Kinetiko Energy’s (ASX: KKO) exploration drilling at the Volksrust licence of the Amersfoort Project, South Africa, has discovered indications that gas volumes may be higher than expected.
Besides continuing to encounter widespread gas indications, gas zones have also been found to occur deeper in the coal seam gas core holes, raising the likelihood of higher gas volumes.
The company has completed three core holes with work ongoing on another two.
In total, eight exploration core holes are planned on the Volksrust licence, with completion expected in the first quarter of 2013.
The collected core samples are undergoing gas desorption in sealed canisters to improve certainty on gas resources and to plan the location of pilot production wells.
Kinetiko also expects the pilot production rig to spud the first production test well by the end of October.
Results are expected to be assessed in the first quarter of 2013 with reserves booked by the second quarter.
A Transnet gas pipeline traverses the north eastern section of the Volksrust licence area and offers a strong potential gas distribution option, should gas resources become economic.
Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.