Kinetiko Energy Limited is pleased to report that it has been granted four Technical Cooperation Permits (TCPs) near Kinetiko’s Amersfoort Project in South Africa. A TCP entitles Kinetiko 12 months to perform desktop studies and the unique right to apply for exploration rights over the TCP area. The TCP also confers the right to access exploration data held by the regulatory authorities. The granted TCP’s cover Karoo coal basin areas that Kinetiko has identified as being highly prospective for commercial accumulations of coal bed methane.
Kinetiko Managing Director Andrew Lambert said: “The granting of our four TCP applications is a milestone for Kinetiko. This indicates Government confidence in Kinetiko Energy. Kinetiko has consolidated its position as a leader in South African CBM exploration.”
Independent US Oil and Gas consultants: Gustavson Associates have estimated a (P50) Gas In Place (GIP) resources for the 100% owned TCPs of 9.3tcf, using a more conservative probabilistic method. These resource estimates were classified in accordance with the Petroleum Resource Management System, Society of Petroleum Engineers (SPE), 2007.
The CBM resource estimates are based on several key assumptions including:
• Adsorbed and free gas resource estimates were estimated using probabilistic analysis;
• Two probabilistic approaches were used; Kinetiko has decided to use the conservative approach (based on arithmetic sums and average net coal thickness and applied probabilities;
• Estimates used released gas content ranges and coal and carbonaceous mudstone thicknesses, established from Kinetiko’s Amersfoort Project;
• Gas content and other information was also obtained from published regional sources, rather than direct measurement, and direct porosity values were assumed on analogous data in order to estimated free gas content.
These TCPs (100% owned) resource estimates are in addition to Kinetiko’s nearby Amersfoort Project which has estimates of Gas in Place (GIP) of 1.7tcf (P50) and a Contingent Resource (P50) of 1.1tcf. Kinetiko has 1,601km2 of granted exploration tenure at Amersfoort (in joint venture with Badimo Gas Ltd) and potentially a further 7,086km2 of land via an MOU with Badimo Gas. Kinetiko will complete its planned program of exploration drilling of at least 16 holes over both Amersfoort and Volksrust tenements (56ER and 38ER) by mid-2012. Results to date have been encouraging with gas data from the coal seams and indications of conventional gas in the sandstones overlying the coal. Significant spontaneous gas flows have occurred from several of the exploration holes to date. A review of the gas resources on the Amersfoort project is being undertaken by Gustavson Associates; this is expected within 4-6 weeks.
As previously announced, up to eight pilot production wells at Amersfoort is expected to commence August and be completed by end of the year. Planning and procurement for this program is well advanced. Regulatory applications for approval of well design, sites and operational procedures have been submitted to the Petroleum Agency of South Africa.
The Amersfoort Project
The Amersfoort Project is located at the heart of South Africa’s energy generation and transmission infrastructure situated in Mpumalanga (formerly Eastern Transvaal) in South Africa. A highly prospective areas for coal-bed methane (CBM) with well documented, gassy coal measures.
Kinetiko is Operator of two gas licences in the Amersfoort Project (49% owned) covering 1,601km2 under an agreement with South African BEE company: Badimo Gas Ltd.
US based independent oil and gas consultant: Gustavson Associates (Boulder, Colorado) estimated the Amersfoort Project to have Gas In Place (GIP) Prospective Resources of 1.7 trillion cubic feet (tcf), and 1.1tcf (P50) Contingent Resource. The aim of the exploration program is to increase Resource/ Reserve certainty.