Afro Energy granted approval to produce gas from the Amersfoort Project in South Africa

Kinetiko Energy has announced that Afro Energy has received approval to produce an amount of gas annually for a two year period from the Amersfoort Project exploration rights ER56 and ER38 by the Minister of Mineral Resources of the Republic of South Africa (DMR).

Kinetiko chairman Adam Sierakowski 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 and revenues.’

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 US$$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 (best well flow rates achieved refer ASX announcement 21 March 2013) within the ER56 tenement and negotiations are advanced with potential off takers for the amounts of gas potentially produced.

Source: Energy-pedia