The well bore has been blocked since late 2004 when Geodynamics lost 245m of drill string at a depth of 4343m as it was preparing to conduct the final drill bit run.

The drill stem has been parted near the bottom of the casing using a severing tool at a depth of 3765m. But this was 436m above the stuck drill bit, considerably higher than aimed for, owing to restriction in the drill stem that prevented setting the explosive charge at a greater depth.

“On the basis of the slow and costly progress made to date and taking into account the remaining risks involved in completing the side track with the current onsite equipment, it was reluctantly decided to stop the drilling operations,” Geodynamics said.

“Geodynamics has further decided to restore the connection with the heat exchanger using a conventional drilling rig. Geodynamics has recently obtained an option on a suitable rig, which will become available in the last quarter of this calendar year.”

The company is considering drilling another side track from near the bottom of the casing in Habanero-2, starting drilling at a depth of about 3750m.

“A similar side track (Habanero-2 ST-1) was previously drilled in 23 days,” Geodynamics said.

“Once the new hole approaches the depth of the underground heat exchanger, specialised equipment (snub assist unit) will be used to avoid damaging the underground heat exchanger with drilling mud.”

The company conceded that having to stop the current snub drilling operations was a major setback for all stakeholders.

“It will delay the proof of economic heat extraction from the extensive geothermal resources underlying the Cooper Basin,” Geodynamics said.

But it argued that this should be seen as a delay rather than a threat to the viability of the geothermal project.

“All drilling engineering experts consulted by the company to date agree that the drilling problems encountered will be overcome and that experience has shown that drilling costs can be significantly reduced over time,” Geodynamics said.

It said that as a pioneer, the company has learned many valuable lessons on drilling fully under-balanced in the high pressure/temperature environment of the target hot granites and this experience would be of great value for the future development of the Cooper Basin Hot Fractured Rock geothermal project.

“The underground heat exchanger we have developed remains intact with all evidence pointing to success once the connection with it is restored,” Geodynamics said.

“The company will now focus on resuming drilling with a new rig set up as soon as possible.”