The Habanero-2 well will be drilled 500 metres southwest of the Habanero-1 well in GEL 98.

In a statement the company said, “The Habanero-2 well will be drilled from mid-June to a depth of four and a half kilometres, targeting superhot granites at temperatures of 250 degrees Celsius or more.”

“The well will take between 80 and 100 days to reach its total depth,” added Geodynamics.

Geodynamics MD, Dr Bertus de Graaf, was confident about the prospects of the second well and the Habanero prospect in general.

“The stimulated zone is also nine times larger than we had anticipated and this combination of factors suggests the Habanero field could be a natural geothermal system which can flow under its own pressure,” said Dr de Graaf who confirmed Geodynamics would decide by the end of the year, when all data is in, whether it would proceed with a “small-scale geothermal plant” or go for a third well.

“While a number of key hurdles are yet to be achieved, we are on track for a commencement of maiden production by late in 2006 or early in 2007,” added Dr de Graaf.

The Geodynamics head believes the company had made substantial progress in the methods which would allow for the extraction of heat from deep granites via water circulation. He also feels it is the energy source of the future for Australia.

“We have removed much of the risk associated with this new technology by proving up at depth, a 4.5 kilometre horizontal width of hot granites, the profile necessary to achieve successful heat exchange for a geothermal production well, and have discovered the presence of over-pressures of about 5,200 psi to assist return of heated waters to surface,” said Dr de Graaf.

“The 250-290ºC granite had the potential to transfer large scale energy, equivalent to 50 billion barrels of oil or 10.3 billion tonnes of coal.

“This is energy equal to more than 20 times the known Australian oil reserves, or the equivalent of 40 years of current Australian black coal production [and] our studies show that HDR (hot dry rocks0 thermal energy is more cost competitive than wind or solar power and produces energy all day, every day regardless of weather or darkness,” added Dr de Graaf.