A deposit of about AUD500,000 was paid to ensure that the drilling rig slot is confirmed. Subsequent to that time, a formal drilling contract has been agreed.
The rig is a new 2,000 HP LTI “Lightning” Rig, WDI Rig # 828, which is being mobilized by WDI into Australia. The scheduled shipping date from Dubai is April15, 2009 and the rig is expected to arrive into South Australia on May 10, 2009.
The Salamander-1 well is the second well to be drilled in the WDI drilling program. The well to be drilled immediately prior to the Panax well is scheduled to spud on June 15, 2009.
Under the terms of the drilling contract, Panax has the option to drill a second well within an 18 month period of the first well having been drilled. While the revised date for the spudding of Salamander-1 is slightly later than originally anticipated, this will not have any impact on Panax’s application under the Australian government’s Geothermal Drilling Program. In late December 2008, Panax applied for a grant of up to $7 million for the Salamander-1 well. The announcement of successful applications under this program is expected to be announced by the end of March 2009.
Panax has placed a firm order with Wood Group Limited for the purchase of the required wellhead and associated items for the Salamander-1 well. A deposit representing about 35% of the total wellhead cost has been paid to ensure the security of delivery of this item.
