Reported from Australia, “Panax Geothermal (ASX: PAX) has met all of the required criteria under the Department of Resources, Energy and Tourism guidelines for a $7 million grant for the Tirrawarra Geothermal Project. Panax’s application will now proceed to a full merit assessment.

The Tirrawarra Geothermal Project is characterized by the existence of a Measured Geothermal Resource totaling 11,000 PJ – one of only three such geothermal resources in Australia. And two of these are owned by Panax.

In addition to the Measured Geothermal Resource, the Tirrawarra Project also has a substantial Indicated Geothermal Resource, amounting to an estimated 30,000 PJ.

Tirrawarra also benefits from secure access to a firm drilling rig slot with Weatherford International Drilling – including the availability of 2 suitable drilling rigs that would be able to be utilized for the Tirrawarra Geothermal Project.

Tirrawarra is a Hot Sedimentary Aquifer (“HSA”) Project which has a low risk and fast development profile. The low risk attributes relate to the focus on producing hot water from an existing reservoir. The fast development timeline is as a result of the fact that the initial reserves can be established on completion of the first well.

Panax’s initial focus is on developing small to medium plants for generating base-load power to replace local high cost diesel power currently used for oil/gas production and transport (pumps and pipelines, compressors etc) in the nearby Moomba region.

This is despite the current Measured Resource being sufficiently large size for the generation of zero-emission base-load power.

Aiding the cause, Panax has an extensive data base of information on the Tirrawarra tenement, including logs of more than 100 petroleum wells as well as extensive 3D seismic cover. Target temperatures are in the range of 155OC to 160OC, at depths of 2,750 metres to 3,500 metres. The highest recorded downhole temperature in the tenement is 157OC at 2,919 metres.

As a result of these factors, much of the exploration risk has been eliminated, a legacy of previous oil and gas exploration and development.

Source: company announcement via Proactive Investors