Kinetiko survey unlocks more gas potential in South Africa
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Kinetiko Energy (ASX:KKO) has completed an aeromagnetic survey that has identified 10 new areas of potentially gas-charged geological compartments, some of which are the largest identified so far at the Amersfoort project in South Africa.
The compartments identified on the ER38 licence of the project are up to 22sqkm in size and cover a total area of 124sqkm.
Aeromagnetic surveying has proven to be a useful tool for exploring at Amersfoort with the company noting the 2014 survey over ER56 had provided unprecedented detail on the structural and lithologic compartmentalisation of the gas charged Karoo sandstone and coal sequences.
The geological detail from the 2014 survey led to the company developing a pilot gas production field proposal for the 10 gas compartments defined at ER56.
Kinetiko intends to drill test the newly identified compartments to see if they can be ranked as potential development fields as in the initial 2014 survey.
And there is potential for more discoveries given that the completed surveys cover just 15 per cent of the company’s total exploration package.
Kinetiko noted that the enhanced data is helping advance negotiations with South African institutions to fund a pilot production field as well as assist in vectoring exploration and evaluation drilling.
South Africa has been in the throes of an energy supply crisis since 2007 with widespread rolling blackouts a constant in the country.
This is due to country’s ageing coal-fired power stations that are coming to the end of their lives along with a lack of investment in new generation capacity.
South Africa’s Council for Scientific and Industrial Research estimated that 1,498 gigawatt hours (GWh) of energy had been shed in the first eight months of 2020, more than the 1,352GWh shed in the whole of 2019 and 1,325GWh in 2015 and cost the South African economy an estimated US$7.2 billion last year alone.
Here’s where it gets interesting for Kinetiko.
While renewable energy is picking up a fair amount of the slack, South Africa is turning to gas to provide reliable base load power.
Amersfoort has a current contingent gas resource of 4.9 trillion cubic feet of gas that was certified by independent oil and gas appraisers and certifiers Gustavson Associates, a supply that is likely to find ready buyers in the country.