The company said it carefully selected the licence area in Tenerife – the largest of the seven islands comprising the Canary Islands’ archipelago – after an extensive study.

It said the area was deemed as having the most attractive geology for geothermal power generation and was close to transmission infrastructure.

The new Tenerife target is the third for Petratherm under Spanish jurisdiction, adding to its Madrid and Barcelona projects acquired earlier this year.

Earlier this week, the geothermal explorer announced that Spain's biggest media company Editorial Prensa Iberica (EPI), took up 750,000 Petratherm shares in a recent placement, or just over 1% of the company.

EPI’s Australian representative Manuel Ortigosa Petratherm had people experienced not only in Australian drilling but who understood electricity networks, grid connection and power transmission and marketing.

"We not only like its hot rocks leadership role in Australia, but Petratherm has also taken the first step to become involved in Spain's fledgling geothermal sector, and this has significant appeal to us," Ortigosa said.

Petratherm managing director Terry Kallis said EPI was keen to increase its stake in Petratherm, but only to a point of being a long-term cornerstone and alliance investor and partner, not a majority stakeholder.

Meanwhile, Petratherm is aiming to expand its European footprint.

“Our strategy is to continue a geothermal exploration evaluation program throughout the European Union but with a particular focus on Spain,” Kallis said.

“As a result of this ongoing focus, we do anticipate that our Spanish geothermal portfolio will increase to around seven or eight projects in the near-term.”

In addition, the company is aiming to commercialise its flagship Paralana hot rocks project in South Australia’s Flinders Ranges in 2010 and hopes to carve out a niche business in China.