Kinetiko Energy Raises $2.2M, Spuds Third Well, and Signs LNG Pilot JV Term Sheet
Kinetiko Energy has spudded its third gas production test well at Brakfontein and signed a non-binding term sheet with FFS Refiners to co-develop a pilot LNG plant, backed by a recent $2.2 million capital raise.
- Third production test well spudded at Brakfontein
- Advanced drilling techniques targeting resource growth
- Non-binding LNG pilot plant JV term sheet signed with FFS Refiners
- $2.2 million capital raising completed to fund exploration and testing
- Strong cash position maintained with no debt
Progress on Gas Production Testing
Kinetiko Energy has made significant strides in its onshore gas exploration and production efforts in South Africa’s Mpumalanga Province. The company recently commenced drilling its third production test well, 271-KA03PT10, at the Brakfontein site. This well is part of a five-well program designed to unlock deeper, gas-rich zones and apply advanced drilling and remediation techniques to enhance gas recovery. The drilling program incorporates optimisations recommended by Oilfield Technologies Australia, aiming to reduce formation damage and improve flow rates.
The well cluster at Brakfontein is strategically positioned to support a planned pilot liquefied natural gas (LNG) plant targeted for 2026. Initial gas flow results from the new well are expected imminently, potentially marking a pivotal step in demonstrating commercial viability.
Resource Growth and Strategic Outlook
Kinetiko’s current contingent gas resource stands at 6 trillion cubic feet (TCF), equivalent to roughly one billion barrels of oil. The ongoing testing program aims to significantly increase this resource base by targeting previously underexplored deeper formations and applying enhanced recovery methods. Success in these efforts could also convert part of the company’s 5.8 TCF prospective resource into contingent resources, thereby de-risking future drilling campaigns and accelerating the transition from exploration to production.
This progression aligns with South Africa’s urgent need for cleaner, reliable energy alternatives as the country shifts away from aging coal-fired power stations. Kinetiko’s gas projects are positioned to provide base load power and support renewable energy integration.
Partnership to Accelerate LNG Pilot Plant
A binding Joint Development Agreement is expected to be formalised in August 2025, which will solidify the partnership and set the stage for commercial LNG supply to the South African market.
Financial Position and Capital Raising
Kinetiko successfully completed a $2.2 million share placement in June, strongly supported by directors and major shareholders. The funds will primarily support ongoing exploration, production testing, and working capital needs. As of 30 June 2025, the company reported a healthy cash balance of approximately $1.88 million with no debt, underpinning its capacity to advance its development plans.
Operationally, Kinetiko maintained a strong safety record during the quarter, with no incidents reported over nearly 3,000 person-hours worked. The company also continues to foster local employment and engagement with South African service providers and consultants, reinforcing its commitment to domestic economic participation.
Bottom Line?
As Kinetiko awaits key production test results and formalises its LNG joint venture, the company stands at a critical juncture in transforming South Africa’s gas potential into tangible energy solutions.
Questions in the middle?
- Will the upcoming production test results confirm commercial gas flow rates?
- How soon will the binding Joint Development Agreement with FFS Refiners be executed?
- What impact will the pilot LNG plant have on South Africa’s broader energy transition?