The location and unique geological characteristics of the Amersfoort Project makes gas production achievable in the short term.
The four main areas that make the pathway to early production possible are:
1. Extended Independent Flow Testing of Permeability Test Well KA-03PT on ER56 September 2018
Endress & Hauser AG of Switzerland and Franklin Electric Co. Inc of the US are world leaders in the design and provision of process control and well pumping systems.
They partnered up to test an innovative pumping, separation and control package that was trialled on the previously successful flow-tested well KA-03PT, “ The Beast”.
The estimated cost of equipment installation and monitoring amounts to circa AUD$950,000.
The 1st phase of equipment testing was carried out between the 3rd – 7th of September 2018 and intended to provide data on equipment performance and well flow characteristics. The following outcomes were achieved,
- The integrated system achieved a much higher level of water / gas separation efficiency.
- The tested well head separator and control systems delivers possible major commercial advantages for field development. Potentially one separator and control system package serving multiple wells as opposed to one well utilising one well head separator and control system.
- An absolute open flow rate of 300Nm3/hr was achieved at a 2.15bar wellhead pressure without any well clean up or other optimised parameters.
- Gas quality is at the exceptional level of 99.5%, methane was >1% above previous levels and could eliminate the need for treatment prior to monetization.
- Initial indications from the installed system are a 95% recovery of gas from produced groundwater, a significant increase from previously used separation equipment.
2. Interval and isolation well completions
Amersfoort exploration drilling and production wells are relatively inexpensive as compared to other gas exploration scenarios.
The shallow depths for drilling of exploration and production wells is a main driver for keeping costs low and thus strengthening the project economics. To date drilling permeability test pilot wells at Amersfoort have utilised cost-effective and simple, open hole or “Barefoot” completion.
As structural and geological understanding has advanced, zone interval and isolation drilling will now be adopted as part of the drilling program. This will take well efficiencies and production profiles to the next level. Lets the gas out, assists with lowering water production and avoiding profile that is not productive.
A production well based on this completion method will cost approximately $600,000 AUD. The fully engineered solution
will further increase our knowledge of the production filed profile, while in simple terms letting more gas out and keeping a greater amount of water in the ground.
STAGE 1 Hole drilled to depth 400 to 550m, surface casing to 150-190m, electrical logging.
STAGE 2 Drill stem testing on logged gas prone intervals.
STAGE 3 Set production casing @ total depth, perforate case to gas prone sandstone intervals.
STAGE 4 Production from multiple gas prone sandstone intervals.
STAGE 5 Final production stage from coal seams using isolation packers.
3. High Resolution Gradiometric Aeromagnetic Survey
Flying aeromagnetics is an effective means of imaging the location, detail and extent of, dolerite sills, dykes and faults, while defining gas reservoir compartments and major geological boundaries/structures in the project area.
There is a strong magnetic contrasts between the Karoo sandstones, shales, dolerite sills and dykes. This allows for the appropriate data processing and modelling enabling reservoir geology to be modelled down to basement depths.
Kinetiko Energy initiated the flying of 3,555 line km / 145km2 of high resolution gradiometric aeromagnetic survey over ER56, which was very successful. The data established the, “Tanked nature”, of the gas resource and has driven the target locations for further drilling. This has given a much greater understanding of the structure and geology within the survey area.
As per the Petroleum Agency of South Africa exploration program, further high resolution aeromagnetic & radiometric survey, data acquisition, processing and ancillaries has been carried out over the Amersfoort Project,
- ER 38: 10,171 line km
- ER 56: 1,392 line km
This 11,500 line km flight over ER 38 and 56 has provided the geological basis for,
- Locating the 1st effective test wells on ER38.
- More informed reserve calculations in ER38.
- Further appraisal /production well locations on ER56.
- Detailed data on deeper structures in ER38 for the possible presence of helium.
4. Economics and offtake
Drilling and well completion in this scenario are relatively shallow and inexpensive as compared to other gas projects given the nature of the Amersfoort geology. The gas is of a very high quality and purity and water production at current levels is manageable.
