Kinetiko Energy Ltd (ASX:KKO) has hit “significant gassy zones” while drilling core hole KV-14C — one of its conventional gas discoveries in energy-hungry South Africa.
The gas target, which has since been renamed hole 271-23C, was spudded in late September and neighbours the independent Majuba power station.
Kinetiko says the hole is currently coring at below 320 metres, having drilled through dolerite to 227 metres before breaking through to carbonaceous zones.
It’s still early days, but the findings so far indicate 271-23C could go much deeper than the company’s Korhaan wells.
Kinetiko’s wellsite geologist is checking over the core and once drilling is complete, the company will log the borehole and analyse results alongside regional stratigraphy.
“New potential market”
Kinetiko CEO Nick de Blocq said: “Placing the initial core hole of our return to exploration activities so close to Majuba power station opens a new potential market for our mid-ER271 gas.
“Majuba is designed to co-fire coal and gas, and they have a gas-fired generator in their complex.
“It was very encouraging when we first sensed gas in the fractures of the deep dolerite sill and the source became obvious as we broke through to the sediments below. What we are also doing here is maintaining our 100% strike rate.
“Every one of our 30 boreholes has cut gas, proving the productivity of the compartmentalisation of the sediments in our rights areas.
“The imminent completion of our merger and obtaining our maiden reserves report will be major milestones in our journey and we await these with great anticipation as we keep the company moving forward in a distinctly positive direction.”
Merger update
Kinetiko is also making tracks as it finalises its merger with Badimo Gas (Pty) Ltd which holds a 51% interest in some key South African exploration rights.
The energy stock has lodged all the necessary paperwork for the ASX and ASIC to set a shareholder meeting in motion, at which investors can vote to approve the acquisition.
The meeting is scheduled for late November, after which Kintetiko is poised to become the sole rights owner.
Gas reserves certification
Recently, Kinetio engaged engineering company Sproule to assess and certify the company’s maiden gas reserves.
That work is now in its final stages, and the Sproule report remains on schedule for delivery in the next six weeks.