Geodynamics (ASX:GDY) should trade firmer after signing an Exclusivity Agreement with Beach Energy (ASX:BPT) with regards to its geothermal exploration tenements at Innamincka, South Australia.
Geodynamics has granted Beach an exclusive right to negotiate a farm-in agreement to its geothermal licences for up to an 18 month period.
During the Exclusivity Period, Geodynamics will undertake a research program to investigate the use of geothermal resources to supply heat and power to potential gas developments in the area.
This will include the potential to contribute to the management of carbon dioxide in natural gas production by using it as a heat transfer fluid in the geothermal process.
This initial research program is to be completed within 12 months.
Beach Energy will contribute $200,000 towards the cost of the research program, with this amount fully refundable if a farm-in agreement is not completed by the end of the Exclusivity Period.
The research project will examine some new and innovative ways of achieving these benefits building on the work undertaken during the Pilot Plant trial and drilling program at Habanero.
This is an important first step in strengthening ties with Beach as a potential customer and partner.
In March, Geodynamics agreed to sell its Habanero logistics and operational support base to Beach for $1.5 million.
Geodynamics will retain ownership of all geothermal permits associated with its Innamincka granite resource and ownership and responsibility for geothermal wells, brine pipelines and geothermal facilities including the 1 MWe Habanero Pilot Plant.
The sale is conditional upon Geodynamics completing its current plug and abandon program of the Celsius 1, Habanero 2 and Habanero 3 wells and to Beach securing its facilities licence from the South Australian Government.
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