Renergen, a junior company whose shares trade on the Johannesburg and Australia stock exchanges, expects to have results within days from what could be a game changing exploration well onshore South Africa.
The probe, said chief executive Stefano Marani, is being drilled in Free State province within a production right operated by the company that covers the Virginia gas and helium project, which is developing a Witwatersrand-age prospect.
Marani told delegates at the Africa Oil Week conference in Cape Town on Tuesday that results should be known within “five to six days, hopefully".
The horizontal well is targeting a sandstone structure that Marani said was “accidentally discovered” in 2016 when Renergen drilled a probe based on “anecdotal evidence that suggested there would be gas".
That well “kicked and was under massive pressure,” he explained, “with helium clocking in at 11%” of the total gas flow.
What this probe had hit by chance was a 90-square-kilometre sandstone play that is 100 metres thick with 15% porosity and 260 millidarcy permeability.
Marani said the structure is just 300 metres below the land surface, has a dolorite cap and “some enormous faults and fissures feeding it with gas and helium".
This probe, he said, “has the potential to be South Africa’s game changer onshore".
The Virginia project, meanwhile, aims to tap 148 billion cubic feet of gas and 3.4 Bcf of helium.
The field is expected to be operational in the first half of 2021 and will be designed to produce, each day, up to 2700 gigaJoules of liquid natural gas and 350 kilogrammes of liquid helium.
According to Renergen, “this will make the plant the first commercial LNG facility in the country".
Western Shell Cryogenic Equipment Company of China has been awarded the contract to supply the technology and equipment for the processing plant alongside South Africa-based EPCM Bonisana.
Opic, a US government agency, is providing a $40 million loan to help fund the project.