“Kinetiko’s vision of becoming a major player in South African onshore gas production has today taken a significant step forward with agreements being finalised with the IDC, a leading national development finance institution, to co-invest in the development of a gas field adjacent to the company’s existing Amersfoort wells,” says executive chairman.
Kinetiko Energy Ltd (ASX:KKO) holding Afro Energy has entered into a joint development agreement with the Industrial Development Corporation of South Africa (IDC), an arm of the South African Government mandated to promote economic growth and industrial development in South Africa.
The Perth-based gas explorer, which focuses on advanced shallow conventional and coal bed methane opportunities in rapidly developing markets, will co-develop gas fields with the IDC in the energy-hungry nation to produce energy for industrial, commercial, transportation or power generation applications.
Major player in onshore production
“Kinetiko’s vision of becoming a major player in South African onshore gas production has today taken a significant step forward with agreements being finalised with the IDC, a leading national development finance institution, to co-invest in the development of a gas field adjacent to the company’s existing Amersfoort wells,” executive chairman Adam Sierakowski said.
The proposed gas field consists of approximately 20 gas-producing wells under an existing bulk gas production permit of 500 million standard cubic feet (mmscf) per annum.
The IDC has committed to contributing R70 million for a 45% interest and Afro Energy to contribute R85 million for a 55% interest in an incorporated joint development entity. The IDC has a first right to participate up to 45% of the next 80 wells developed by Afro Energy.
Approvals are in place for the JDA and fieldwork is anticipated to start later this year.
“This transaction represents the first investment in Kinetiko by a substantial South African institution and will fast track the company’s ambitions to rapidly develop numerous gas fields over the vast gassy geology identified and we are grateful for the IDC team’s long support,” Sierakowski said, “and we look forward to being a development partner with them.”
Shares were 9.76% higher to A$0.09.
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