Kinetiko Energy Ltd. · ASX:KKO
Kinetiko Energy — 5th Annual CBM & Unconventional Gas Conference, Bali 2012
29 slides from Kinetiko Energy's conference presentation, Jun 28, 2012
Slide 1: Unconventional gas potential in South Africa and Lessons from CBM Exploration
For personal use only Unconventional gas potential in South Africa and Lessons from CBM Exploration 5th Annual CBM & Unconventional Gas Bali- 28th June 2012 Presentation by Andrew Lambert (Managing Director, Kinetiko Energy) 1
Slide 2: Disclaimer
Kinetiko Energy Ltd Disclaimer For personal use only This document should be read in conjunction with any other available information on Kinetiko Energy Ltd. This document is a summary only and does not include all information about the Company’s assets and liabilities, financial position and perfor
Slide 3: Contents
Contents For personal use only Amersfoort Project Lessons learnt to date Gas and Exploration trends 3
Slide 4: Kinetiko Energy – ASX listed & significant early mover
Kinetiko Energy – ASX listed & significant early mover For personal use only 4 Kinetiko Energy Ltd
Slide 5: The Amersfoort Project
The Amersfoort Project The Amersfoort Project has 2 exploration For personal use only rights over 2 tenements - covering 1,612km2 Great neighbourhood (gas demand centres & existing infrastructure) Independent O&G consultant Gustavson Associates estimated: Gas in place (GIP) 1.7tcf Continge
Slide 6: The Amersfoort Project
The Amersfoort Project For personal use only Aim: improve Resource & Reserves within 18 months Significant land position 1,601Km2 in high gas demand area 800+ existing exploration drill holes in the Amersfoort area Commercially and technically astute partnership with JV partner No “fracking”
Slide 7: Amersfoort Project Proposed Timeline
Amersfoort Project Proposed Timeline Strong progress made to date since ASX Listing (Q3 2011) For personal use only 2011 2012 2013 2014 Q3 & Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Exploration drilling Gas desorption Pilot production wells Apply for Production rights* Infill Drilling Production Pilot
Slide 8: Highlights
Highlights Amersfoort Project (Kinetiko 49%) Prospective Resources Gas In Place (GIP) 1.7tcf For personal use only Other Kinetiko land (Kinetiko 100% TCPs) Prospective Resource GIP of 9.3tcf (P50) Amersfoort exploration drilling has completed 10 holes to date Encouraging CBM data and strong
Slide 9: Structure of the Amersfoort Project JV
Structure of the Amersfoort Project JV For personal use only Section 11 granted in May 2011 Amersfoort Tenure registered Kinetiko 49% equity (JV Operator) Badimo 51% equity Kinetiko to spend first AUD$4m Reimbursed past costs to Badimo Option to increase equity (BEE must hold min. 26%)
Slide 10: Amersfoort Exploration
Amersfoort Exploration Aim: improve Resource & Reserve definition for 56ER and 38ER For personal use only Exploration Phases (min commitment) 1 8 Exploration Drill Holes in 56ER 2 8 Exploration Drill Holes in 38ER 3 2-3 pilot production wells in 56ER 4 2-3 pilot production wells in 38ER Ongoing KA04
Slide 11: Amersfoort Exploration results to date
Amersfoort Exploration results to date Sub Bituminous coal to 5m cumulative thickness, plus gassy mudstones For personal use only Depth ~400m and strong indications of good gas content and saturation 148 core samples (desorption) to date from 8 core holes High permeability Wireline logging
Slide 12: Kinetiko Operations
For personal use only Kinetiko Operations Commencement of drilling Coring rig operating Drilling Hole KA-03 Gassy carbonaceous Mudstones KA04 KA02 Gassy coal sample Core into sealed Desorption baths KA06 controlled flaring (311m) containers spontaneous gas 12 Kinetiko Energy Ltd
Slide 13: Exploration Program will Improve Project Certainty
Exploration Program will Improve Project Certainty* Pilot production wells (permeability tests) are key to proving “Reserves” For personal use only 1P 2P 2-3 pilot production wells – commence Q1 2013 3P 4-8 pilot production wells – commence Q3 2012 16 Exploration Holes - by Q3 2012 Contingent Resour
Slide 14: Commercialisation – selecting the right customers
