RNE - ReNu Energy

[purple]

Re: GDY - Geodynamics Limited

yup, Stormbringer, GDY's thge most advanced of the geo thermal stocks. haven't done much research into GDY myself...

when's the JORC coming out, any idea?

 

[BankRoller]

Re: GDY - Geodynamics Limited

I've been reading into a few other geotherm up and comers. GRK is a world bank subsidised company. I've been reading into their projects.

geotherms: GRK, PTR, GHT.

 

[stormbringer]

Re: GDY - Geodynamics Limited

If they commence drilling sometime in august, and are successful without to many delay's, then they should be able to complete the circulation test around october-november, which will gives us the defined geothermal resource.

As bankroller has stated, there are many others who are planning to develope this resource, and I for one will be watch their developments closely. Petrotherm I think will be the next to step up to the mark, more than likely. They tend to blow their own horn alot, when actually all they have done is some modelling and tested for the relative strength of the heat source. Still early days for them, but I think ultimately they will succeed in their desired goals. If I was a gambling man, I’d by them tomorrow, but would prefer to see them successfully drill their first hole before investing the hard earnt cash.

 

[stormbringer]

Re: GDY - Geodynamics Limited

Looking at GWR, they are the dark horse here, well underway in their plans and also in the process of securing some interesting tenements, watch closely, they might be in the running to take second place.

 

[purple]

Re: GDY - Geodynamics Limited

sometimes the companies that tend to loudly proclaim their molehills speed along a little quicker than the companies with quiet mountains.

just the nature of the market which is so thirsty for news.

the geothermals and renewables as a whole has undergone a little consolidation. i think they will come back with a vengeance soon and we'll see some strong price increases.

 

[purple]

Re: GDY - Geodynamics Limited

GWR? is that ticker right?

GWR:AU
Golden West Resources Ltd
Gold mining?

or have they diversified theirgold mining into geothermal mining?

 

[stormbringer]

Re: GDY - Geodynamics Limited

lol, sorry m8, should have read GHT. BTW, take a look at GDY's chart, looking good for a possible breakout. Let me know what u think. As you've stated, could be some upward momentum for the sector, time will tell.

 

[purple]

Re: GDY - Geodynamics Limited

ok having a look at the sector, and the geothermals themselves, GDY appears to have been the strongest in this consolidation period. some liek TEY have dropped to near 1/2 of their year highs.

still poor volume though for the sector overall.

 

[purple]

Re: GDY - Geodynamics Limited

table with sector comparison

table with sector comparison

table with sector comparison

table with sector comparison

 

[purple]

Re: GDY - Geodynamics Limited

chartwise, I can't really say...it appears to be the old symm. triangle forming, but I would rest more on the fundamentals of the sector as a whole...

and also the gathering green movements

and also John/Kevin to lock horns and stir up some dust about carbon trading, credits to geothermals etc soon!!

 

[Egabeava]

Re: GDY - Geodynamics Limited

Here's an article on GDY, looking forward for the results. http://www.theage.com.au/news/busin...es-hot-interest/2007/08/12/1186857344494.html

 

[eucalyptus]

Re: GDY - Geodynamics Limited

Hi, I haven't used this forum before, but feel like a good old cut and paste job is in order. I took this from HC, but it is relevant to the discussions on this thread:

"For the emerging geothermal sector, there are two distinct phases of challenges that must be encountered. In the short term, there is the technical risk of drilling and managing temperatures/pressures. Upon completion of the geothermal well, establishing a reservoir that demonstrates constant flow and near-constant temperatures will be critical. From there, surface operations, such as producing electrons from heat, are well established, and not bound by the same risk-premiums that will be attached to earlier phases.

The real problem, one that has until now inhibited the entire industry, is locating an area with the specific qualities required for economic heat extraction. With the heat exchange occuring up to 5000m underground, it is impossible to predict the quality of the resource before target depth is reached.

The cost of deep drilling runs upward of several million dollars per well, and more if delays are encountered. There is no way to infer anything but the temperature of a full scale well, and even this inference is a guideline only. It will continue to be difficult for GEO companies to simply acquire a series of GELs and prove an extractable resource. The cost is inhibitive, and the success rate is not understood, but could be estimated to be low.

Unless the right combination of temperature, pressure, flow rates, depth, containabilty (to operate as a closed loop), and fracturing is displayed, the viabilty of the operation will be compromised. The proven exponenial correlation between temperature and output is well understood. If temperatures towards the high two-hundreds are not achieved, a project will most likely generate too few electrons for the static capex.

