The hot rocks energy developer also said it had successfully raised $12 million through an equity placement of 12 million shares at $1.00 per share, which would be used to help fund the Lightning Rig.

Chief executive Adrian Williams today said the purchase places the company in “pole position” in the race to develop emissions-free, renewable energy sources in Australia.

“Geodynamics has completed a global evaluation and selected an advanced US built rig ideally suited to drilling the deep geothermal wells it has planned,” Williams said.

“The rig’s first well will be Habanero-3, planned for mid-2007, opening the way for Geodynamics to establish Australia’s first proven hot fractured rock (HFR) geothermal reserves by the end of this year.”

The Queensland-based company said the Lightning Rig would be operated by Australian-owned specialist well servicing and drilling contractor Easternwell Group, which is firmly established in the Cooper Basin where Geodynamics is drilling.

Williams said the “unique” rig had an advanced control system, which would enable precision drilling and an efficient and safe operation.

“A unique modular design allows the rig to be moved from one well to another within three days instead of the usual weeks, using around 30 truckloads instead of the normal 70,” he said.

After drilling work is completed, the company plans to run a six-week production test between Habanero-1 and 3.

Williams said this would provide data to further evaluate the “underground heat exchanger” and enable the formal proving of reserves.

“Drilled with an 8½-inch hole in the granite (as opposed to the previous 6-inch test wells), the new well will also become the first well for our HotRock40 project, a 40MW commercial-scale project designed to demonstrate the huge potential of the Cooper Basin’s hot rocks,” he said.

“This will be key to ultimate commercial development and the establishment of a geothermal energy industry in Australia and the reduction of Australia’s greenhouse gas emissions.”

Lightning Rig is expected to leave the US in May and arrive in Australia by early June.

Geodynamics said it would now move towards a rights issue to raise funds for the purchase of the $32 million rig, the drilling of Habanero-3 and the completion of its production testing program.

It said the program is designed to demonstrate the economic feasibility of heat extraction for the generation of zero emission power.

The placement shares and placement options will be issued in two tranches. The first tranche will comprise 7.8 million shares and 7.8 million options and will be issued on or around February 22.

Goedynamics said the issue of the second tranche, comprising 4.2 million shares and 4.2 million options, will be subject to shareholder approval.

The company said it would hold an extraordinary general meeting of shareholders to be held as soon as possible to approve the issue of the second tranche.

Geodynamics has prime geothermal energy tenements in South Australia’s Cooper Basin, where there are delineated resources with the potential to exceed the output of eight to 10 Snowy Mountains Schemes.

Geodynamics said Australia could have as much as 4500MW of geothermal energy, or about 10% of current demand, by 2030.