Kinetiko Energy Limited provided the following update on its onshore gas exploration and production development activities. Core well 270-06C is approximately 64km south of the successful Majuba core well 271-23C and grows further confidence of the continuity of the intersected strong gassy geology and potential for gas production development through a fairway of approximately 125kms. Gas Testing Results 270-06C: The geophysical wireline log overlays the density (black) and neutron (blue) curves at depth. The wireline log shows 4 major features of the 270-06C exploration hole: The dolerite sill cap rock provides a vertical gas seal down to 240m above the sedimentary rock below. The low natural gamma radiation on the left sides is highlighted yellow to emphasise the sandstone reservoir layers. On the right sides, the seams of coal are displayed with low density. And the best feature of all is in the middle, the gas-effect crossover in the sandstones, shaded red, interbedded with carbonaceous layers without the gas effect. The curves diverge in the presence of gas-filled porosity (red shading). Between 240-490m, below the dolerite intrusive cap rock, there is about 147m of sandstone which strongly exhibits this gas effect. This was confirmed by observations of residual gas in the core as it came out of the hole. Only 2 coal zones were thick enough to desorb, from about 273m and 337m. They are still being measured for gas content but are approaching 7 and 5 m³/tonne respectively, and still climbing. The coals are very thin here, but the siltstone and mudstone zones between the sandstones are quite carbonaceous and are the source of most of the gas. The gassy sandstones in this hole compare very favourably to Kinetiko's other project areas,
where test wells have produced commercial rates of gas flow. This proves that the assessed "Sandstone Resource Play" extends much further to the south. Other Resource Plays (CSG and shale gas) target low-permeability unconventional reservoirs which require fracking. This project combines traditional sandstone reservoirs, interbedded carbonaceous siltstones and mudstone source rock and the unconventional trapping mechanism of igneous dolerite dykes and sills. This has produced an area of thousands of km² underlain by shallow sandstone gas deposits, tapped by low-cost wells without fracking.