Company
ASX:KKO
Kinetiko Energy Ltd (ASX:KKO) is in the energy exploration business, solely focused on sandstone gas and coal bed methane exploration and commercialisation in South Africa. The company has an extensive exploration area, of which about 7,000 square kilometres is granted and being explored. Kinetiko’s flagship near-production Amersfoort Project and adjacent exploration rights are held through a South African joint venture company Afro Energy (Pty) Ltd in which Kinetiko holds a 49% economic interest and a 50% controlling interest.
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“Kinetiko welcomes this support as this Ministerial consent represents the last regulatory approval required to complete the merger transaction and the company will now proceed to seek approval from our shareholders,” executive chairman Ada
Significant progress has been achieved in recent weeks towards securing investment from major South African institutions and completing off-take agreements.
KKO has completed logging on the Korhaan-3, 4 and 5 wells, with all three assets now up for multi-day flow testing.
Multi-day well gas flow testing is imminent, with all three wells to be flow-tested, with long-flow and shut-in periods as the company seeks stability of rates and pressures.
The work revealed 42 new compartments, equating to 264 square kilometres of gas prospective tenure.
Flow testing for each of the three wells in the coming weeks is expected to provide the platform for first production and booking of maiden reserves.
Logging for Korhaan 3, 4 and 5 wells is to be carried out in January while the planned flow test on Korhaaan-4 will commence.
The Perth-based energy stock originally held a 49% interest in Afro, which holds the South African exploration rights and production approvals tied to Kinetiko’s assets.
“Sales of gas under the JV will substantially assist KKO’s target of converting its established 4.9 trillion cubic feet (TcF) contingent gas resource into first reserves,” says executive chair.
The company observed significant gas flows under choked conditions, with gas sensed throughout the entire drilling of the production section from 130 metres onwards.
Korhaan-4 has been cased to 150 metres and cementation operations are underway, with the drilling expected to start into the gassy sandstone and underlying coal seams to total depth within the next few days.
Crucially, the three new wells — if successfully completed — have the potential to become producing pilot wells in a nation that is hungry for energy.
Crucially, the three new wells — if successfully completed — have the potential to become producing pilot wells.
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All five wells are intended to become its early, pilot-production sources of gas, with comingled production to an infield offtake facility being planned.
Kinetiko expects all drilling activities to be completed by early December and all three wells will be flow tested after logging.
The Amersfoort Project has an independently certified contingent 2C gas resource of 4.9Tcf (trillion cubic feet).
Consolidation of three existing exploration rights at Amersfoort is expected to assist the company to streamline and increase the economics of potential gas production scenarios.
Kinetiko‘s next three drill targets could form a five-well cluster at Amersfoort, paving the way for further offtake negotiations and the certification of its maiden gas reserves.
The company is “on the cusp of becoming a substantial source of high-quality gas to help alleviate the national energy shortage,” says incoming CEO Nick de Blocq.
