ANU charts my first geographical area pick was Innamincka as the average temp was so high. And Geodynamics is in that area. So little wonder they have done well.

Would you know at all (or anyone) who would be the major player in QLD. It seems the SA government has been the most pro-active in hot rock energy yet the maps would suggest the bulk of the energy is in QLD. I would mind supporting a company starrting out in the Longreach or far south west areas of QLD.
 
Spaghetti said:
Would you know at all (or anyone) who would be the major player in QLD.
Click to expand...

I believe the tenders have been disappointing in QLD. Six sites went to tender and only five had bids - one was withdrawn with no interest at all. Only Geodynamics (ASX:GDY) and red Hot Rocks (Private Company) were successful in obtaining licenses.

GL2005A (located between Boulia and Winton) – Red Hot Rocks Pty Ltd;
GLR005B (located between Boulia and Winton) – Red Hot Rocks Pty Ltd;
GLR005D (located west of Thargomindah) – Red Hot Rocks Pty Ltd;
GLR005E (located west of Thargomindah) – Geodynamics Limited; and
GLR005F (located west of Thargomindah) – Geodynamics Limited

Part of the problem in Queensland is poor infrastructure. Even though Geodynamic's have two licenses for QLD,I don't believe there is any urgency for them to start exploring, rather they will continue to focus on the Cooper Basin site.
 
YChromozome said:
I believe the tenders have been disappointing in QLD. Six sites went to tender and only five had bids - one was withdrawn with no interest at all. Only Geodynamics (ASX:GDY) and red Hot Rocks (Private Company) were successful in obtaining licenses.

GL2005A (located between Boulia and Winton) – Red Hot Rocks Pty Ltd;
GLR005B (located between Boulia and Winton) – Red Hot Rocks Pty Ltd;
GLR005D (located west of Thargomindah) – Red Hot Rocks Pty Ltd;
GLR005E (located west of Thargomindah) – Geodynamics Limited; and
GLR005F (located west of Thargomindah) – Geodynamics Limited

Part of the problem in Queensland is poor infrastructure. Even though Geodynamic's have two licenses for QLD,I don't believe there is any urgency for them to start exploring, rather they will continue to focus on the Cooper Basin site.
Click to expand...

Cheers YChromozome.
 
I have read a very SPECULATIVE comment that any Australian company that becomes leader in Hot rock energy will make all past energy companies worldwide look like ants. Seeing Australia is only looking to hot rock energy to provide 10% of it's energy in the short term that maybe a a few decades or more away and I may well be dead by then.

Just googled news on hot rock energy and results are turning up for Canada and the US. Last week it was the UK. There is growing interest and a bandwagon effect may start if world leaders start to embrace this energy as our South Australian government has. And now Rudd.

So perhaps a very good investment. Hard part - picking the company.
 
Eden energy (EDE) have a number of alternative energy projects, with geothermal amongst them. Have a look at their website, its amazing the patents and technology they own.
Very good LT investment imo
 
There is a liftout in the Weekend Australian on green energy with an article about Hot Rocks.

One point it makes is that we may have no other choice but hot rocks to feed our growing energy needs. This is if the drought continues, It has already on it's side no emissions, no fuel and no waste so it seems a HUGE goer to me. It recycles the water it uses and the hydro schemes and coal schemes we have seem to deplete water at alarmimg rates and brownouts are on the cards for next year if we do not get enough rain.

So lets rock, hot rocks! Maybe the next uranium.

(well I gues it is uranium really, decaying where it should, undergound. No need a find a home for the waste)
 
Spaghetti said:
There is a liftout in the Weekend Australian on green energy with an article about Hot Rocks.

One point it makes is that we may have no other choice but hot rocks to feed our growing energy needs.
Click to expand...
I don't think we're too far from the point where we've got not choice but to stop using, or at least stop expanding, conventional energy sources.

Oil and gas both have the problem of rising global demand, pricing cartels either in operation (oil) or likely to be (gas) and falling discovery rates that are below current production levels.

But "Australia has 100 years worth of gas" I hear you say! Consider that most of the gas in WA and NT, that is most of the gas in Australia, is likely to be exported and that changes the situation somewhat. Add in X% annual growth in demand, propsed Queensland gas exports, use of gas to replace coal and oil and it becomes rather clear that it's not the plentiful resource that many imagine. It is, in reality, little different to oil but with a time lag.

For the record, oil production peak to date was in May 2005 and the trend has been DOWN since then. Rising demand, falling production...

There's still plenty of coal and IMO we'll end up using more of it once the problems with oil and gas become undeniable and economically threatening. That will be until climate change is either disproven (not impossible) or the evidence becomes overwhelming.

At that point, which could be less than two decades away, we're effectively locked out of developing the fossil fuels which provide 90% of our electricity (and virtually all other energy) today. Sure, we'll still have the existing plants for a while but a supply gap will be rapidly opening up. Only genuinely clean coal, nuclear or renewables will fill it.:2twocents
 
Every geothermal company closed today in the red :(. I hold a few only due to my belief in carbon taxing and climate change.

ranged from TEY -7.78% to GRK -2.7% (after a stunning day yesterday thats not too bad imo)

Cant offer any info as my research has been fairly light. I think the degree these companies prosper (and how quickly) will unfortunalty be bound on political reasons as opposed to purely economic reasons which make valueing them difficult.
 
Egabeava said:
Hi Guys, here is an interesting article on green energy from The Age. I am a holder of GDY and although it has had a stellar run this last month, IMO they will need some positive news to continue! http://www.theage.com.au/news/investment/green-technology-gets-hotter/2007/06/11/1181414207082.html
Click to expand...
Good article that, its worth the read.
By the sounds of it things are looking positive for green energy, 2012 will be a good year as it is expected that carbon trading will start then. Although by then the benefits will probably already be priced in to these companies. Definitly worth keeping an eye on this sector IMO:2twocents

By the way the article is 3 pages long, I almost closed the window before noticing that.

Cheers
 

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