Kinetiko Energy Ltd (ASX:KKO) has closed the books on a gas and coal bed methane drilling campaign at core hole 271-23C in energy-hungry South Africa.
The energy stock hit significant gassy zones and up to 247 metres worth of gas-bearing geological sequences during the drill campaign, which intersected the hole’s targeted carbonaceous geology.
Well 271-23C spudded on September 21 and was completed to 478 metres total depth. The borehole is within sight of Eskom’s Majuba Power Station, which is uniquely positioned to receive its coal from various sources because it’s not tied to a single mine.
Now the drilling phase is done and dusted, Kinetiko’s team has moved onto gas desorption analysis, where content is already as high as 9 cubic metres per tonne and rising.
KKO’s next core well — 270-06C — is ready for spudding in the far south, where the well’s deeper basement broadens the potential for thicker gassy zones.
Target acquired
Kinetiko is clear to drill at several locations in the Amersfoort region but its priority target has the potential to provide gas to industry in Newcastle and along the KwaZulu-Natal coast, which currently receives low-quality process gas from the Lily pipeline.
Core well 270-06C is expected to encounter deeper sandstones and coals in the region, so the company is pursuing a gas compartment discovery in the highlands to the west.
A nearby coal exploration hole drilled in 1979 encountered coal as deep as 408 metres and sandstone gas reservoirs are anticipated both above and below the coal.
As such, success at 270-06C will extend gas resources 25 kilometres south compared to prior discoveries.
Next borehole an “exhilarating step”
Kinetiko CEO Nick de Blocq said: “After a highly successful return to exploration work in our Rights Area ER271, we have been able to prove once again the productive nature of our unique geology.
“Geographically we are very well placed with borehole 271-23C to expand into a position of material assistance in terms of supplying the nearby plant and grid with either baseload or peaking capacity or indeed both.
“The next borehole, our initial effort into the physical exploration of Rights Area ER270 to the south represents an exhilarating step in our journey!
“Following on from recent aeromagnetic and gravimetry surveys, we believe that we should be able to continue proving the gassy content of our sedimentary formations.
“We also hope to open an entirely new area for possible production from what we expect to be deeper and higher pressured wells.”