Description:
A research report from MST Access highlights Kinetiko Energy (ASX:KKO) as an emerging participant in South Africa’s domestic gas sector, supported by a base value valuation of AU$0.49 per share. The company’s project covers 5,366 square kilometers and is located 200 km south-east of Johannesburg, within an established infrastructure corridor close to industrial users, including Sasol facilities.
Unlocking a world-class resource
MST Access has its rating from AU$0.490 per sharewhich represents a significant upside over current trading levels. This rating is supported by that of Kinetiko 6.0 Tcf (2C) contingent resource– an energy equivalent of about a billion barrels of oil. These assets are strategically located in Mpumalanga Province and are adjacent to the country’s primary energy infrastructure, including large coal-fired power stations and Sasol’s Secunda power station.
Operational excellence and purity
The report highlights recent manufacturing successes at the Brakfontein well clusterwhere current tests achieved sustained speeds 188 Mscfd. Crucially, the gas produced shows a higher methane purity 98.5 percent . This exceptional quality enables a “plug and play” approach with minimal processing, significantly reducing capital expenditure.
Strategic partnerships and global reach
Kinetiko’s transition to commercialization is accelerated by two key pillars:
- Project alpha: A binding joint development agreement with FFS refineries to jointly develop a pilot LNG plant.
- Infrastructure Synergy: A partnership with the Industrial Development Corporation (IDC) to develop gas-to-energy fields, starting with a target of 50 MWe.
To broaden its investor base, Kinetiko also recently started trading in the North American market OTCQB market (ticker: KKOBF). With a low-cost, no-fracking extraction model and a domestic market hungry for reliable energy, Kinetiko is uniquely positioned to deliver long-term value to shareholders while driving South Africa’s economic recovery.
MST Access notes that South Africa currently imports approx 90 percent of natural gas comes from Mozambiquewhere the supply is expected to stop mid 2027creating an expected domestic supply gap. Kinetikos resource scale, test performance, and defined development agreements are highlighted as key factors that support long-term development potential.
Highlights of the report
- Independent Resource Certification: 6.0 TCF 2C contingent gas source, 5.8 TCF 2U potential source, 6.4 BCF reserves
- Strong gas test results
- Well 271-KA03PT10: 3,522 Mscf total, 91 Mscfd 40-day average
- Well 271-KA03PT06: 4,432 Mscf total, 164 Mscfd average, 14-day average 162 Mscfd, peak 188 Mscfd
- Strategic Development Agreements:
- FFS Refiners Phase 1a funding: ZAR64,312,000 (AU$5,675,000); LNG production: 5,000 tons per year → 25,000 tons per year → 125,000 tons per year
- IDC LNG expansion: 60 ktpa → 600 ktpa → 1,800 ktpa; Phase 1 cost: AU$138,000,000
- Infrastructure and location advantage
- Project area: 5,366 km², 200 km southeast of Johannesburg, near Sasol and industrial users
- South African gas supply dynamics: 90 percent of domestic gas is imported from Mozambique; expected supply reduction by mid-2027
- Valuation context: MST Access base case valuation: AU$0.49 per share
For the full analyst report, click here.
This content is intended only for persons residing in or accessing the Website in jurisdictions with securities and other applicable laws that permit the distribution and consumption of this content and whose local laws recognize the scope and effect of this Disclaimer, the limitation of liability and the legal effect of the exclusive jurisdiction and applicable statutory provisions. [link to Governing Law section of the Disclaimer page].
All investment information on this website, including third party research reports, is provided for informational purposes only, is general in nature and not tailored to the specific needs of any person, and is not a solicitation or recommendation to buy or sell any security, or intended to provide investment advice. Readers are cautioned to seek advice from a registered investment advisor regarding the appropriateness of investing in the securities or investment strategies mentioned on this website.
#Kinetiko #Energy #ready #tackle #South #Africas #gas #supply #gap #MST #Access #Report