Kinetiko Energy Ltd (ASX:KKO), an Australian gas explorer and developer focused on advanced shallow conventional gas and coal bed methane in energy-hungry South Africa, has hit a new record high on delivering a positive update on its onshore gas exploration and production development activities.
"Significant" gas potential
Gas desorption testing has been completed on core hole 271-23C, spudded on September 21 in the vicinity of Majuba power station, and wireline logging results indicate "significant" potential for gas field development.
The results from testing achieved gas content of more than 11 cubic metres per tonne and rising, while wireline logging has established 131.5 metres of sandstone pay zones, six coal seams and carbonaceous sediments making up the balance below the dolerite sill cap.
Roughly 64 kilometres further south, core well 270-06C has intersected strong gassy geology with the hole below 445 metres and is still penetrating gassy sandstone beds, extending the potential contiguous gassy sandstone geology by around 30 kilometres.
These results have seen the company's share price rise by as much as 50% to A$0.165, a new record high.
Thicker sills – greater volume
The company knows, from aeromag surveys, that the dolerite sill undulates and it has encountered a thick sill section in this borehole. Historical exploration indicates that thicker sills can produce deeper sandstones with higher gas volume and pressure.
Kinetiko CEO Nick de Blocq said: “We have proven and re-proven the productivity of our unique geology. Following the success of core hole 271-23C near Majuba power station, our first borehole in block ER270 has kept our 100% strike rate intact.
“Our 31st borehole showed signs of gas from within the fractured, lower dolerite, which strengthened substantially as we broke through to the sandstone formations beneath.
“The desorption testing on the Majuba samples is now upwards of 11 cubic metres per tonne and increasing, a very rewarding result from a strategically placed core hole.
“We aim to complete the current coring and logging on 270-06C before mid-December and allow the gas desorption analysis to proceed.”
What’s next?
The company is conducting onsite gas emission and desorption analysis on the core samples.
Once drilling is complete, Kinetiko will log the borehole, collect sandstone samples and analyse the results, which it hopes will tie in with regional stratigraphy and extend the proven gas resource.