Kinetiko Energy Ltd (ASX:KKO, OTC:KKOEF) has spudded well 271-06PT — the second well in a five-well production test program and a key milestone in the company’s efforts to commercialise its advanced shallow conventional gas projects in the Mpumalanga Province in South Africa.
The company is developing an energy solution for South Africa with its shallow conventional gas projects poised to deliver energy to a nation facing critical shortages.
South Africa urgently needs new energy and this program is a critical step toward unlocking the potential of the 6 TCF (2C) contingent resource, discovered across Kinetiko’s expansive onshore tenement package.
The five-well production test program is expected to provide significant insights into the reservoir dynamics of Kinetiko's 100%-owned gas fields. The program will flow-test each well for up to 90 days, gathering essential data for the certification of reserves and future development clusters.
Drilling commenced at 271-06PT
Drilling of well 271-06PT began on October 24, 2024, with initial gas flow results expected in November, providing critical data on gas flow rates and depletion curves.
The 271-06PT well is near essential energy infrastructure, including the Lily pipeline. It is also just 41 metres away from KV-06C core, which had 86.5 metres of gassy sandstone between 360-630 metres and coals which desorbed over 7 cubic metres per tonne gas.
Kinetiko executive chair Adam Sierakowski said: "The spudding of our second well in this five-well production test program is ahead of schedule.
"We continue our search to demonstrate the commercial viability of our vast gas resources and contributing to South Africa’s urgent need for cleaner, more reliable energy solutions.
“Well 271-KV06PT is located in an area adjacent to the Lily pipeline and is well-positioned to deliver gas to key infrastructure.
“We expect this test program to provide invaluable data on flow rates and depletion curves. These results will underpin the expansion of our gas reserves and pave the way for future production clusters."
Production well program
The production test program will individually flow-test each of the wells for an extended period.
The program involves drilling five production test wells, each expected to be completed within four weeks. After drilling, each well will undergo an extended dewatering and gas flow testing process, for up to 90 days to determine flow rates and depletion curves.
This process is designed to capture critical data on flow rates, reservoir pressure and depletion curves, which will then be used to model the economics of future gas field developments.
Based on prior reserves calculations, a flow rate of 50,000 SCF/day has been assumed, with the aim of exceeding this threshold and significantly improving the project's commercial metrics.
The data gathered will be instrumental in certifying gas reserves, estimating the life of future production clusters and optimising Kinetiko’s gas field development plans.
Each of the production test wells is near essential infrastructure, including gas pipelines and transmission lines, further positioning Kinetiko as a potential major supplier to South Africa’s power grid.
Indicative production test well location.
Resource growth projected
Kinetiko's existing 6 TCF (2C) contingent resource — equivalent to 1 billion barrels of oil — is expected to grow significantly as a result of the current five-well testing program, all of which will be hundreds of metres deeper than completed tests to the north.
Each well has been carefully positioned based on successful results from prior exploration, which identified extensive gassy pay zones. The results of this program will also aid in converting a portion of the company's 5.8 TCF of 2U Prospective Resources into contingent resources.
The success of this program will further de-risk future drilling campaigns and accelerate Kinetiko’s efforts to become a major contributor to South Africa’s evolving energy landscape.