Kinetiko Energy: Gas Flows from Second Pilot Well (South Africa)

Kinetiko Energy announced significant gas flows from KA-10PTR in addition to the previously reported flows of 332Mscf/day from KA-03PTR located 8km away further support the exploration geophysical logs and coal desorption data indicating widespread gas in coal and conventional gas in adjacent sandstones.

Pilot test well KA-10PTR has produced an estimated gas flow rate of 45mscf/d over the first 10 day period. The well is now shut in for a pressure build up test and will then be shut in, pending further technical and JV negotiations.

Five exploration pilot test wells have been drilled and two continue to be tested on the Northern Licence (56ER). KA-03PT certified test results were announced to the ASX in March 2013. Initial down hole pump problems with KA-1OPT were overcome with a redrill and KA-10PTR has successfully flowed gas at significant rates. The hole is now being pressure tested. KA-11PT and KA-07PT have shown gas but will require further work if they are to be properly flow tested, they will be revisited once the JV parties have reached agreement on funding. KA-05PT yielded some gas flow but not enough to warrant further testing.

KA-10PTR redrill was spudded 27th May and has produced a measured stabilized gas flow of 45mscf/d over a 10 day period. The well is now shut in for a pressure build up test and afterwards will be shut in, pending further technical and JV review.

Initial commercial studies indicated that flow rates of 45mscf/d can be commercial due to the project’s low cost (vertical drilling, completions and production environment) and very attractive local gas market demand and pricing.

The O&G regulator (PASA) has approved up to 8 Pilot Test wells on the Southern Licence (38ER) of which 5 are planned to be drilled as part of Phase 2. As in the Northern license area, the pilot test wells will be located in areas identified in exploration drilling to contain gassy intervals and geophysical well log indications of conventional gas in the sandstones.