Petratherm told the Australian Stock Exchange that measurements taken last week recorded a bottom-hole temperature of 109C at a depth of 1807m.

With the geothermal gradient for the entire hole at 50C per kilometre, Petratherm calculates that a temperature of 200C should be reached around a depth of 3.6km – its benchmark for economically viable electricity generation.

“This result is world-class and amongst the best recorded in Australia,” chief executive Peter Reid said.

“The temperature results have not only confirmed the large heat resource at Paralana but have also vindicated Petratherm’s unique exploration model, which aims to identify shallow geothermal resources close to market.”

With Phases 1 and 2 now complete, Petratherm said the geothermal test well would become a seismic monitoring well for future reservoir development.

The company also said it can now “confidently consider” the feasibility of drilling two new deep wells to confirm the expected thermal resource, undertake circulation tests and establish an underground heat exchanger.

Petratherm’s strategy is to reduce the risks and costs of both drilling and circulation processes by engineering the underground heat exchanger within the insulating rocks above the high heat-producing granite, in a process known as the “HEWI model”.

If the drilling and circulation work are successful, Petratherm plans to construct a 7.5MW electricity generation plant to supply local demand.