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.
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