Green Rock Energy (ASX: GRK) has signed an agreement with New World Energy to jointly develop both companies’ geothermal exploration permits (GEPs) in the North Perth Basin in the Mid West region of Western Australia.

The binding agreement will give the joint venture the dominant position for geothermal power development in the Mid West which is the fastest growing electricity market in the State where there is a large potential geothermal resource where two prospective drilling target areas are close to infrastructure.

The agreement builds on Green Rock’s alliance with Pacific Hydro for conventional geothermal for power generation and the company intends to apply for State and Commonwealth funding towards first two wells.

Richard Beresford, Green Rock’s managing director, said “Green Rock considers the Mid West Geothermal Power Project a strong Green Rock Energy and New World Energy JV to explore WA geothermal potentialcontender for State and Commonwealth funding towards drilling the first two well.

“Working jointly with New World Energy further strengthens our prospects and we look forward to further progress on funding over the next few months.”

The joint venture will create a single entity with access to the best geothermal areas in WA that are adjacent to transmission infrastructure and major baseload energy markets. Magnetite mining and processing projects in the region will require many hundreds of Megawatts of baseload electricity over the coming years.

Green Rock will be the initial operator of the JV which will focus on identifying the most prospective drilling target for drilling two wells with the objective of an initial ~5MW of power generation capacity connected to existing power infrastructure.

New World Energy is an unlisted dedicated geothermal energy exploration and development company based in Perth and focussed on Australia and the Asia-Pacific region.

Currently Green Rock has 100% interests in 9 GEPs in the North Perth Basin and New World Energy has 100% interest in 8 GEPs.