- Pilot test well KA-03PT has flared over 26 million Scf in 6 months.
- Sustained rate of 332mscf/d for first 6 weeks.
- Water production stabilsed at 4,000 litres per day.
- If the gas had been sold under prevailing RSA gas prices of $7 – $10USD /GJ*, say $10/GJ, payback would have easily been achieved in 10 months given well costs of ~ $220,000USD un-engineered (Barefoot completion).
- Revenues of $260,000USD.
- At $10/GJ breakeven drill and complete is achieved from peak flow of 48 mscf/day and ultimate recovery of 0.08Bcf per well. Does not include field infrastructure, overhead and associated costs.
Amersfoort Project Economics: Shallow Gas, Low Cost, Strong Economics + High Gas Pricing
*As per Industrial Development Corporation ( IDC) of South Africa independent Due Diligence program 2015 MOU on the development of initial Amersfoort Block 1. As per KKO announcement 19th of November 2018
Early Pilot Production Field Potential
The high resolution aeromagnetic flown in April 2014, revealed the geological and structural detail of the gas discovery on ER56.
From this the “Block” approach to project roll out and first monetisation was adopted.
10 areas were defined in ER56 for development, with each area approximately 3.5km2 with 20 wells per area for a total of 200 wells.
Of these ten areas, five are earmarked for initial development, with areas 1 to 5 covering approximately 18km2 or 4.65% of ER 56 for a total of 100 wells.
Simple production field design Development Block 1 = Area 1 + Area 4
Areas 1 and 4, closest to existing permeability well KA-03PT & core hole KA-02C are selected for the 1st development clusters.
These two areas 1 and 4 are known as “Block 1”.
The Block 1 Development
The program has been designed to progress with a 20 well pilot production field, based on precise geological modelling.
- 9-well appraisal & production cluster near well KA-03PT
- 2x zone isolation wells in Area 4 near well KA-02C, to be completed as production wells
- 8-well cluster of appraisal/development wells predicated on results of zone isolation wells
- Gas terminal consisting of gas treatment plant, CNG loading facilities and metering station
- A pipeline gathering system from Areas 1 & 4 to gather produced gas and pipe same to the gas terminal
- Development time approximately 11 months
The aim of Block 1 is to prove up,
- 1st certification of reserves
- Improve well production profiles
- Engineered production well completions using fully designed zone isolation wells
- Utilization of new field technology for gas flow, separation and processing
- 1st revenue from sales of gas
This exploration method has been adopted to continually define and locate potential development blocks on a roll out basis.
This ongoing evaluation will facilitate a possible shallow gas resource drill out.
With a scalable potential throughout the 2014 and 2020 survey areas, which to date has located 30 fields/areas and then across the total ground package, this could potentially see thousands of wells drilled in defined gas charged blocks.
To date these 30 fields/areas defined in ER 38 and ER 56 as described below, account for only 180km2 of the 4,604 km2 of granted exploration rights.
The above is a TMI image of ER56 showing,
- The 2014 aeromagnetic survey and evaluated pilot fields, shown as Fields 1 -10 on the left
- The 2020 survey with the interpreted compartments shown as Areas 1 – 10 on the right
These 2020 defined Areas will be evaluated as 10 further and additional gas charged pilot field areas.
Above illustrates the initial interpretations of the ER38 portion of the 2020 survey. This has defined a further and additional 10 new compartments.
Termed here as Areas 11 – 20 following on from Areas 1 – 10 in ER56, will be evaluated as further and additional gas charged fields. These are analogous to those previously identified on ER 56.
The scale of the compartments In ER38 range from around 2km2 to over 20km2 , being a total area of 124km2, considerably larger than the 2-4km2 compartments totalling an area of 56km2 as identified in ER56.
In total there are now 30 targeted gas charged areas/ fields that will be the focus of ongoing exploration and potential production.