RNS Number : 8146B
Kea Petroleum PLC
23 April 2012
For Immediate Release 23 April 2012
Kea Petroleum plc
("Kea" or the "Group")
KEA COMMENCES DRILLING AT DOUGLAS-1
Kea is pleased to announce the commencement of drilling of its Douglas-1 well on permit PEP 51153 within New Zealand's onshore Taranaki Basin. The Douglas prospect is mapped as a Tikorangi Limestone target at a depth of 3,000m, which Kea expects to reach in four weeks.
Oil has been produced at prolific rates from the Tikorangi Limestone reservoir in the adjacent Waihapa field, which abuts the Douglas trap at Tikorangi level.
Kea recently completed a key seismic line over the Douglas prospect which upgraded Kea's mapping of this high-upside prospect, which, in the event of a commercial discovery, could be brought into production without delay utilising equipment already on site.
Whilst the company's intention was to farm out Douglas, it has proved impossible to conclude this in a timely fashion, given the advancement of the drilling date by several months and the very recent incorporation of the new seismic data.
Update on other Drilling Programmes
On 10 April 2012 Kea announced that Puka-1 struck oil having intersected a 40m interval which includes between 4.5m and 9m of Mt Messenger sands. Independent petrophysical analyses of electric logs indicate moveable hydrocarbons in good reservoir quality sands.
Both the depth at which these sands were encountered, and their extent, are in line with pre drill expectations, and Kea has not altered its original estimate of gross recoverable resource of one million barrels with a potential upside of up to three million barrels.
The well has been cased and suspended pending flow testing and, if warranted, long term production.
Kea intends to flow test this well as soon as equipment and personnel are available. Due to testing activities of recent discoveries nearby by New Zealand Energy Corp and TAG Oil in similar Mt Messenger sands, demand for testing equipment and personnel in the area are presently very stretched.
The drilling timetable for Mauku remains challenging due to extreme weather conditions, the approach of winter, public and Maori consultations and other consents. These factors are delaying access and site construction.
The Puka discovery also alters the priority of when to drill Mauku as the Puka discovery has the potential to generate early cash-flow. Consequently, resources, both human and financial, are expected to be redirected to testing appraisal wells and a production programme, if warranted.
As a result of the delay, Mauku is now expected to be drilled in the first quarter of 2013. The delay has, however facilitated a change of use in the NRG rig contract so that it has been able to move directly to drill Douglas-1 where the site was already prepared.
This release has been approved by non-executive director Peter Mikkelsen FGS, AAPG, who has consented to the inclusion of the technical information in this release in the form and context in which it appears.
To learn more about Kea Petroleum, visit: www.keapetroleum.com or contact:
Contact: David Lees, Executive Director
Tel: +44 (0) 20 7340 9970
Contact: Mathew Coakes/Daniel Conti
Tel: +44 (0) 20 7653 4000
Contact: Tim Anderson
Tel: +44 (0) 20 7466 5000
Notes to Editors
Kea Petroleum is an AIM listed oil and gas exploration company with interests in four petroleum exploration permits in New Zealand's Taranaki Basin. Kea listed on the London market in February 2010.
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