Kinetiko Energy’s Extended Flow Tests Reveal Robust Gas Production in South Africa
Kinetiko Energy reports sustained strong gas flows from two production wells in South Africa, with high methane content exceeding prior reserve assumptions. These results bolster the economics of its planned micro LNG pilot project.
- Two production wells deliver nearly 8 million cubic feet of gas combined
- Well 271-KA03PT10 shows no decline after 40 days at 91 Mscfd average flow
- Well 271-KA03PT06 plateaus after 27 days with 164 Mscfd average flow
- Methane content exceeds 98.5%, indicating high-quality gas
- Data supports improved reserve estimates and micro LNG pilot feasibility
Strong Gas Flows Confirmed in Extended Testing
Kinetiko Energy (ASX, KKO) has announced encouraging results from extended flow testing of two production wells in its South African gas project. Located in the Mpumalanga Province, the wells 271-KA03PT10 and 271-KA03PT06 have together produced nearly 8 million cubic feet of natural gas, with testing ongoing to better understand long-term production potential.
Well 271-KA03PT10, the first of the two, has maintained a remarkably steady flow rate averaging 91 thousand standard cubic feet per day (Mscfd) over 40 days without any discernible decline. Meanwhile, well 271-KA03PT06, after an initial decline, plateaued at an average flow of 164 Mscfd over 27 days. Both wells have delivered gas with methane content exceeding 98.5%, underscoring the high quality of the resource.
Implications for Project Economics and Development
These flow rates significantly surpass the initial reserve assumptions used in the 2023 Sproule B.V. report, which considered 50 Mscfd per well commercially viable. The sustained higher flows suggest that the project’s economics could be substantially improved, enhancing the feasibility of Kinetiko’s planned micro LNG pilot plant. This pilot is being developed under a binding joint agreement with FFS Refiners, aiming to establish a cluster of producing wells at the Brakfontein site.
Executive Chairman Adam Sierakowski highlighted the importance of these results, noting the "exceptional" and "consistent" performance of the wells. He emphasized that the longevity and quality of the gas flows could extend production life well beyond initial expectations, a critical factor for long-term project viability.
Strategic Positioning in South Africa’s Energy Transition
Kinetiko’s gas assets are strategically located near South Africa’s aging coal-fired power infrastructure in Mpumalanga, positioning the company to contribute to the country’s energy transition. The gas is expected to provide reliable base load power and support renewable energy integration, aligning with South Africa’s evolving energy needs.
With 6 trillion cubic feet of 2C contingent resources and maiden gas reserves already established, Kinetiko is advancing a world-class onshore gas project. The extended flow testing data will feed into updated reserve calculations and economic models, informing next steps in development and potential scale-up.
While the results are promising, ongoing testing will be crucial to fully characterize depletion curves and confirm sustained production rates. The market will be watching closely for further updates on pilot plant progress and reserve upgrades.
Bottom Line?
Kinetiko’s strong flow test results mark a pivotal step toward commercialising a significant South African gas resource with promising economics.
Questions in the middle?
- How will ongoing flow testing influence final reserve estimates and project valuation?
- What are the timelines and scale expectations for the micro LNG pilot plant development?
- How might South Africa’s energy policy shifts impact Kinetiko’s commercialisation strategy?
