The new licences – EPG5 known as Tennaperra and EPG6 known as Nappa Merrie – were awarded as part of a state government tender, which totalled six new geothermal exploration licences to be made available for four years.

The company said its Nappa Merrie tenement lies on the Queensland/South Australia border, close to its current tenements at Innamincka. It covers the extension of the Nappa Merrie Trough between the two states.

Granite within the basement of this trough in South Australia contains the only known geothermal resources in Australia, and is where Geodynamics is developing its two-well program at Habanero.

No wells have been drilled to date on the Nappa Merrie tenement, Geodynamics said.

In contrast, Tennaperra contains several petroleum exploration wells, which have drilled into the granite basement to depths of between 1800m and 2500m.

Temperature gradients above the basement range from 45C to 600C per kilometre.

The company plans to undertake an exploration program using existing information and gathering remotely sensed data, such as gravity surveying and reflection seismic profiling, to target basement granite hot spots.

Meanwhile, Geodynamics says drilling is progressing at its Habanero project but at a slower penetration rate than expected.

Down hole surveys have confirmed the new sidetrack achieved its initial angle to distance it from the original well, the company said.

However, an unexpected pressure drop in the down hole turbine forced Geodynamics to pull out of the hole for a full inspection.

“This is a time-consuming exercise with a snubbing unit – 30 hours each way – as all drill stem joints have to pass through numerous blow-out preventers,” managing director Bertus de Graaf said.

“Drilling resumed on Friday, March 31, with down hole pressure restored to specifications.”

Yesterday afternoon, drilling had reached a depth of 12,932 ft (3943 m), he said.