This inhibitive entry barrier has been overcome once. There is one exception to the logic, and that is GDY.

GDY sourced what were understood to be the hottest granite bodies in Australia. Through a combination of foresight and sheer luck, they struck upon a resource that is unprecedented in quality. The Inamincka project showed temperatures that approach 300C, and natural fractures that allowed strong communication within the system. The system itself is actually part of a reservoir that is full of water at enormous pressure, proving that the reservoir is fully contained and will operate as a closed loop. The company had intended, at first, to simply intersect dry rocks, and pump many millions of litres of water into the system as the geofluid. This huge cost, and the risks, have been romoved entirely.

To have established a resource like this was, in the eyes of many, an absolute fluke. I would never have expected to see the quality displayed by HAB1,2. It is an advantage that is so thoroughly huge, it is difficult to assess and price the implications. The barrier to entry that is very real will continue to suffocate the sector as a whole, but GDY has entire immunity.

Genuine dominance in a sector that is about to see proof-of-concept makes GDY an attractive company, and the current sell down only enhances the value and upside offered.

With the upcoming need for national power capacity increases, and the difficulty in meeting this bulk with anything but coal or geothermal, the lack of alternative defined and viable geothermal resources puts GDY in a unique position over the coming years.

There is no alternative exposure to the geothermal sector that has the required geological characteristics to provide geothermal energy at around $45/MWh.

I cannot reasonably tell holders they should continue to hold, but only point out that GDY holds a strong geological advantage in a sector that gives every indicator of success. The time will come when the impending business model GDY are developing will attract investment from the wider market community. The fundamentals on this company are outstanding, and with so much else going on (Kalina, Rig, Erorka, REDI, Flow tests, Demo Plant, Scaling-Up, etc.) the good times of cheap buying will not be sustainable."


There is little qusetion that GDY is the only geothermal company that is realistically positioned to exploit commercially viable geothermal resources. GDY has just today demonstrated successful drilling, as was outlined in the update.

This is by far the most appropriate, least risky and most promising exposure to the geothermal sector, no contest whatsoever.

Alternatives (pure Geos) have vastly inferior geothermal resources, and all thermal data indicates a business model that will not be competitive with nuclear. GDY will continue it's ascent to complete sector dominance.

 

[eucalyptus]

Re: GDY - Geodynamics Limited

Further to that, also copied from HC,

"Making the assumption that drilling and flow tests proceed successfully, there is ongoing geological upside. The flow tests and demonstration plant construction will not be static phases for the Lightning Rig. The management are acutely aware of the need to retain the services of EWS, and enhance their skills with continuous drilling. This, and an ample budget, will allow GDY to drill continuously over the coming months and years.

HAB3 is intersecting a geological unit that is unsurpassed in quality, but it is unlikely that the conditions it displays are the most promising in the GELs. With multiple wells, planned, the probability of HAB3 intersecting the best combination of fracturing and volume is low. Despite the incredibly encouraging results, and the previous flow rates that were too high for normal prediction, the best is overwhelmingly likely yet to come.

Further HAB wells will intersect a variety of conditions, all based around the natural fractured reservoir system that permeates the area. By natural variation, some of the wells will allow for much higher flow rates and significantly higher economic extraction of heat.

By allowing drilling to continue, GDY will not only extend the resource, but it is very likely that the resource will be upgraded in grade to allow for a more efficient extraction."

 

[eucalyptus]

Re: GDY - Geodynamics Limited

and to put numbers to it....


"The costs for the production are almost entirely based on intitial capex, with ongoing opex being low, and fuel costs being negligable. The $/MWh is largely derived form how many electrons you can squeeze out of a fixed cost well/power plant. A higher temperature allows for the production of more electrons per dollar spent on capex/opex.

An example is outlined below, using GRK as a case study, though the logic applies broadly across the industry.

(The ratio of MWthermal:MWelectric is a standard calculation designed by the Massachusetts Institute of Technology, and are where I base my calculations from. All other details are derived form the companies themselves.)

At 210C (the reasonable and expected final target for GRK), there will be roughly $85/MWh in electricity costs. On top of this, there will is about $5/MWh operating costs (using GDY's figure, which should be fairly constant across operations). This is a total of $90/MWh. Transmission costs will be minimal enough not to include in a price calculation.

