Quarterly Activities Report Ending 30 December 2025

Kinetiko Energy Ltd (ASX: KKO) (Kinetiko or the Company) is developing an energy solution for South Africa focused on commercialising 100% owned advanced shallow conventional gas projects in the Mpumalanga Province. It is pleased to provide the following update on its onshore gas exploration and production development activities during the October - December 2025 quarter.

HIGHLIGHTS

• Health, Safety and Environment
  • No accidents, injuries, health, or environmental incidents reported during the quarter.
  • Over 3,750 person-hours recorded this quarter without reportable safety incidents, with safety meetings conducted before each shift at well sites.
• Production Test Well Update: 271-KA03PT06 and 271-KA03PT10
  • Continued flow testing from production test wells 2271-KA03PT06 and 71-KA03PT10 delivered sustained strong gas flows, producing a combined total volume of nearly 8 million cubic feet of gas.
  • 271-KA03PT06 experienced an initial decline before plateauing after 27 days, producing 4,432 Mscf at an average rate of 164 Mscfd.
  • 271-KA03PT10 showed no discernible decline after 40 days of continuous flow testing, producing 3,522 Mscf at an average rate of 91 Mscfd.
  • Very high methane content, exceeding 98.5%, recorded in produced gas.
• Joint Development Agreement signed with FFS Refiners to launch gas field development
  • Executed binding Joint Development Agreement with FFS Refiners to co-develop a pilot LNG plant at Brakfontein.
  • Phase 1a of Project Alpha to include co-funded drilling of five new wells, upgrades to existing wells, gas testing and reserve certification.
  • Parties to prepare LNG business case, apply for a production right, and establish a joint steering committee.
  • FFS Refiners advanced R6,200,000 (approximately $560k), net of management fee of R300,000, to Kinetiko’s wholly owned subsidiary Afro Energy (Pty) Ltd being the first tranche of commitments to co-development the first phase of a pilot gas plant for the production of LNG at Brakfontein.
• The funding will accelerate Phase 1a of Project Alpha and includes:
  • Co-funded drilling of additional production wells and upgrades to existing wells at Brakfontein
  • Gas testing and appointment of a competent person for certification of gas reserves
  • Preparation of an LNG business case and production-right application; and
  • Application for a production right
• The advance represents the first tranche of joint funding commitments of FFS totalling
  • R28,656,000 (approximately $2.58m1) for Phase 1a Project Alpha
• Trading Commences on North American OTC Market
  • Listing on OTCQB Market approved and trading commenced under the US ticker KKOBF on Tuesday 23 December 2025.
  • OTCQB Market is a recognised North American marketplace for emerging and international companies, providing enhanced access to North American investors.
  • The listing is expected to improve visibility, trading access and liquidity for North American investors, complementing KKO’s existing ASX listing.
• Successful Share Placement
  • Firm commitments received for a $3.15M Placement, cornerstoned by key South African and Australian investors.
  • Placement complements FFS Refiners Joint Development Agreement funding.
  • Funds will be used to accelerate phase 1a of Project Alpha cluster of production wells at Brakfontein and to undertake additional exploration activities to grow resources and reserves.
• Cash
  • As of 31 December 2025, Kinetiko maintained an effective financial position with no debt and approximately $2.353m in available funds comprising $1.96m in cash, $247k in Afro Gas Development, an entity incorporated to commence a joint venture with the IDC, and $146k of funds advanced by FFS Refiners as part of the joint venture agreement. Cash position was significantly lifted by the November capital raise.

Figure 1: Production Test Well 271-KA03PT06 daily gas flow rate. The gas volume recovered during the 27 days of continuous testing produced 4,432 Mscf of ~98.5% methane.

Table 1: Production test well 271-KA03PT06 technical details

Well 271-KA03PT10: Delivered ongoing strong gas flows

During the quarter, continued extended flow testing from production test well 271-KA03PT10 at Brakfontein delivered positive results. After 40 days of continuous testing, the well produced a total of 3,522 Mscf of gas at an average rate of 91 Mscfd (Figure 2). (Refer ASX Announcement 20 October 2025.) Both 271-KA03PT10 and 271-KA03PT06 are located within 500 metres of historic production test wells and are expected, once connected, to form the initial producing gas well cluster supplying the planned micro LNG pilot plant, being co-developed under the binding joint development agreement with FFS Refiners.

Data from the extended flow test will be used to refine production cluster economics and support ongoing feasibility studies. The independent reserve calculation completed by Sproule B.V. in July 2023 assumed an initial production rate of 50 Mscfd per well, which was considered commercially viable2. Sustained flow rates materially above this level are expected to enhance development economics and support potential increases in reserve estimates.

Click here for the full ASX Release

This article includes content from Kinetiko Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.