Company Information for Green Rock Energy

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Company Statement

Green Rock Energy Limited is an Australian based geothermal energy explorer and developer with projects in South Australia and Hungary.

Incorporated in 2002 and listed as Mokuti Mining Limited initially, Green Rock Energy has been trading on the Australian Stock Exchange since December 2003.

In May 2005 the Company changed its name from Mokuti Mining Limited to to Green Rock Energy Limited when it acquired all the issued shares in Perilya Geothermal Pty Ltd (now named Green Rock Geothermal Pty Ltd) and Green Rock Energy Pty Ltd (now named Green Heat Resources Pty Ltd).

Our Aim/Vision
Green Rock Energy is focused on becoming a major producer of clean, renewable geothermal energy by generating base load electricity from hot dry rocks.

The Company also plans to pursue other opportunities in the growing "green" energy sector.

The technology
Water will be injected under pressure down the first geothermal well
into the hot crystalline rocks to open up fractures at depth and create a sub-surface reservoir.

This process, called fracture stimulation or "fraccing", will utilize commercially available technologies derived from the international petroleum industry to enhance the permeability in tight reservoirs at depth. Permeability increases of 3 to 4 orders of magnitude have been inferred from flow testing at HDR test sites in France, the USA, UK, and Sweden. Permeability can be significantly enhanced by the self propping effected by small displacements of fractures caused by the fluid injection. Given encouragement from that fracture stimulation, another well will be drilled and fracture stimulated so that the well bores at the reservoir horizon are about 500 metres apart.

Drilling:
Techniques have been developed to drill to depths of 5 to 6 kilometres and for directionally controlled wells.

Power Plants (image below):
The type of power plant used depends on the temperature, pressure and chemistry of the water recycling through the rocks.

In general, Binary-Cycle power plants (see below) are used for temperatures below about 190°C and Flashed Steam plants are used for
higher temperatures. The Binary-Cycle plant is so named because the geothermal fluid circulates in a closed loop underground while a lower boiling point working fluid, which is heated by the heat from the geothermal fluid, circulates in a separate closed loop in the power plant at the surface.

There are two main types of Binary-Cycle power plants. Organic Rankine cycle plants use an organic fluid with a lower boiling point (eg isobutene, n-pentane) than water. Kalina cycle plants vaporise a mixture of water and ammonia which evaporates over a larger temperature range compared to the Organic Rankine cycle. Rankine cycle plants are in commercial operation in many localities around the world while the proponents of Kalina cycle plants claim them to be more efficient. Large scale commercially viable working examples of Kalina cycle plants are yet to be brought into production.

Company Diagram

Operations and Technology

Olympic Dam Geothermal Project
In 1996, a founding director of Green Rock Energy Pty Ltd, submitted Australia’s first application for a geothermal energy exploration licence. The application covered the world class Olympic Dam mine where Western Mining Corporation(WMC) (now BHP Billiton) had outlined a heat flow anomaly at depths to 1,000 metres. At the time, there was no legislation covering the geothermal energy sector and the founders of the private company Green Rock Energy Pty Ltd (now a wholly owned subsidiary of the Company) assisted the regulatory authority in South Australia (Primary Industry and Resources South Australia -PIRSA) to introduce legislation to enable the grant of geothermal energy tenements. In 2004, Green Rock Energy Pty Ltd and Perilya Geothermal Pty Ltd, were awarded five geothermal exploration licences surrounding the giant Olympic Dam mine. A further two licences were awarded in 2005, bringing the total area held by the Green Rock Energy group to 2,897 km². The Company also holds two geothermal exploration licence applications over WMC special mining lease in Roxby Downs town.

Green Rock Energy’s licences are located where the required thermal qualities for base load electricity generation are indicated by previous exploratory drilling and where there is potential for long-life markets. The advantage of this project is that it is close to a large potential customer (Olympic Dam mine) and to existing power infrastructure linked to the major cities in eastern Australia.
Drilling was commenced in July 2005 at Blanche No 1 approximately 8 km west of Olympic Dam mine to define the temperature, geothermal gradients and geo-mechanical rock stress regime and other rock properties at different locations within the heat flow anomaly. Having drilled Blanche No 1 to a depth of nearly two kilometres Green Rock has proven the granites are hot. The results of drilling by BHP Billiton confirms the heat anomaly should also extend over the wider geothermal leases also held by Green Rock.

The Company is now at the next step which is to establish the water circulation system capable of producing enough geothermal energy to power an electricity generation plant. Green Rock has entered into a contract with Australia’s premier scientific and industrial research organisation, the CSIRO, to carry out the mini-fracture stimulation of the granite at various depths in its Blanche No.1 well. This is scheduled for around September 2007 when the designated high pressure pump becomes available.

The mini-fracture stimulation program will involve pumping water into the hot granites already drilled in Blanche No 1 to generate fractures in the hot granite at various depths. The data obtained will provide details about the geological stress conditions which will be used to design the two deeper production and injection wells and the associated fracture stimulation program to establish a water circulation system between the two wells to recover heat from the hot granites.

