Statement of Estimated Geothermal Resources
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Nicholas Fingal Geothermal Play
SEL 26/2005, 9 March 2010
KUTh Energy Limited is the 100% owner and operator of Special Exploration Licence (SEL) 26/2005,
which extends 12,360km2 across eastern Tasmania (Figure 1). Located within this tenement, in the
active coal-mining area of the Fingal Valley, is the Nicholas Fingal Enhanced Geothermal System
(EGS) Play.
During 2007 – 2010 KUTh Energy Limited has conducted a major exploration program across its
Tasmanian tenements in pursuit of EGS plays suitable for electrical power generation. Work
completed during this period included the pattern drilling of shallow (ca. 250m) heat flow holes at
33 locations in SEL 26/2005. Data collected from this program, including geological logs, down-hole
temperatures, thermal conductivity measurements and surface heat flow estimates, have been used
to constrain the model which forms the basis of this resource estimation. These data have been
complimented by information derived from existing geophysical surveys, including measurements of
the gravity field and the re-interpretation of legacy seismic reflection profiles by contractors Hot Dry
Rocks Pty Ltd (HDRPL). Also utilised were extensive data from existing drill holes and the results of
research into local rock properties sponsored by KUTh Energy Ltd.
This Statement is a summary of a full report prepared for KUTh Energy Limited by Dr Graeme Beardsmore in
accordance with the Australian Code for Reporting of Geothermal Exploration Results, Resources and Reserves
(Edition 1, 2008) and its Lexicon. Neither KUTh Energy Limited nor Dr Beardsmore takes any responsibility for
selective quotation of this Statement or if quotations are made out of context.
Geological Setting
The basement geology of Eastern Tasmania is known from an area of exposure in the far north-east
of the State where meta-sedimentary and granitic intrusive rocks are observed at surface (Figure 1).
The southern boundary of this exposed area lies along the axis of the Fingal Valley, where the older
basement rocks are observed to disappear under cover of flat-lying sediment and intrusive (igneous)
Dolerite rocks.
For the purposes of this resource estimation, the stratigraphy of the Nicholas Fingal area was
simplified to six major units (Figure 2). The youngest of these are Tertiary-aged sediments and
basaltic volcanic rocks which typically form thin surficial layers along the valley. Also present are
localised accumulations of loose rock fragments that lie adjacent to steep slopes (‘talus’).
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Figure 1: Location Map of the Nicholas Fingal Geothermal Play
The southern margin of the Fingal Valley is marked by a distinctive ridge of hills topped by Jurassic
Dolerite, an igneous rock which formed when molten magma intruded along the bedding layers of
older sedimentary rocks creating thick (>250m) horizontal sills. Highly resistive to the weathering
processes that break down rock, the dolerite now forms a protective plateau which preserves the
underlying sedimentary rocks. Thermal conductivity measurements from KUTh’s shallow drilling
program indicate that the dolerite is an excellent thermal insulator. The thickness and extent of this
unit in the Nicholas Fingal area was estimated with reference to drilling data, 2D seismic
interpretation, gravity interpretation and available surface mapping.
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The flat-lying sediments intruded by the Jurassic Dolerite are collectively referred to as the
Parmeener Supergroup. These rocks, which are Permian to Triassic in age, are divided by age into
two major groupings, upper and lower. Lower Parmeener rocks include sediments derived from
glaciers (‘tillites’) overlain by shale, siltstone and sandstone that were deposited in a marine
environment. Upper Parmeener rocks include sandstone, siltstone, shale and coal measures that
were deposited in an onshore environment by rivers, lakes and streams. Localised thickening of
Triassic-aged coal sequences in the Upper Parmeener have supported commercial coal production in
the Fingal Valley for over 100 years.
Thermal conductivity data available for the Parmeener rocks indicate that they are likely to be good
to excellent thermal insulators. Studies of the flat-lying sediments also suggest the presence of a
small thermal anisotropy where the resistance to heat flow is greater across the sedimentary
bedding plane than along the bedding plane. This observation has been accounted for in the model
by the assumption of slightly different values of thermal conductivity in the horizontal (along
bedding plane) and vertical (across bedding plane) directions. Overall, the thickness and extent of
the Parmeener sediments in the Nicholas-Fingal area were constrained by drilling data, 2D seismic
interpretation and available surface mapping.
