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Kinetiko energised on exploration

12 September 2022 14:12
ASX: KKO

Kinetiko Energy have mobilised the rig for a new core hole as the South African government announced its plans to convert coal power stations to gas-burning generators.

The new core hole is located where historical exploration has shown extensive gassy sandstone deposits, lying only five kilometres away from the Majuba power station, seeking fuel to fire its 20 megawatt generator.

All 23 of the core wells drilled in its ER 271 license have intersected gas, with seven pilot production wells already drilled successfully and a first cluster of five wells earmarked for production next year.

The company said it was the beginning of an aggressive exploration campaign.

“The urgent need for gas to contribute meaningfully to the energy crisis in South Africa has manifested itself in an increasing interest in the largest onshore resource in South Africa,” chief executive Nick de Blocq said.

“The recent Government initiative has brought three ex-coal-fired power stations into play, which will be re-engineered to become gas-fired — there has never been a better time to have gas assets in the heart of South
Africa’s energy infrastructure.”

Drilling will begin on the 19th, and Kinetiko is planning further expansion, with at least six core holes being drilled across the next two quarters.

KKO’s Australian Stock Exchange-listed price was trading at 9c today (1.05 pm UTC+ 8 hours).

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