(MENAFN- ProactiveInvestors - Australia) Molopo Energy (ASX: MPO) has been awarded South Africa's first onshore gas production right over an area of about 200,000 hectares in the Free State province.
The Virginia Licence has current proved and probable reserves of about 23 billion cubic feet o f gas based on exploration carried out in 2010.
The initial phase of the development will involve the tie-in of 4 out of the 11 pilot production wells, which produce about 1.2 million cubic feet per day.
Initial volumes of about 600,000 cubic feet of gas per day will be converted into compressed natural gas for transportation.
While timing and detailed scope of the development plans are still being finalised, the investment outlined in the production right is estimated at about A$2.4 million in the first year, A$3.9 million in the second year and A$8.6 million in the third for a total of A$14.9 million.
Full field development could result in the development of more than 200 wells pending success in further delineation of the resource as well as progress on gas commercialisaOtion opportunities.
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