Molopo Gets Gas Production Rights in South Africa

Molopo Energy Limited has announced that it has been awarded gas production rights in South Africa over an area of approximately 200,000 hectares in the Free State province.

An estimate of Molopo SA’s reserves and resources in the Virginia License area was performed during the exploration phase in 2010.  At that time, the P1 reserves were estimated at approximately 9.2 Bcf and P2 reserves of approximately 23.0 Bcf, and the production right application was based on this exploration work. Molopo’s overall net interest in the project is 80%.

The initial phase of development of this project will be the tie-in of 4 of the 11 pilot production wells where gas flow of approximately 1.2 mmcf/d continues. Commercialisation of initial volumes of about 600 mcf/d of natural gas is anticipated to be through the provision of Compressed Natural Gas for transportation.

Molopo expects capital investment of approximately A$2.4 million in the first year, A$3.9 million in the second year, and A$8.6 million in the third year; totalling A$14.9 million over the three year period.

In the longer term, the full field development could result in the development of more than 200 wells, the company said.