It will be the first mini-fracture stimulation program for geothermal energy carried out anywhere in Australia. This innovative approach to geothermal exploration in Australia has the potential to significantly lower costs and risks for Green Rock by providing key input information which will be used for the optimal design and conduct of the subsequent deeper drilling and fracture stimulation program. This will enable more accurate design and costing of the deep wells and fracture stimulation program than has been possible for others who have had to drill to much greater depths before intersecting the top of their targeted hot reservoir rocks.
Hungarian Geothermal Project
On 13 October 2006 Green Rock Energy Limited announced that it has extended its geothermal activities into Hungary. Hungary has a strong and growing demand for clean, green, renewable energy, and has existing power infrastructure and electricity pricing incentives for renewable energy which make geothermal projects commercially attractive. Green Rock entered into an agreement to acquire Vulcan Geothermal Pty Ltd (“Vulcan”), which holds a 32% interest in a joint venture (“Hungarian Joint Venture”) to establish the first geothermal power plant in Central-Eastern Europe.

The joint venturers in the Hungarian Joint Venture, in addition to Green Rock, are Hungary’s largest company, the Hungarian oil and gas company, MOL (“MOL”), which is also the operator of the Joint Venture, and Enex hf (“Enex”), a leading Icelandic geothermal consulting and development company.

The Joint Venture is testing existing, but shut in, or out-of-use, petroleum wells for the generation of geothermal energy. The first two wells have been selected following the evaluation of around 70 shut in wells owned by MOL out of thousands of petroleum wells drilled in Hungary.

The first two wells (Ortaháza -3 & Ortaháza -5), located near Iklódbördöce (Zala County), in south-west Hungary, will be tested for hot water production rates to determine the optimum development. During the testing one well will be used for thermal water production and the other well for injecting the water back into a separate water-bearing horizon. The testing will gather detailed data on the wells and water-bearing zones for the subsequent construction and operation of the planned geothermal power plant.

The size of any development will depend on the quality and sustainability of the water flow rate. The aim of this first project is to install a 2-5 MW geothermal power plant, to be commissioned in 2008. In addition, after passing through the power plant the geothermal water will provide heat for industrial purposes and a multi-acre greenhouse agricultural operation. This output may be expanded by additional drilling. Following this first project, the aim is to undertake similar geothermal projects in Hungary, by utilizing some of the other prospective petroleum wells identified by MOL and Enex.

TARGETING GEOTHERMAL ENERGY
Geothermal energy is the natural heat of the earth and presents a potential commercially viable and sustainable solution to problems of pollution, greenhouse gas emissions and rising fuel prices. The US Department of Energy has estimated that global geothermal energy resources aggregate to approximately 50,000 times the energy of all the world’s known reserves of oil and gas.

Of the four different types of geothermal energy resources (geo-pressured, magma, hydrothermal and hot dry rock) only hydrothermal is currently being used commercially. Hydrothermal energy is employed in at least 70 countries in direct use applications for space heating, greenhouses or aquaculture or to produce electricity.

Hot dry rock (“HDR”) also known as “Hot Fractured Rock”, "Hot Wet Rock" or “Enhanced Geothermal Systems” or "EGS", is heat in hot rocks buried deep in the earth that does not have a natural system of permeable water filled fractures. The rocks are hot due to heat generated at depth which is trapped by the insulating effect of overlying rocks. The extraction of heat from hot rocks is achieved by pumping cool water into the rocks at depth, and subsequently withdrawing it at a much higher temperature after it has flowed under pressure through fractures in the hot rocks.

The Benefits
Geothermal energy delivers base load electricity. This means electricity can be generated continuously, 24 hours a day, 365 days a year. Electricity supplies generated by geothermal energy are not dependent on sunshine, wind or waves, which are variable and interruptible sources, and also subject to climate change and seasonal fluctuations.

Geographical Spread

Australia

Hungary

Board of Directors and Key Management

Adrian Larking	Managing Director
Jörg Baumgärtner	Non-Executive Director
Alan Knights	Executive Director
Scott Spencer	Non- Executive Director

Company Address Unit 6, 38 Colin Street West Perth, Western Australia, Australia WA 6005 Telephone: (+61 8) 9482 0482 Facsimile: (+61 8) 9482 0499 Email: info[at]greenrock.com.au Website: http://www.greenrock.com.au

Capital Fully paid ordinary shares (GRK) 147,640,213 Options ( $0.10 options expiring 18 April 2008) (GRKOA) 40,243,810

Annual General Meeting November 2007

Major Shareholders

As at 30 September 2008
NATIONAL NOMINEES LIMITED	15,189,000	8.42
PERILYA LIMITED	15,000,000	8.32
PKA INVESTMENTS PTY LTD	10,484,375	5.81
MR SIMON MARK ASHTON	4,331,250	2.40
MR ALAN ROBERT KNIGHTS	3,090,225	1.71
CALM HOLDINGS PTY LTD	3,000,000	1.66
MR BRUNO NOSEK	2,753,125	1.53
KIRK SECURUTIES LIMITED	2,500,000	1.39
CALM HOLDINGS PTY LTD	2,484,810	1.38
ANZ NOMINEES LIMITED	2,375,182	1.32

Related News

30/08/07 - Green Rock Energy Optimistic About Geothermal Project At Olympic Dam

Most Recent Statement

02/10/08 - Appointment of Richard Beresford as Non-Executive Director
25/09/08 - Annual Financial Report - 2008
03/09/08 - Inferred Resources at Olympic Dam Geothermal Energy Project
31/07/08 - Quarterly Report for the 3 months ending 30 Jun 2008
11/06/08 - Green Rock Energy gearing up for major growth phase
05/09/07 - Appendix 3Y Change in Directors Interest