South African energy transition solution developer Kinetiko Energy Ltd (ASX:KKO, OTC:KKOEF) has raised around A$4.9 million, before costs, through a strongly supported renounceable pro-rata entitlement offer.
Robust shareholder backing
The funds represent around 97% of the maximum subscription, reflecting robust backing from major shareholders and directors.
Capital raised will facilitate a significant five-production well gas flow testing program, scheduled to commence in the third quarter of this year.
This program aims to identify high-flow rate gas zones and potential sites for developing production clusters in the Mpumalanga Province of South Africa.
Appraisal wells
Kinetiko Energy, which is focused on commercialising advanced shallow conventional gas projects, will use the funds to drill five production appraisal wells in its exploration rights 271 and 270.
The initial well is set to commence drilling in August, with the full program expected to conclude by the first quarter of 2025.
These targeted regions are adjacent to completed core wells that identified gas pay zones exceeding 130 metres.
The flow testing program is critical for gathering data to enhance geological and financial modelling, ultimately allowing the company to apply for increases in resource and reserves certification.
This development aligns with Kinetiko’s strategy to support South Africa’s energy transition by leveraging its advanced gas projects.
The entitlement offer, which closed on June 11, was initially announced to the ASX on May 15.
Mpumalanga Province projects
The strong participation from shareholders underscores confidence in Kinetiko’s strategic direction and its potential to deliver significant value through its Mpumalanga Province gas projects.
The successful completion of the rights issue marks a pivotal moment for Kinetiko Energy, setting the stage for further advancements in its quest to bolster South Africa's energy landscape.
"Comprehensive support"
Kinetiko executive chair Adam Sierakowski said: “On behalf of the board of directors, I wish to thank all shareholders for their comprehensive support of the entitlement offer.
“The funds raised under the entitlement offer will be used to aggressively advance the company’s gas exploration activities.
“These activities, highlighted by the five appraisal production wells to be drilled this year, are planned to achieve the highest flow rates and technical outcomes.
“Successful results from these wells are expected to significantly mitigate the technical risk associated with the unique geology of the company’s world-class onshore gas discovery, paving the way for a promising future.”