Figure 2: A simplified diagrammatic cross section of the Nicholas Fingal area illustrating the
relationships between the six major geological units
The sediments of the Parmeener Supergroup were deposited on a basement of much older
sedimentary rock from the Ordovician – Devonian Mathinna Group which are now exposed along
the northern margin of the Fingal Valley. These rocks, which comprise sandstone, mudstone and
shale were deposited from deep ocean water and are equivalent to rocks of similar age which occur
along much of the east coast of Australia. The contact between the Parmeener and Mathinna
Groups is unconformable, that is, a significant period of time, uplift and erosion passed between the
end of sedimentation in the Mathinna and the commencement of sedimentation in the Parmeener.
During this period, the rocks of the Mathinna group were intruded by granite and were strongly
deformed being folded and re-folded at least once. The intensity of these events has resulted in the
creation of a directional foliation or ‘fabric’ in these rocks. Studies have shown that this fabric
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affects the thermal conductivity of the Mathinna rocks by introducing a thermal anisotropy whereby
heat is able to flow along the foliation much easier than across the foliation. This means that
Mathinna rocks may range from poor to excellent thermal insulators, depending upon the way they
are oriented in the earth. Whilst information from surface mapping of the local rock fabric indicates
a range in observed orientations, no data are available on the variations of foliation with increasing
depth in the Mathinna. Overall, the thickness and extent of the Mathinna sediments in the Nicholas
Fingal area were estimated from a combination of drilling data, 2D seismic interpretation, gravity
modelling and available surface mapping.
Granite and granite-like rock (granitoid), which intrude the Mathinna Group, are observed in outcrop
to the north, west and east of the Fingal Valley (Figure 1). These rocks are Devonian in age and
include a range of compositions with some known to contain significant amounts of the heatproducing elements potassium, uranium and thorium. The volume of intruded granitoid in this area
is significant and geophysical models, based upon new and existing gravity data, predict that the
granite bodies extend beneath the entire model area.
Geothermal Model
The available geological data were used by HDRPL to create a 3-D numerical geothermal Earth model
of the Nicholas Fingal area (Figure 1). The model was constructed to cover an area of 60.0 x 55.0km
to a depth of 7000m and was based upon the stratigraphic relationships shown in Figure 2.
Topography was incorporated into the model and required the addition of a layer of ‘air’ to a
uniform elevation of 1800m above sea level. Thermal properties, including thermal conductivity and
heat production, were assigned to each stratigraphic unit, in most cases based upon measured data
(Appendix 2). For the Mathinna Group, HDRPL tested a number of cases based upon the range of
measured values to simulate possible variations due to the rock fabric. For the purposes of resource
estimation a median case was selected. In all cases, the thermal values assigned are considered to
be reasonable averages for the formations under consideration.
The thermal field at Nicholas Fingal was simulated by HDRPL by application of a 3D temperature
inversion algorithm to the model. This algorithm, which is an iterative process based on
mathematical equations derived from the known physics of conductive heat flow, divided the model
into discrete cells (500m x 500m x 50m). For each cell, the algorithm predicted values of
temperature and heat flow based upon the available input data. By means of an inversion process,
the values of predicted surface heat flow were then compared to the values measured at six
locations within the model area (Table 1) to determine the quality of the prediction. In this way a
rigorous program of model testing was undertaken. The results of this program were considered to
be acceptable in terms of the model’s ability to replicate the known thermal values.
Target Reservoir
To successfully develop an EGS reservoir for electrical power generation, a volume of rock is
required that is suitable for fracturing and which lies within a given temperature range. The host
rock must be competent and strong enough to sustain an open fracture network. Within the
Nicholas Fingal area the geological body that is most likely to meet the geo-mechanical requirements
for reservoir development is the buried Devonian Granite.
