Geothermal Exploration Permits (GEP - 6, 7, 8, 9 and 23) are located in the Otway Sedimentary Basin of Victoria and cover 27,521 km² in total. These permits are in area where the basement rocks beneath the sedimentary basin are perturbed by elevated heat flow associated related to with crustal thinning by rifting, recent volcanism and underlying hot granites.

Geothermal systems of the type found in the Otway Basin are known as "sedimentary geothermal systems (SGS)". These are different from the HFR hot granite geothermal prospects being vigorously explored elsewhere in Australia. Sedimentary geothermal systems have the benefit of shallower depths and lower drilling costs and risks. They are also naturally permeable and water bearing and therefore do not require artificial stimulation to create or enhance permeability.

Over the past 40 years, the Otway Basin has been explored extensively by the oil and gas industry. This has produced a wealth of data on the geology, geophysics and hot water hydrology of the Otway Basin, from both surface exploration studies and deep well drilling. These data confirm that large reservoirs of geothermal water are present throughout HRL's five geothermal permits, contained within the Crayfish Subgroup - a thick and widespread rock sequence dominated by high porosity sandstones of Cretaceous age, deposited along the northern margin of the Otway Basin as a number of individual depositionary centres ("depo" centres).

Measurements in a number of these oil and gas wells confirm subsurface water temperatures in the Crayfish Subgroup of at least 158^oC at depth of around 3,700m and that high porosity and permeability reservoir rocks are present. HRL regard these as geothermal discovery wells in that they confirm geothermal conditions in the Otway Basin as being suitable for commercial electricity generation using modern power plants. Conservative volumetric stored heat calculations indicates a potential for generating up to 1,750 MWe of electricity within four GEP's. This represents approximately 35% of the base load electricity demand of Victoria.

 
                   Figure 1 - Examples of existing data from prior oil & gas wells in Hot Rock's permits