The Otway Basin comprises of a series of superimposed sedimentary sequences, each deposited during different phases throughout the separation of Antarctica from Australia's southern margin.

Water temperatures of up to 158^oC have been recorded at well depths of up to 3,700m and geothermal gradients of up to 5^oC per 100m have been determined. Remnant heat from volcanic activity is possibly responsible for the anomalous geothermal gradients in parts of the Hot Rock permits. Also a likely source of heat in some areas is large hot granite bodies at depths of more than 3 km, insulated by a thick overlaying sedimentary pile of Early Cretaceous aged coals, mudstones and siltstones (Eumeralla Formation) and more wide spread is the crustal thinning throughout the Otway Basin caused by pull apart rifting.
Hot Rock selected its five permit areas on geological and commercial characteristics - relatively high geothermal gradient and proximity to transmission lines, infrastructure and power market.

All five permits show good evidence for containing extensive hot groundwater systems contained within deep, permeable sedimentary rocks. These geothermal reservoir systems are developed within the sandstone sequences within the Crayfish subgroup, particularly in the Pretty Hill Formation (Figure 3). Previously drilled petroleum wells with attractive temperatures obtained from the Crayfish subgroup that are also regarded by Hot Rock as geothermal discovery wells and are listed below;

• Glenaire ST1 well 158^oC at 3,702m permit GEP23
• Windermere 2 well 143^oC at 3,595m permit GEP7
• Ross Creek 1 well 142^oC at 3,659m permit GEP8
• Taralea 1 well 131^oC at 2,798m permit GEP8
• Killara 1 well 126^oC at 2,409m permit GEP8

With modern power plant technology, the development of geothermal resources with temperatures greater than 140^oC is technically and commercially viable, depending on well depths, well productivities and production pumping requirements where wells do not flow under artesian pressure.

All five Hot Rock permits are attractive for development. The actual location of Hot Rock's planned geothermal developments within the five GEP's will be based on:

• High aquifer temperatures. Optimum temperatures and depths for aquifers will need to be selected by taking into account the available aquifers, their characteristics, depth from surface and drilling costs.
• Inferred hydro-geological properties of the aquifer based upon the known regional basin structure, faulting and ground water hydrology.
• Good porosity (>5%), possibly associated with reasonable permeability (>100mD). Lower formation permeabilities can still be acceptable if supported by proven structural permeability
• Size of aquifer (thickness and lateral extent) to sustain commercial levels of production. Initially, these criteria will be best assessed from a consideration of regional structure of the aquifer. Response of the aquifer to production cannot be precisely estimated until exploration/appraisal wells have been drilled, flow tested and a hydro geologic flow model developed.
• Aquifer pressure - Well pumping can affect the economics of a geothermal power project, particularly where aquifers are under pressured.

These criteria are similar to those used for the assessment of conventional high temperature geothermal developments.

Existing Data

There is a wide variety of geoscientific data available for the Otway Basin. These include geological, geophysical and thermal data acquired by both remote surface exploration methods and from sampling and measurements in oil and gas wells.

At least 180 oil and gas wells have been drilled within the Hot Rock permits areas and over 14,000 line kilometers of seismic has been completed, providing a large quantity of available geoscientific data. Hydro-geologic data from oil and gas wells indicate that the main geothermal aquifers in the Otway Basin are contained within the Crayfish subgroup formations which have the highest known temperature yet encountered in the basin of 158^oC. The hydrologic characteristics of the Pretty Hill Formation at the base of the Crayfish subgroup are also favourable for geothermal development with porosities of between 10% and 20% encountered at 3,000m depth and permeabilities reaching 1 Darcy.

The gravity data coverage of the Hot Rock geothermal permits is excellent and shows good resolution. Gravity lows are associated with troughs and outline the thicker layer of low density material. Large scale gravity highs are similarly associated with areas of shallow basement of higher density than the overlaying sedimentary layers.

                                               Figure 3 - Stratigraphic sequence in Otway Basin

Aeromagnetic survey data is also of good quality and coverage and outline one of the deep buried intrusives north of GEP-6, in GEP-7 and north of GEP-8 and some of the NNW-trending lineaments present north of GEP-7. The most striking feature in these data is the precise delineation of the main recent volcanic eruptive centres in permits GEP-6, GEP-8 and in the western part of GEP-9.

A large number of seismic surveys have been conducted over the GEP's since the 1960s. 2D interpreted seismic sections show clear layering which is in conformance with the main sedimentary pile of the Otway Basin, and its tectonic setting. The basin is highly fractured and seismic surveys are the most precise way to get information on horizon thicknesses, depths of formations and fracture orientations.

Summary on each GEP

The most attractive geothermal resource in the Otway Basin is within the Crayfish subgroup (Early Cretaceous age), which comprises various aquifers of regional extent with proven permeability at depth and temperatures up to at least 158^oC.

Thick layers of the Crayfish subgroup shown in Figure 1 will be more favourable for heat retention and production of geothermal water than thin layers.

                         Figure 4 - Location of the thick sub basins hosting the Crayfish subgroup

The following outlines the potential of the individual permits.

Permit GEP-8

GEP-8 is the most explored out of the 4 permits with 39 wells having been drilled. All of these wells exhibit good geothermal gradients, averaging 3.9^oC per 100m.

