Vulcan sale, WildHorse float make Hercules a power player

Perth-based consortium Hercules Energy Pty Ltd has emerged as a key player in the junior energy sector, selling its Vulcan Geothermal Pty Ltd assets to Green Rock Energy Ltd today and revealed as the power behind new IPO WildHorse Energy Ltd.

West Perth-based Green Rock announced the move into Hungary with the acquisition for 3.5 million shares and equal number of options, valuing the deal at about $280,000. West Perth-based uranium development company WildHorse aims to raise $10 million to explore and develop uranium projects in Hungary and the USA.

Founded in November 2005 resources incubator Hercules is three-way partnership between Charles Morgan of Seaspin Pty Ltd, Craig Burton of Verona Capital and Argonaut Capital, the latter represented on the WildHorse register by Eddie Rigg. All three are among WildHorse's top ten shareholders.

Mr Rigg told WA Business News that Hercules, which now employs about 10 people and has an office in Hungary, has several projects on the go, with the most significant achievement so far being its $20 million listing of Matra Petroleum plc on the London Stock Exchanges Alternative Investments Market.

"The critical thing we try to do with Hercules is find assets that are commercially significant and try to put together the best management teams we can," Mr Rigg said.

He said the modus operandi was to look for proven projects which could benefit from a change in technology, regulations or political shifts.

Other projects include:

• European-focused Central EU Pty Ltd which has two biofuels projects and is being run by former WA politician Monty House.
• Latent Petroleum Pty Ltd, run by former Apache exploration chif Stephen Keenihan which is looking to acquire existing preven assets in Australia.
• A 60 per cent interest in Spanish tungsten and tin assets which its plans to list on AIM or Toronto.

WildHorse, the second Uranium company involving Argonaut (the other was Nova Energy Ltd) will issue 25 million shares at 40c each. The company is 22 per cent owned by Macquarie Bank.

The offer is not underwritten, and oversubscriptions will not be accepted.

WildHorse is chaired by the former commercial manager of Rio Tinto's WA iron ore operations and former chief financial officer of Iluka Resources, Mark Hughes. Mr Hughes was managing director of Harvey beef processor EG Green & Sons for two years until August last year when he left the company which was having a liquidity crisis.

The company has appointed as managing director former Nova Energy managing director Richard Pearce, who will be joined on the board by Henry Neugebauer, Bruce Larson and Mr Burton.

Argonaut Capital will remain involved, acting as corporate adviser to the deal, with BDO Chartered Accountants appointed as auditors to the company, along with BDO Consultants, as investigating accountants.

The company will also retain Tony Walsh Corporate Services at Compliance consultant, with Fairweather & Lemonis serving as solicitors to the company.

The offer opens on October 16, to close on October 30.

Below is the Green Rock announcement:

Green Rock Energy Limited ("Green Rock" or "the Company") is pleased to announce 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 has 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 (Ortahaza -3 & Ortahaza -5), located near Iklsdbvrdvce (Zala County), in
south-west Hungary, will be tested for hot water production rates over the next 8 months 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 the 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.


The consideration for Vulcan will be the issue of 3.5 million fully paid ordinary Green Rock shares
and 3.5 million options to acquire Green Rock shares at an exercise price of 15 cents per share.
Approval of the shares and options will be sought at the Company's Annual General Meeting set
for Monday 27 November 2006.

RFC Corporate Finance Limited, a Sydney based resource and energy focused investment bank,
is assisting Green Rock in the determination of the optimum means of funding this and other
projects.

Green Rock's entry into the Hungarian market demonstrates that the Company can achieve
international acceptance of its geothermal credentials. It gives the Company an advantageous
position in a highly attractive market, as well as a valuable relationship with two major
international energy companies. It is an important step in the Company's strategy to become a
major developer of geothermal energy projects. The Company continues to evaluate the
geothermal resource potential at Olympic Dam, in central South Australia, and is seeking to
broaden its activities through the acquisition of a selective portfolio of other geothermal energy
projects and has submitted applications for additional geothermal leases in Australia.

Geothermal energy is the only renewable energy source that can provide constant base load
electricity.