Kinetiko Energy (ASX: KKO) reports that independent appraisers have assessed its gas project east of Johannesburg and confirmed the “huge” scale of its exploration rights in the energy-starved country.
Gustavson Associates of Colorado has estimated the contingent (2C) resource at 4.9 trillion cubic feet (TCF), an increase of 227% over the previous 1.5TCF estimate.
And the prospective resource gas in place (GIP 2C) has been upped by 287% to 9.3TCF.
Kinetiko is focused on advanced gas and coal bed methane opportunities in the rapidly developing markets of southern Africa.
The company’s flagship Amersfoort project hosts what it describes as a dominant exploration landholding covering approximately 7,000 square kilometres — about 2% of South Africa’s land mass — in the heart of the Permian Age coal fields, of which approximately 4,604sq km is granted and being explored.
The exploration right application covering 2,394sq km is still to be assessed.
More energy needed by South Africa
Kinetiko is focused on developing a clean energy solution for South Africa’s energy crisis — and more energy is desperately needed in the country.
There are constant widespread power blackouts and last December saw the highest recorded incidence of load shedding and blackouts in the country, with country-wide rolling power outages for up to 10 hours a day.
Kinetiko pointed out there is no energy substitute or augmentation on the horizon.
The South African Government is prioritising domestic gas development.
Kinetiko’s project area already has significant infrastructure nearby with power stations, gas pipelines, high voltage transmission lines, roads and railways.
Advanced negotiations are already underway
Kenetiko, as of May, had spent $10.3 million on its Amersfoort project, had completed gas flow permeability test wells with strong flow rates achieved, and had tested only 15% of the project area’s geology.
The company plans to commercialise a pilot gas production field and has been in talks with several South African energy institutions and utilities.
Kinetiko chairman Adam Sierakowski said the company now has independent confirmation of the huge scale of the project’s exploration rights with further rights still to be assessed.
“The significant potential recoverable gas from known accumulations, surrounded by energy infrastructure and abundant markets in the Johannesburg region, further improves Kinetiko’s existing value proposition,” he added.
Kinetiko is now set on a course to pursue maiden gas reserves through further negotiations to develop a pilot gas production field, Mr Sierakowski said.
The next step will be assessing information from an aeromagnetic survey which was completed this month — and which has the potential to enable further revision of the Gustavson resource assessment.