Commercialisation – selecting the right customers For personal use only Gas Commercialisation Options Attractiveness State owned Monopoly - requires flame modulation in existing coal CNG to Eskom Majuba Power station fired power plants. Majuba is ~6kms from tenement CNG to Eskom’s new or existing fa
Slide 15: Contents
Contents For personal use only Amersfoort Project Lessons learnt to date Gas and Exploration trends 15
Slide 16: Lessons learnt – focused Strategy
Lessons learnt – focused Strategy Our 5 Year Strategy is to focus on CBM Exploration and selective targeting of other gas For personal use only opportunities. Our Strategy is comprised of Four Pillars, see below. Kinetiko Growth & Transformation (Value Realisation) Focus on CBM and opportunistic to
Slide 17: Lessons learnt – Growth from Amersfoort
Lessons learnt – Growth from Amersfoort For personal use only 17 Kinetiko Energy Ltd
Slide 18: Lessons learnt - Growth
Lessons learnt - Growth For personal use only The way we’ve explored Amersfoort has confirmed our credibility Independent O&G (Gustavson Associates) assessed Kinetiko’s 4 TCP areas (7,911Km2): Prospective Resource of Gas In Place (GIP) estimate of 9.3tcf 2C Kinetiko has 12 months to perform
Slide 19: Lessons learnt - Growth and scale
Lessons learnt - Growth and scale For personal use only Kinetiko is rapidly expanding it’s Resource/ Reserve base Kinetiko of the future Amersfoort Project today 19 Kinetiko Energy Ltd
Slide 20: Lessons learnt – it's more than ticking boxes
Lessons learnt – it’s more than ticking boxes For personal use only *Kinetiko has a strong foundation & an attractive growth potential Amersfoort Project GIP 1.7tcf Kinetiko (100% owned) land (TCP) adds extra GIP 9.3tcf Strong JV Partner (and new project potential) Local and Regional Market Demand U
Slide 21: Lessons learnt - key to success
Lessons learnt - key to success CBM is a new frontier for South Africa and could be world class For personal use only The right JV partner Teaming with flexible local contractors and up skilling Landowner relationships remains the key Replace environmental fears (myths) with facts Constr
Slide 22: Lessons learnt - key to success
Lessons learnt - key to success Amersfoort project progress, safety & environment builds credibility For personal use only Kinetiko increased exploration area to 16,000Km2 in 1 year Blend mining and O&G exploration approaches Don’t overlook shallow conventional gas Use photographs and vide
Slide 23: Contents
Contents For personal use only Amersfoort Project Lessons learnt to date Gas and Exploration trends 23
Slide 24: Gas trends - South Africa Needs Energy & Gas
Gas trends - South Africa Needs Energy & Gas For personal use only Intensive power demand exceeds supply (crisis looming) South Africa generated 34GW (2011) and up to 80GW forecast 2030 Coal mining supplies ~90% of energy, costs are rising Little Domestic Gas availability – price increasing
Slide 25: Gas trends - South Africa Electricity Demand
Gas trends - South Africa Electricity Demand* For personal use only Prices doubling in 4 years* Base case Gas price ~$10/GJ and High case of ~$20GJ* * Source: Eskom and South Africa’s Integrated Resource Plan to 2030 (dated 2011): 25 Kinetiko Energy Ltd
Slide 26: Gas trends - South Africa Markets
Gas trends - South Africa Markets Gas is currently 5% of energy mix but gas need is increasing fast ! For personal use only Ten of RSA's largest coal fired power stations within 250kms of Amersfoort Secunda Eskom seeking gas /coal co -fired to meet increased efficiency and environmental trends
Slide 27: Gas and Exploration trends
Gas and Exploration trends South Africa For personal use only Orange basin (offshore) & shale gas moratorium Karoo Basin CBM is low hanging fruit Onshore Regulation slowly catching up Botswana & Namibia Governments encouraging investment in CBM Sasol Origin JV Entry Coal assets but uncer
Slide 28: Gas and Exploration trends
Gas and Exploration trends Nb. CBM is unconventional here For personal use only Blend mining and O&G approaches Exploration strategy Utilise in country mining expertise and rigs Don’t just look for CBM (e.g. wireline) Consult with Government authorities Pay due attention to water at the
Slide 29: Any Questions?
For personal use only Any Questions? 29
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