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Hole
Tower Hill
Fingal 3
Snow Hill
Mt Nicholas
Swan 2
Elizabeth
East
573964
590381
572873
587962
588102
549501
North
5399699
5381540
5358389
5401440
5359269
5356701
Heat Flow (mW/m2)
83 ± 1.0
97 ± 2.9
92 ± 2.3
106 ± 1.3
85 ± 1.2
94 ± 2.4
Table 1: Heat Flow values used as constraints on the 3D temperature algorithm inversion. All
coordinates are in MGA94 Zone 55.
Stored Heat Estimation
An estimation of the heat ‘stored’ within the identified reservoir units in the Nicholas-Fingal area
was undertaken by HDRPL by using the temperatures predicted at depth in the geothermal model.
For the purposes of the resource estimation, only that proportion of the total contained heat energy
for which a realistic chance of eventual economic extraction exists, was considered. To this end, a
cut-off temperature, defined as the minimum economic reservoir fluid temperature for commercial
energy extraction, was set at 150°C. This value is considered appropriate for low-temperature
organic rankine-cycle binary power generation.
Using the value of 150°C as a cut-off, a reservoir volume was defined within granite in the
geothermal model. The maximum depth extent of the reservoir volume was limited to 5km as a
practical depth for drilling. The areal extent of the reservoir volume was determined using a
combination of isothermal and geological constraints (Figure 1). The total volume of EGS reservoir
rock within the Nicholas Fingal area that is hotter than 150°C and shallower than 5km is estimated
to be 384km3. Temperatures predicted within this volume range from 150 – 220°C. The minimum
predicted depth to top-reservoir is 3200m and lies to the east of KUTh’s Mt Nicholas drill hole.
Figure 3: 3D image of the Nicholas Fingal Resource Model. The resource area is indicated by a solid
orange colour.
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The total amount of heat ‘stored’ within the identified reservoir volume was able to be determined
by application of heat capacity and density values to the reservoir rock (granite). Values of heat
capacity were estimated from published data and densities were based upon measurements.
As the amount of heat able to be extracted from the geothermal fluids produced from an EGS
resource is limited by the fluid rejection temperature from a power plant, only that portion of the
total stored heat that was above 70°C was considered for the resource estimation. This value (70°C),
known as the base temperature, is appropriate for an air-cooled low-temperature organic rankinecycle binary power generation plant.
Resource Classification
Edition 1 of the Australian Code for Reporting of Exploration Results, Geothermal Resources and
Geothermal Reserves (2008) provides a basis for the definition of Geothermal Resource Categories.
Under this Code, the data used to estimate the Nicholas Fingal stored heat estimation are sufficient
to support a classification of this estimate as an Inferred Geothermal Resource.
Nicholas Fingal Inferred Geothermal Resource (100% KUTh Energy Limited)
The Inferred Geothermal Resource estimation for the identified reservoir volume of 384km3 at
Nicholas Fingal is 101,000 PJth. This resource is distributed across a single identified reservoir Unit
comprising Devonian Granite (Table 2).
Reservoir
Stored Heat (PJth)
Volume (km3)
Granite
101,450
384
Inferred Geothermal
Resource (PJth)
101,000
Table 2: Estimated Geothermal Resource in the Nicholas Fingal Geothermal Play. Resource estimate
is rounded to the nearest 1000 PJth.
The Nicholas Fingal Inferred Geothermal Resource has been estimated using a numerical model of a
portion of the Earth’s crust. Whilst this model has been based upon the best available data, the
veracity of the resource estimate is dependent upon numerous assumptions inherent in the creation
of the model and may change as ongoing work yields new information. Key assumptions inherent in
this resource estimation include that:
− the resource will be used for geopower generation using commercially available organic-rankine
cycle binary power plant technology;
− the transfer of heat is conductive (no evidence of significant advective or convective processes
has been observed in the resource area);
− heat is contained entirely within the matrix of the reservoir rock; and,
− the probable effects of thermal anisotropy in the Mathinna Unit are likely to be evenly
distributed across the resource area.
