Kinetiko Energy Ltd (ASX:KKO, OTC:KKOEF), which has been focused on advanced shallow conventional gas and coal bed methane in South Africa, has mobilised two drill rigs to ER272, an underexplored site adjacent to Sasol Ltd’s liquid fuels refinery at Secunda.
Acceleration in operations
The acceleration in exploration operations from one core rig to two accompanies a move into a fresh part of the company’s exploration tenure.
The Secunda refinery is one of the world’s largest synthetic fuels and chemicals production facilities, with a capacity to produce more than 150,000 barrels per day of liquid fuels and other products.
The refinery is partially converting from coal-to-liquids (CTL) to gas-to-liquids (GTL), and gas discovered by Kinetiko is well-placed to be a potential source of much-needed feedstock for the facility.
“We move into ER272 with plenty of excitement due to the proximity of our coring efforts to Sasol’s liquid fuels plant outside Secunda,” Kinetiko CEO Nick de Blocq said.
“We anticipate that our historical success rate of 100% gas strikes versus core wells drilled will continue and therefore place us favourably to assist Sasol to convert a large portion of its current CTL plant into a much cleaner GTL facility.
“The strong finish to our pilot exploration campaign of three core wells within reach of the industrial city of Newcastle in KwaZulu-Natal has been most rewarding as our plans to supply gas to both the regional offtakers and the Lily Pipeline gas consumers further south have become well aligned to the geological response.
All core wells hitting gas
“All three of our core wells encountered gas in very substantial sections of our core well profiles and we look forward to returning soon to drill some test wells to prove the productivity potential of ER270.”
The first core well 272-01C was spudded on 04 May 2023 after its location was agreed in consultation with Sasol to avoid interference with Sasol’s existing coal mining activities.
Core hole 270-05C within ER270 has been successfully completed having intersected significant gassy zones in targeted carbonaceous geology before reaching terminal depth of 597 metres in Southern deeper geology.
The core well intersected intermittent dolerite sills while encountering inter-laid gassy sandstones, coal and carbonaceous siltstones and mudstones.
Already lengthy gas fairway
Significant gas-bearing geological sequences were intersected, and log analysis has now been completed.
Gas desorption analysis is being conducted on the core samples of the coal intervals and wireline logs have shown a 134.5 metres cumulative gas intersect in the borehole profile.
Three wells completed in ER270 established new gas prone zones with preliminary results supporting potential for multiple production well clusters.
This most recent success extends the already lengthy gas fairway to which the company hopes to add once it drills the northernmost block, ER272.
The success of 270-05C provides further confidence for exploratory drilling adjacent to the Lily Gas Pipeline where multiple drill sites have already been approved.