This price is not competitive with nuclear, the other realistic option for sustainable base-load energy production.

For comparison, GDY, who have a temperature target of 270C-290C, will be able to produce the electricity much cheaper and more competitively. From 210C to 270C, there is in increase in power output of over 100%. It will cost GDY roughly $40/MWh in electricity costs, $5/MWh in operating costs, and $8 in transmission costs, for a total of $53/MWh. Using a figure of 290C brings this total down to around $45/MWh.

Essentially, capex will be the same across the board, as will opex. The calculations above ONLY take temperature into consideration. The do not even allow upside/downside for flow rates, reservoir volume, reservoir surface area, natural saturation, etc.

To say GDY will ONLY produce electricity 50% cheaper than the nearest competitior assumes the competitor establishes a project with the same world-leading characteristics as the Habanero project. The probability of such a resource being repeated are low, and, as such, to say GDY will produce electrons for 50% cheaper is quite a conservative statement.

On top of the natural geological advantage, there is of course the Kalina Cycle, and the further increase in efficiency that may be upwards of 20%. This has not been used in calculations simply to outline the quality of the geothermal resource itself.

These facts are not hidden from the market. "

 

[eucalyptus]

Re: GDY - Geodynamics Limited

regarding upcoming opportunities....

"On top of thermal efficiencies, there will be the income from our 47% stake in Exorka International. The income generated will increase our potential dividend per MWh generated.

Many of the most exciting technologies that could utilise geothermal are still emerging. Australia's vast reserves of vanadium are beginning to be exploited as excellent energy storage devices (as being demonstrated at an Australian windfarm). This technology is in complete infancy, but the scope for the services of companies like Exorka International would be large. Sink a geothermal well, set up a 15MW station, charge the vanadium on site - bingo, you have an exportable energy product for national and global distribution.

Not a next-day development, but an illustration of the upcoming need for geothermal in both niche and mainstream applications."

 

[eucalyptus]

Re: GDY - Geodynamics Limited

and of course there is ongoing upside:


"One large benefit for GDY holders is that the HAB1/HAB2 system demonstrated multiple sites for heat exchange. The first major fracture region for heat exchange was intersected a few hundred metres from the total depth of the well, but beneath that (a couple of hundred metres, from memory) was another, even larger area of fracturing, with a correspondingly larger heat exchanger surface area/volume. The SA/V ratio has a direct impact upon efficiency, with the SA playing the major role in heat exchange, and the volume influencing the flow rates.

The results are counter-intuitive. At increasing depth, there are decreasing unloading forces, which are the primary cause of natural fractures. Under normal circumstances, the pursuit of higher temperatures/pressures/flow rates would be hindered by the decreasing availability of suitable heat exchange zones. Not so for GDY.

The current trend, demonstrated through drilling, shows an increase in permeability as depth increases. The target depth of HAB3 depends on how much risk the company is willing to accept at the time (unfortunately, risk increases exponentially with depth, and the lightning rig is no exception). Current eveidence would suggest that the deeper, hotter HAB3 may intersect a reservoir significantly larger in SA/volume than the previous intersections.

GDY has demonstrated many unique exceptions to the rules, but this one has a very large impact on the viability of the project. You can have huge temperatures and pressures, but they won't mean anything if they don't have sufficient SA for heat exchange, and volume for unimpeded flow.

Multiple heat exchangers will also facilitate selective generation output, which may be very useful as resources eventually become depleted. New areas of exchange can be utilised, and flow restricted, without the need for capital-intensive drilling.

From where the company is right now, there is large upside for reservoir upgrades, and minimal downside, as, at the very least, the world's largest HFR reservoir will be one of the first structures intersected by HAB3."

 

[eucalyptus]

Re: GDY - Geodynamics Limited

On scope:

"A point to note would be the absence of Lightning Rig propaganda. It is a point easily overlooked, but GDY have never detailed the specific capabilities and design outlines of the Lightning Rig. The team are playing this out low key, seeding as little information to the market as possible. Besides a few site-inspections (Westpac Reps were recently onsite) and the odd ad (I have only seen one, in Petroleum magazine), this has been a remarkably quiet lead-up to drilling. To learn more about the lightning rig took a good chunk of my time, and that was just to find the info. My point is this - the industry is riddled with doubt and miscalculations. Information comes from one or two limited sources, and is incomplete to say the least. With details on the rig being difficult to acquire, and no precedent to the drilling GDY are proposing, wiser investors have no choice but to attach risk premiums to the drilling process. A similar lack of information clouds the flow test.

