ASX-listed gas explorer Kinetiko Energy will start drilling five appraisal production wells to the west and north of Volksrust, in February next year, in efforts to commercialise advanced shallow conventional projects in Mpumalanga, South Africa.

The sites already have environmental approvals in place for drilling, while an application for a production right over the ER271 block in question is in the works. 

Kinetiko explains that the aim is to identify optimal development sites for clusters of wells in joint venture (JV) with development finance institution the Industrial Development Corporation (IDC), as well as to perform extended well flow testing.

“This data will more accurately inform our regional economic models as they will provide us with a more precise understanding of plateau flowrates and longevity,” the company explains.

The JV with the IDC entails the co-development of a large South African onshore liquefied natural gas (LNG) production project.

Kinetiko appointed Infin Drilling to deliver the five appraisal production wells in the Volksrust region to the south of ER271, where some of the company’s most gassy core wells were drilled over the last 12 months.

The planned wells are close to the Lily gas pipeline, which bodes well for future offtakers or infield LNG plants for virtual pipelines.

The environmental-impact assessment (EIA) in respect of the production right is well under way with leading environmental consultants WSP anticipating having its report completed late in the first quarter of next year.

Kinetiko anticipates the processing and grant of the production right by South African regulators will take about six months, which should enable planned first commercial production later in 2024 from the Amersfoort production cluster – as part of the first IDC JV.

Moreover, the company aims to increase its exploration acreage by more than 60% through the ER320 block, which covers an area of 2 383 km².

Another EIA to support the application for this block is progressing and will also be completed during the first quarter of next year.

Kinetiko says South Africa has extensive gassy coal basins, widespread energy infrastructure and growing gas demand. The company has achieved maiden gas reserves and six-trillion cubic feet contingent resources and large potential exploration area, comprising about 6 000 km² of granted and applied exploration rights.

The company’s vision is to commercialise an energy transition solution for South Africa.