The Kinetiko Energy Ltd (ASX: KKO) share price has risen 18% today to 13 cents per share, regaining the losses it experienced yesterday after the recent release of the company’s half-yearly results for the period ended 31 December 2020.
Kinetiko shares are up a whopping 550% over the past 12 months after continued success in the company’s gas exploration projects.
Promising aeromagnetic surveys and significant gas resources
During the period, Kinetiko completed $1.2 million in interim funding to accelerate gas production from its Amersfoort Project in South Africa, where it believes it may be sitting on one of the world’s largest coal basins.
Perth-based Kinetiko is undertaking the Amersfoort Project as a joint venture (49% stake) with South African partner Badimo Gas. The project’s significant gas resources tripled by 227% in 2020, sending the gas producer’s share price soaring.
Kinetiko aims to generate its first gas revenues from the project this year, after aeromagnetic surveys revealed several large gas deposits in the region, including the largest ever surveyed, which stretched up to 22 kilometres in size.
The surveys undertaken so far represent just 15% of Amersfoort’s total exploration potential.
The Amersfoort basin hasn’t required fracking, and the company has secured environmental approvals from the Minister of Mineral Resources and Energy in South Africa of up to 500 million standard cubic feet (MMscf) of gas per annum for a two-year period.
South African energy market full of demand
The company advised it is currently in discussions with gas off-takers in Johannesburg to buy the gas un-compressed on site for South African demand. Kinetiko and Badimo have a long-standing presence in the region and are confident of optimising the surface separation of water and gas.
Kinetiko says it’s had “positive” conversations around transforming the Amersfoort Project into a standalone onshore gas producer to meet the needs of the “constrained” South African energy market, which continues to suffer from undersupply.
The gas producer has a current market capitalisation of $64 million and has a year-to-date return of -16.67%, with the Kinetiko share price still well down on its 2013 highs of more than 30 cents per share.
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Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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