Kinetiko Energy gears up for near-term production with successful production flow test at South African well
Kinetiko Energy Ltd (ASK:KKO) is higher after completing another step on the fast track towards commercial production at Amersfoort gas-to-CNG pilot project in energy-hungry South Africa with a successful production flow test at Well KA-03PTR.
Subsequent to the recent well workover, the company’s South African subsidiary Afro Energy commenced controlled well flow clean-up periods to clean and condition the well in anticipation of performing the testing necessary to evaluate the current performance of the reservoir and well.
During these clean-up periods IAOF gas rates of up to 650,000 standard cubic feet per day (650 Mscfd) were recorded in each of the flow tests with an average flow rate of 190 Mscfd achieved during the production test.
Initial casing pressures of 12.5 bar restored from a flow casing head pressure of 2.1 bar to pre-test stabilised pressures within 25 minutes indicating a short reservoir recharge period. In addition, gas content produced consistently measured above 96% methane.
Shares have increased more than 27% to A$0.14 while KKO’s market cap is approximately A$64.7 million.
“Potential to rapidly scale”
The successful results from the current well workover establish promising reservoir recharge characteristics.
Well KA-03PTR was spudded in Nov 2012 and was intermittently production tested from January 2013 to late 2013 – producing a total of around 25.5 million standard cubic (MMscf) of dry methane-rich gas during that period.
Kinetiko Energy executive chairman Adam Sierakowski said: “To achieve such positive gas flows and strong recharge characteristics from a historically producing well indicates the enormous potential to rapidly scale exploration into the multiple high priority gas compartment targets identified through recent aeromagnetic surveys which the company is confident have much greater gas flow potential than Well KA-03PTR.
“Afro Energy now has results that substantiate commercial production and will move aggressively to close advanced negotiations with potential gas off-takers.”
Securing offtake
Afro Energy is in advanced negotiations with potential off-takers for small and intermittent gas production from Well KA-03PTR and possibly well KA-03PT2, where they will purchase gas at an on-site transfer point, compress it to a required pressure utilising their own compression equipment and feed gas to their CNG trailers for transportation to existing gas-based customers in the Johannesburg and Witbank regions.
The company intends to apply for full production rights over ER56 as soon as possible after the commencement of production of well-KA 03PTR and seek certification of maiden gas reserves.
Pilot gas production
The company is aiming for pilot gas production as soon as possible and recently commissioned an upgrade of downhole and surface equipment on the well in preparation for production.
Kinetiko also completed upgrades to the access road and terminal landing to ensure safe access and provide suitable terminal landing space for projected operations by potential CNG off-takers.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/947030/kinetiko-energy-gears-up-for-near-term-production-with-successful-production-flow-test-at-south-african-well-947030.html
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