INTERVIEW WITH TERRY KALLIS, MANAGING DIRECTOR OF PETRATHERM LIMITED (PTR)

“$57 million TRUenergy Farm-In for Paralana”

http://www.brr.com.au/event/49136

TUESDAY, AUGUST 5, 2008, 5:00 PM.

            BRR    Good afternoon and welcome to Boardroom Radio. Today, we are speaking with Mr. Terry Kallis, Managing Director of PetraTherm. Thanks for joining us

10                    today, Terry.

            PTR     Thank you.

            BRR    Terry, we see you have released your quarterly report and that certainly has been a busy quarter. Can you just let our listeners know what some of the

15                    highlights have been?

            PTR     I suppose the two main things are that we have been continuing to work on preparing for the next deep well at our Paralana project, our main project up there in the Northern Flinders Ranges. Basically, we have invested quite a bit of money in seismic surveys and magneto-telluric surveys that help us work

20                    out with the best (inaudible) (0:00:37) in the world for the best probability of successful well and we have done that and we have included that in the quarterly. We have a highlight for the quarter with our Madrid pre-feasibility project for our geothermal district heating project just north from the city of Madrid and it showed that there was attractive return to be gained, so we

25                    decided to pour quite a bit of more money and to do a full feasibility assessment. I expect to complete that within six months. Then, two years from now, basically producing revenues out of our Madrid district heating project.

30        BRR    Terry, you were talking about the Paralana project, and also some fantastic news to come out of that is a joint venture project with TRUenergy. What does this mean for PetraTherm and what can we expect moving forward?

            PTR     I suppose, to start with, TRUenergy had farmed into our Paralana project as I said in the Northern Flinders Ranges and has a project that already has

35                    existing joint venture partner in Beach Petroleum. Bringing in TRUenergy to that joint venture arrangement after the farm-in basically strengthens the whole project, because what we have is a group that is coming in that complements the skills of Beach Petroleum and complements the skills that we have in PetraTherm, Beach Petroleum brining a wealth of experience in

40                    the subsurface, in the drilling and the fracturing, and TRUenergy basically bringing a whole wealth of experience in the generation transmission and selling and marketing of power. So there have been complementary sets of skills. Of course, TRUenergy also brings additional funding to the joint venture, so they bought in for up to 30% of the Paralana project for a sum of

45                    up to $57 million. In addition to that, they will also be up for their equity project costs. So basically over time, moving from proving of the concept through to pilot plant and demonstration plant, TRUenergy can earn up to 30% of Paralana.

            BRR    Terry, if you could lastly touch on where to now for PetraTherm. What is going to be happening in the next financial year?

            PTR     Well, the next step for us is to drill a deep well at 4 kilometres, fracture rock and then find out actually where the fractures go, and then drill a second

5                      deep well. We are right in the middle of securing a drilling contract, so we are negotiating that as we speak. So we are looking forward to the drilling and proving the concept of Paralana.

            BRR    Definitely some exciting times there at PetraTherm. Terry, we thank you very

10                    much for your time today and we look forward to speaking to you soon.

            PTR     Thank you very much.

            BRR    That was Mr. Terry Kallis of PetraTherm Limited. If you have any questions about this broadcast or any other broadcast, please feel free to contact us on

15                    brr@brr.com.au. I am Eddie (inaudible) (0:03:17) and thank you for listening to Boardroom Radio.

INTERVIEW CONCLUDED

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