Kinetiko Energy (ASX: KKO) is spudding a new pilot production well at its Amersfoort coal seam gas project in South Africa after encountering drilling difficulties with the first hole.
The difficulties were caused by the drill rig crew adopting new rig procedures and the decision to drill a new hole was made to ensure integrity of the first hole.
Kinetiko expects drilling, completion and testing to start before the end of November and initial results within five weeks of that.
The company is drilling three wells on the northern Amersfoort tenement to be drilled by early 2013. This will be followed by another three wells on the southern tenement.
Each of these will be drilled to a total depth of about 450 metres to assess gas flow rates and ultimately well gas recovery.
Due to the extensional geological structures in the region, the coals have relatively high permeability with preliminary studies indicating that low volumes of produced water are expected from the production wells, given the geological and climatic characteristics of the region.
Produced water will, where possible be reused locally.
Kinetiko is the operator of the two Amersfoort licences with a 49% interest under an agreement with Badimo Gas.
Independent, oil and gas consultant Gustavson Associates has estimated that Amersfoort hosts a Contingent Resource of 1.5 trillion cubic feet of gas.
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