Join our daily newsletter At The Bell to receive exclusive market insights
Kinetiko Energy (ASX:KKO) has officially spud the second well in its five-well gas production test pilot program.
The company expects to report initial gas flow results next month from downhole the second well – called 271-06PT – which is located 41 metre away from another well that hit nearly 89m of gassy sandstone “between 360-630m.”
Each of the five wells will be flow-tested for up to 90 days in a bid to shore up the best quality data available. The company reported on Tuesday all wells are nearby other energy infrastructure.
In the background, Kinetiko has its eyes on a far larger play than just producing gas; it describes itself as intending to help fix South Africa’s energy grid wholemeal.
Rolling blackouts in the country have been commonplace for many years, and despite a recent move from the state-owned utility Eskom to delay shutting down three coal plants – which has led to a situation where South Africa hasn’t had a blackout in seven months – business owners remain cautious.
(Coal theft has also been in decline due to a drop in its price and enhanced police efforts.)
Whether Kinetiko can convince Eskom’s new CEO – who’s less concerned by the energy transition and more about power plants working properly – on gas remains to be seen.
But a net improvement to South Africa’s energy stability has long been key to Kinetiko’s value proposition.
“With South Africa urgently needing alternative energy solutions, this program is a critical step toward unlocking the potential of the Company’s 6 TCF (2C) contingent resource, discovered across Kinetiko’s expansive onshore tenement package,” the company wrote on Tuesday.
Kinetiko last traded at 7.2cps.
Join the discussion: See what HotCopper users are saying about Kinetiko Energy and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
