THE BOURSE WHISPERER: New World Energy and Green Rock Energy have signed a binding Heads of Agreement to merge their Geothermal Exploration Permits in the Mid West region of Western Australia.
Under the terms of the agreement the two companies will formalise a joint venture under which each will acquire a 50 per cent interest in the other’s permits and will contribute equally to project funding.
The joint venture will initially seek to establish a grid‐connected geothermal demonstration project.
Green Rock will operate the joint venture.
“This mutually beneficial joint venture will create a single entity with access to the best geothermal areas in WA that are adjacent to transmission infrastructure and major baseload energy markets.” New World Energy managing director John Libby said in the announcement to the Australian Securities Exchange.
“The collaboration will allow both companies to pool their technical and financial resources to ensure the most timely and cost effective geothermal development.”
Libby’s optimisms was shared by Green Rock Limited managing director Richard Beresford who acknowledged the inroads his new partner had already achieved in the region.
“The Geothermal Power project is a strong contender for State and Commonwealth funding towards drilling the first two wells,” Beresford said.
“Working jointly with New World Energy further strengthens our prospects and we look forward to further progress on funding over the next few months.”
Advantages presented by the formation of the JV identified by New World Energy include:
– the dominant position (with GRK) over the best geothermal areas adjacent to the main electricity grid in WA;
– a lower risk and cost profile as the joint venture will focus on the best geothermal targets and share exploration costs;
– increased potential to attract government funding;
– ability to focus on progressing its Asian conventional geothermal projects and other new opportunities;
– access to GRK’s geothermal expertise, including Director Dr Baumgätner, one of the World’s leading experts on the development and production of deep, non‐magmatic geothermal resources; and
– ability to participate in GRK’s MoU with Pacific Hydro for the development of geothermal resources.