The report determined that the operational techniques used in Habanero-2 were unsuitable for drilling the large sections of granite above the target fracture zone.

It said the stuck drill pipe came as a result of spalling (breaking off of small rock fragments) within the well, caused by the combination of under-balanced drilling with a snubbing unit at low downhole pressure.

Looking ahead, Geodynamics proposes to drill a new well, Habanero-3, with an 8½-inch hole in the granite.

“This is the most technically sound route to achieving our stage one objectives and will also be a platform for subsequent commercial scale wells,” Geodynamics managing director Adrian Williams said.

Initially, the new well will be drilled using a conventional rig with a top-drive, as used successfully for Habanero-1 and for the initial drilling of Habanero-2. If required, the conventional rig will be supported by a snub assist unit when over-pressured fracture zones are encountered.

With the design and planning now underway, Geodynamics expects site work will begin at the Habanero-3 site in the first quarter of next year.

“While this timing is later than we had hoped, it is our view that the integrity of the drilling operation is more important than speed at this point, and that has determined the current planning,” Williams said.

Stage 1 of the company’s business plan is designed to demonstrate the economic extraction of heat from hot fractured rocks. Williams said the company was very close to achieving that milestone.

Meanwhile, the Australian Government is considering a proposal by Geodynamics that is seeking $75 million to assist a 40MW demonstration of hot fractured rock power generation.

Geodynamics says recommendations have now been made to Minister for Resources Ian Macfarlane and Minister for the Environment Ian Campbell, with a decision expected in October.