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No account has been made of heat energy which may conduct or convect into the reservoir volume
during production. A summary of parameters and assumptions used in this resource estimate are
provided in Appendix 1. A glossary of selected terminology is provided in Appendix 2.
The information in this Statement that relates to Geothermal Resources has been compiled by Dr Graeme
Beardsmore, an employee of Hot Dry Rocks Pty Ltd. Dr Beardsmore has over 15 years experience in the
determination of crustal temperatures relevant to the style of geothermal play under consideration, is a
member of the Australian Society of Exploration Geophysicists and abides by the Code of Ethics of that
organisation.
Dr Beardsmore is a Competent Person as defined by the Australian Code for Reporting of Exploration Results,
Geothermal Resources and Geothermal Reserves (2008 Edition). Dr Beardsmore has consented in writing to the
public release of this Statement in the form and context in which it appears.
Appendix 1: Summary of parameters and key assumptions
Parametre
Cut-off Temperature
Base Temperature
Base of Reservoir
Reservoir Volume, Granite
Density, Granite
Specific Heat, Granite
Heat Production, Mathinna
Heat Production, Granite
Thermal Conductivity, Dolerite
Vertical Thermal Conductivity, Upper Parmeener
Horizontal Thermal Conductivity, Upper Parmeener
Vertical Thermal Conductivity, Lower Parmeener
Horizontal Thermal Conductivity, Lower Parmeener
Thermal Conductivity, Mathinna
Thermal Conductivity, Granite
Value
150°C
70°C
5000m
384km3
2,580kg/m3
950J/kg/K @ 178°C
1.61µW/m3
7.33µW/m3
2.17W/mK
1.69W/mK
1.88W/mK
2.05W/mK
2.09W/mK
3.80W/mK
3.50W/mK
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Appendix 2: Glossary of selected terminology
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Algorithm
Base Temperature
Basement
Cut-off Temperature
Density
Earth Model
Enhanced
Geothermal System
Granodiorite
Granotoid
Heat Flow
Heat Generation
Isotherm
Organic rankine cycle
Play
Reservoir
Talus
Thermal Conductivity
Thermal Anisotropy
Unconformity
Specific Heat
Stratigraphy
Well
An iterative computational process based on mathematical equations
The temperature of geothermal fluid once it has passed through the power
conversion process
The deepest geological horizon considered in an assessment
The minimum economic reservoir fluid temperature for commercial energy
extraction
A physical property relating mass to volume (kg/m3)
A three-dimensional computer model of part of the Earth based on gridded
inputs such as depth maps from well data, gravity data or seismic mapping
A geothermal play which has been engineered to improve or introduce
permeability into the rock formation
An intrusive igneous rock, similar in appearance to granite but containing
less quartz mineral
A group-term for coarse-grained quartz-bearing intrusive igneous rocks
including granite and granodiorite
The amount of thermal energy passing through a a square metre at the
Earth’s surface (mWm-2)
The amount of heat generated by a rock through the natural decay of
radiogenic elements, usually calculated in mico-watts per cubic metre
(µW/m3)
A line or surface joining points of equal temperature
An electricity production process whereby heat can be exchanged from a
hot fluid to a cooler one and vice versa via the use of a liquid organic
compound which has a lower boiling point than the source fluid. Used in
certain geothermal electricity generating plants where the fluid
temperature is suitable
An exploration concept or system which consists of four principle
geothermal components: heat flow, thermal insulation, reservoir and
access to water
A body of rock with certain permeability and porosity characteristics which
enable it to hold fluids of economic interest
A mass of accumulated loose rock at the base of a steep slope
A material property indicating the ability of a substance to transfer or
‘conduct’ heat energy; measured in W/mK
A material property whereby heat is able to preferentially flow in a
particular direction
A mappable surface representing a significant gap in the geological history
of an area
The amount of energy required to raise the temperature of 1kg of a
substance by 1°C; measured in J/kg/K
The sequence of geological strata at a given location
A bore hole