Coinciding with a site visit from Australian Environment Minister Ian Campbell late last week, the company undertook an integrity test of the production casing at Habanero-2 well to determine the options for its future use.

Campbell requested the site visit as the Federal Government is considering a $75 million grant application submitted by Geodynamics to build its first 40-megawatt power station.

Company secretary Paul Frederiks told PNN’s sister publication, EnvironmentalManagementNews.net, the government wanted to determine how much of a setback the drilling failure had caused the company.

At the same time, Frederiks said Geodynamics had received an indirect comment that the government was impressed with the company's submission for the grant.

Despite the setbacks, Geodynamics managing director Adrian Williams told Petroleum magazine that his company had achieved much in the last few years and the hot rocks sector had a bright future.

“We’re here to stay,” he said.

“The sooner we get back to drilling, the better: our own problems have just been a hiccough along the way – the big story is what the sector’s doing and what the potential is.”

In February 2003, Geodynamics – Australia’s first hot rocks company – spudded its first well, Habanero-1, which was supposed to take 10-12 weeks to reach a target depth of 4900m.

Geodynamics said at the time it expected to complete a second well towards the end of 2003 about 500m from the first, which would complete the circuit.

However, by September of that year, Habanero-1 had still not reached the target depth and Geodynamics began testing at the reduced depth of 4421m.

Habanero-2 did not spud until July 2004, almost a year later than expected. Four months later, the company announced that 245m of drill stem had broken off at 4343m near the bottom of the well.

The company kept trying to free the pipe until the end of June this year when it decided to halt drilling operations. Two weeks later, managing director and chief executive Dr Bertus de Graaf was forced to resign due to “irreconcilable differences” with non-executive board members.

A technical review has now found that the operational techniques used in Habanero-2 were unsuitable for drilling the large sections of granite above the target fracture zone.

The company has now decided to scrap Habanero-2 and drill a new well, Habanero-3.