Kinetiko Energy Ltd about to turn on the gas tap at Amersfoort in energy-hungry

() is about to produce its first gas from the Amersfoort Project in South Africa, a country that is hungry for energy having experienced regular and widespread blackouts in recent years.

The revitalised company has been on a fast-track towards production and cash flow since being reinstated to the ASX last May.

In a short period of time, it has achieved a number of key milestones, including a 227 per cent lift in resources, and production is imminent after completing the workover of its own pilot well while negotiations with offtakers are in the advanced stage.

Just the start

And the story is only just beginning with first production from the pilot program to generate revenue that will assist in delivering a maiden gas reserve and further developing the Amersfoort project into an important energy player in southern Africa.

What’s more, there is plenty of additional upside at Amersfoort with the current independently certified 2C resource of 4.9 trillion cubic feet just from a small portion of the 7,000 square kilometre project in the country’s heavily populated and industrialised northeast.

Survey reveals new potential

The latest milestone that indicates this upside is the completion of a third high-resolution aeromagnetic survey that confirms the continuity of gas prospective geology.

This 6,011-line-kilometre survey covering 273 square kilometres over a selected portion of ER271 and ER38 that form part of the project, has linked three previous survey areas.

The total surveyed area of unprecedented geological detail now covers 965 square kilometres of gas-prone Main Karoo Basin sediments and while extensive, it represents only 21 per cent of granted exploration tenure being explored.

Kinetiko is highly encouraged as the major geological features visible in the data define six potentially gas-charged compartments in the survey area ranging in size from 5.7 to 22.5 square kilometres for a total of 77 square kilometres. This brings to 37 the number compartments covering 257 square kilometres.

These findings will guide the sequence of drilling evaluation of the gas compartment targets with the aim of bringing them progressively up to pilot field compartment status.

A similar approach has been used in ER56 to establish where pilot production is about to begin from the first two of 10 compartments in well KA-03PTR.

Successful workover

In mid-February JV company Afro, completed a workover program at well KA-03PTR along with well KA-03PT2.

After being granted a bulk gas production and removal permit by the Minister of Mineral Resources and Energy, JV company Afro Energy (Pty) Ltd, which is 49% held by Kinetiko and 51% by Badimo Gas (Pty) Ltd of South Africa began planning and preparing a short-term pilot gas production program.

This incorporates the production of up to 500 million standard cubic feet (MMscf) of gas annually for a two-year period from exploration rights ER56 and ER38.

It was also determined that the two wells should undergo workovers to maximise gas flow rates and recovery.

Advanced offtake discussions

Following the successful workovers in mid-February, Afro Energy has progressed negotiations with gas traders for potential offtake of small and intermittent gas production from KA-03PTR and possibly KA-03PT2.

It is proposed that they will purchase gas at an onsite transfer point, compress the gas to the required pressure utilising their own compression equipment and transfer this to their CNG trailers for transportation to existing gas-based industries in the Johannesburg and Witbank regions.

Flow rate and equipment testing of well KA-03PTR began immediately following the workover with the company intending to seek full production rights for ER56 as soon as possible after the start of production, which is expected this month.

Kinetiko will also seek certification of maiden gas reserves.

Revitalised…