To address your comment more specifically, it is difficult, at this stage, to place an upper valuation limit on GDY's Cooper Basin operations. Despite the palpable fear that drilling may fail, it does not seem the likely outcome to me, and a successful flow test will allow GDY to prove a bankable resource. Through a combination of equity and debt financing, the initial capex for the first ~500MW will see GDY emerge with a multi-billion dollar business, which will continue to scale up until supply reaches demand (which could arguably take hundreds of years).

Exactly how many billions it is worth will be determined by exchanger efficiencies and conversion technologies (both of which GDY dominate). The point in focus is that any valuation applied now merely represents a chosen moment in the dynamic future of this company, as reserves are expanded and capacity replicated horizontally. Inamincka alone can support tens of thousands of MW, and that is before resource expansion and reserve upgrades.

The inability to cap the upside of a successful GDY will see a successful flow test provide multiples from this SP. Once the development risk is removed, there will be no obstacles of equal risk to threaten the viability. From there, the NPV of the project will rush higher appropriately.

Stay well and be merry, we have an interesting week on the market."

 

[adambosso]

Re: GDY - Geodynamics Limited

October 29, 2007 Media Release
Geodynamics and Origin Energy Agree On $105M Joint Venture
Geodynamics Limited will seek shareholder approval for Origin Energy Ltd to farm-in to
its South Australian geothermal tenements as part of a $105.6 million deal.
The two companies have executed a binding Heads of Agreement for Origin to farm-in
to 30 per cent of Geodynamics’ SA geothermal tenements, along with 30 per cent of its
Lightning drilling rig.
In addition to its 30% share of on-going project expenditure, Origin will contribute up to
$105.6 million towards all project cash costs comprising $96 million plus an additional
$9.6 million should Geodynamics, as Operator, complete its Stage One ‘proof of
concept’ phase by 31 March 2008 within a defined budget.
Origin also intends to retain its current equity interest in Geodynamics of approximately
10 per cent.
Geodynamics Chairman Martin Albrecht said the farm-in was an important step in the
Company’s plans to develop the vast Cooper Basin resource.
“Farm-in agreements are common for companies like Geodynamics with large natural
resources requiring large capital investment,” he said.
Mr Albrecht said his Board unanimously supported the proposal as a prudent step in
minimising risk for all shareholders and giving greater certainty in the provision of
funding for the next stages of the development of the Cooper Basin resource. The
Board would therefore be seeking shareholder approval at an Extraordinary General
Meeting to be held in December.
“Geodynamics view this proposed farm-in as an enormous vote of confidence from
Origin in what we have achieved to date,” he said.
“We are excited that we have a recognised partner with a quality balance sheet and
reputation for the long-term commercialisation journey.
“If approved by shareholders, this deal will enable the Company to accelerate its
commercialisation plans to the next stage of its business development with funding for
the Cooper Basin project in place.”
The South Australian tenements and drilling rig will be placed into an unincorporated
joint venture structure and Geodynamics will be the operator with 70 per cent
participation.

lovely news

 

[mlevit]

Re: GDY - Geodynamics Limited

I am currently looking in investing into the geothermal industry and have started looking at GDY only recently.

I have a few questions for those who know more than me

1. I terms of geothermal energy, when would you be expecting a fairly large increase in both production and use Australia?

2. At what price would you recommend to invest in GDY?

3. How much growth would you expect in the next few years or so? Next decade? and by 2020?

 

[greenfs]

Re: GDY - Geodynamics Limited

I am currently looking in investing into the geothermal industry and have started looking at GDY only recently.

I have a few questions for those who know more than me

1. I terms of geothermal energy, when would you be expecting a fairly large increase in both production and use Australia?

2. At what price would you recommend to invest in GDY?

3. How much growth would you expect in the next few years or so? Next decade? and by 2020?

Regarding questions 1 & 3 I would suggest you do your own research by reading extensively through GDY's website and by using Google or some other search engine.

Regarding questiion 2 I note that Origin Energy as a 10% shareholder has very recently confirmed its strong support for GDY.

However given there is no established revenue stream and therefore no positive cash flows, it is impossible to say what is a good price at which to buy into this stock. However, the longer you wait the lower the risk factor, but also you will get less return on your investment.

My best guess is that you should buy some shares now and consider continuing to add more over time so that you achive an average cost of buying the stock. Good luck.