Kinetiko Energy overcomes flow issues to unlock South Africa’s largest onshore gas field
Kinetiko Energy (ASX: KKO) is back on track to provide a critical new gas supply for energy-starved South Africa.
After running into flow problems in recent testing at its shallow conventional gas projects in the Mpumalanga province, the company is moving ahead with the development of South Africa’s largest onshore natural gas resource.
Initial assessments from laboratory tests suggest the inhibited gas production from the recent wells was related to a mechanical rather than a geological issue.
Key findings
The company has now received key findings from laboratory simulations undertaken by flow assurance experts Oilfield Technologies Australia (OTA), which found that issues related to drilling techniques had significantly impaired the gas flow performance.
OTA assessed reservoir formation core, site water and foam samples used for past drilling before delivering a number of positive conclusions and recommendations.
Significantly, the studies identified relatively simple solutions including minimising water invasion and reducing foam use while maintaining down-hole pressure balance.
‘Comprehensive understanding’
“[Kinetiko] now has a comprehensive understanding of why the first two production test wells of the current drilling campaign failed to deliver expected gas flows—and how that result can be rectified by optimising future drilling to achieve consistent and enhanced gas deliverability,” chair Adam Sierakowski said.
“The company is advanced in implementing adjustments to the drilling process to mitigate water invasion and reduce foam use while controlling down-hole pressure and anticipates spudding its next production test well in early May.”
Kinetiko will continue to work with OTA to develop and bring its hydrocarbon resources on-stream.
Development plans
Kinetiko is now moving ahead with its development plans, confident it can significantly grow its existing contingent resource of 6 trillion cubic feet (tcf) – equivalent to 1 billion barrels of oil – as a result of the current exploration program.
Following the completion of the drilling optimisation study and recommencement of production test well drilling, Kinetiko’s focus will return to the Amersfoort region in the north of tenement ER271.
The company will commence drilling there as part of its joint venture with the Industrial Development Corporation – the South African government’s premier infrastructure investment fund – to develop a producing gas field.
New drilling activities will see future wells positioned based on successful results from prior exploration that identified extensive gassy pay zones.