The Perth-based company on Friday said it had agreed to acquire privately owned Australian company Vulcan Geothermal and its 32% interest in the Hungarian JV, which is testing existing, but shut-in or out-of-use, petroleum wells for the generation of geothermal energy.
The partners in the JV include Hungarian oil and gas company and operator MOL, and Icelandic geothermal development business, Enex.
Green Rock said the first two wells, Ortaháza-3 and Ortaháza-5, near Zala County in southwest Hungary, will be tested for hot water production rates over the next eight months to determine the “optimum” development.
During the testing, one well will be used for thermal water production and the other well for injecting the water back into a separate water-bearing horizon, the company said.
The tests are designed to gather detailed data on the wells and water-bearing zones for the subsequent construction and operation of the planned geothermal power plant, it added.
Green Rock said the size of the development would depend on the quality and sustainability of the water flow rate.
The aim of this first project is to install a 2-5MW geothermal power plant, to be commissioned in 2008.
After passing through the power plant, the geothermal water will also provide heat for industrial purposes and a multi-acre greenhouse agricultural operation, Green Rock said.
Additional drilling might expand this output, it said.
The company said the move into Hungary, which has a “strong and growing
demand” for clean, green, renewable energy, is part of its plan to expand its international reputation in the geothermal sector.
“It gives the company an advantageous position in a highly attractive market, as well as a valuable relationship with two major international energy companies,” Green Rock said.
“It is an important step in the company’s strategy to become a major developer of geothermal energy projects.”
The consideration for Vulcan will be the issue of 3.5 million fully paid ordinary Green Rock shares and 3.5 million options to acquire Green Rock shares at an exercise price of 15c per share.
When the markets closed on Friday, Green Rock was trading at 9c/share.
Approval of the shares and options will be sought at the company’s annual general meeting scheduled for November 27.
Green Rock said following this first project, the JV aims to undertake similar geothermal projects in Hungary by utilising some of the other prospective petroleum wells identified by MOL and Enex.