GEP-8 contains the Campbell embayment (and gas field) which is the onshore region of the Otway Basin where the most exploration drilling has been undertaken and also where the structure of the basin is best known. The availability of exploration data makes it an attractive target for refined exploration. Well Ross Creek 1, located at the Eastern boundary of GEP-8 has the highest downhole temperature measured within the Crayfish subgroup.

The central portion of the GEP-8 area is dominated by a series of major faults which appear to have been recently active. An area of anomalously high geothermal gradients occurs within the Curdie Trough, a depression in the central GEP-8 area which is controlled by the Boggy Creek fault. Well Nirranda 8 drilled close to this fault has the highest geothermal gradient of 5.0^oC per 100 m.

This may indicate that this fault is a mechanism for convective heat flow from depth and consequently suggests that the fault may be a good geothermal target. Electromagnetic and gravity measurements indicate the presence of granite and / or basaltic intrusions at depth, which could be the source of the anomalous heat.

Permit GEP-6

In GEP-6, one major fault is mapped (the Tartwaup fault). Based on the surface trace, at least one well (Warrain 3) may intercept this fault at depth. This well demonstrates a high geothermal gradient of 4.2^oC per 100m. Other nearby wells such as Warrain 7 also exhibits a higher geothermal gradient of 5.0^oC per 100m. It is likely that the anomalous geothermal gradients here are associated with structural leakage up this fault from hot water at greater depth.

A combination of mapping, aeromagnetic and gravity surveys within GEP-6 indicate four granite bodies, however no wells have been drilled near or on them. The area of high geothermal gradients does not correspond with these intrusions, supporting a tectonic origin for the anomalous geothermal gradients.

Tectonically, the GEP-6 area illustrates several notable features of the region. The presence of the Otway group at surface in the northern portion of the GEP-6 area is a result of uplift and erosion in the Early Cretaceous. As a result this area exhibits anomalous geothermal gradients at shallow depths. As the most prospective areas for geothermal resources can be expected to be located within areas where deeply buried, high yielding aquifers are blanketed by thick insulating sediments and charged from deep seated faults, the abundance and position of these faults is significant.

The Northern area of GEP-6 has higher overall geothermal gradients. This is likely to be caused by the presence of the Palaeozoic basement at near surface, which has been emplaced by tectonic events in the Early Cretaceous.

Three large prospect areas of particular interest are located along an NW-SE trending line where the Crayfish subgroup is present. These correspond from NW to SE to the Penola Trough, Tantanoola Trough, and the Portland Trough. These areas are considered of better potential geothermal interest than those located to the North East of the permit where the Crayfish subgroup is shallower and thus at lower temperature.

Permit GEP- 7

Nine wells have been drilled in this area. All of these wells exhibit geothermal gradients of more than 3^oC per 100m, ranging from 3.2 to 5.8^oC per 100m.

The northern portion of GEP-7 is dominated by Palaeozoic basement as a result of uplift and erosion in the early Cretaceous. The Yatchaw West well which intercepted the Palaeozoic basement achieved a high geothermal gradient of 5.8^oC per 100m.

This could be the direct result of intercepting the basement, or the gradients being influenced by surface effects, or alternatively due to intercepting a granite intrusion. Aeromagnetic and gravity surveys indicate the presence of a large granite body in the northern portion of GEP-7, however, this has not been intersected or documented in the well data.

The central portion of GEP-7 illustrates a deepening of the Palaeozoic basement with an increased thickness in the sedimentary sequences to the south. This area is highly faulted, most likely contributing to the elevated geothermal gradients and this may prove to be a good exploration target for geothermal prospecting.

For the same reasons governing the prospectivity of GEP-6 the exploration work within GEP-7 will be focused on the South-East part of the permit in the region highlighted as showing a thick Crayfish subgroup coincident with the Windermere Trough. Another reason for concentrating on this area, rather than on the smaller patches of thick Crayfish subgroup found across the permit, is hydrology- because of the NE-SW regional flow, it is expected that permeability should be better where the extent of the permeable zone is wider in the flow direction.

Permit GEP-9

GEP-9 has 11 wells drilled. All of these wells exhibit good geothermal gradients, averaging 4.2^oC per 100m. This is the hottest average gradient from all 4 permits.

The geothermal gradients of GEP-9 are likely to be heavily affected by the high-standing Otway ranges which lie in the southern portion of the GEP-9 area. Here, the surface and subsurface geology is dominated by a thickened Otway group, as the result of compressional events in the Early Cretaceous. The main area of interest in GEP-9 is located in the west, in the vicinity of the Ross Creek 1 well. Another possibly prospective area is located at the south-western end of the Ombersley Trough.

Permit GEP-23

GEP-23 has 5 petroleum wells drilled into the Otway Basin sediments. The geothermal gradient in the wells average 3.8^oC per 100m. The permit covers the northern portion of the Penola Trough. The Crayfish subgroup sandstone geothermal reservoir is extensively developed in the permit below 2,500m and in places is interpreted to be over 2,000m thick. Glenaire ST 1 well provided to highest temperature yet recorded in the Crayfish subgroup sediments of the Otway Basin. A Horner corrected bottom of hole temperature of 158^oC at 3,702m depth was obtained in this well. Attractive geothermal targets exist in GEP-23.