Kinetiko's First South Africa CBM Well Flows gas

Kinetiko Energy, as the Amersfoort Joint Venture operator with its Joint Venture partner Badimo Gas, has announced that its first pilot production well at the Amersfoort in South Africa is flaring gas from the Stage 1 shallow gas sandstone target. Preliminary indications of flow and pressure are substantially exceeding expectations. This will be confirmed when flow equipment and pump are installed shortly.

Flow testing of the Stage 1 gassy sandstones down to 250m will be begin once the flow skid and pumping gear are installed and should be completed by the end of November. The hole will then be drilled to about 370m in Stage 2 to test the main target of more gassy sandstones and coals from 250m to the bottom of the hole.

This pilot production well is the first of a program of 3 to be drilled on the northern Amersfoort JV license (56ER) and scheduled for completion in early 2013. These will be followed by two to 3 more on the southern license are (38ER). The pilot production wells are being located in areas identified in exploration drilling to contain gassy coal measures and downhole geophysical log indications of conventional gas accumulations in the surrounding sandstones.

The pilot production well program at Amersfoort will determine gas flow rates and recoverability from which the first gas reserves will be defined in early 2013.

The Amersfoort Project is located in South Africa’s Mpumalanga region, 250 km east of Johannesburg. Mpumalanga is a highly prospective area for coal-bed methane (CBM) with well documented, gassy coal measures and with gassy sandstones overlying the coal horizons.

Kinetiko is the operator of two gas licences in the Amersfoort Project (49% interest) covering 1,601 sq km under an agreement with South African partner, Badimo Gas. Estimates suggest that the Amersfoort Project to have Prospective resources 'Gas In Place' of 2.4tcf.