Afro Energy granted approval to produce gas from Amersfoort Project in South Africa
Kinetiko Energy announced that Afro Energy has received approval to produce an amount of gas annually for a 2 year period from the Amersfoort Project exploration rights ER56 and ER38 by the Minister for Mineral Resources (DMR), South Africa.
Adam Sierakowski, Kinetiko Chairman stated: ''Kinetiko, through its 49% economic interest in Afro Energy has accomplished another major milestone towards achieving its vision of becoming the largest on shore gas producer in South Africa. The approval to produce and sell gas enables the Company to fast track pilot field gas production which has the potential to deliver first certified gas reserves andrevenues.''
The Company has identified a further 20 gas compartments across the Amersfoort Project from recently completed and interpreted aeromagnetic surveys. Existing pilot production wells and each of the recently identified gas compartments has the potential to host gas production wells which provides the Company with extensive alternatives to target pilot production wells adjacent to existing energy Infrastructure and markets
The DMR approval entitles Afro Energy to produce gas and dispose of up to 500 million standard cubic feet (mmscf) of gas per annum for a two year period. Afro Energy may also apply for additions to or extensions of the current approval given. The Company intends to apply for a full gas production right following the completion of successful pilot gas production and commercialisation testing enabled from the current approval.
500 million standard cubic feet (mmscf) is the equivalent of 500,000 gigajoules (Gj) and current South African domestic gas prices are estimated to range $7-$10/Gj. Short term gas production could be achieved through re-opening existing gas producing wells in the areas designated for the establishment of a pilot production test field in close proximity to well number KA-03PT in Figure 2 (best well flow rates achieved refer ASX announcement 21 March 2013) within the ER56 tenementand negotiations are advanced with potential off takers for the amounts of gas potentially produced.