Kea Petroleum (LON:KEA) will move directly to testing the Douglas-1 well in New Zealand, which has encountered “encouraging" hydrocarbon shows.
The testing of Douglas-1, located on permit PEP 51153 within the Taranaki basin in New Zealand, is expected to take four weeks.
The Douglas completion and testing is budgeted to cost US$1.4 million.
The company noted that the well was drilled from the former Wingrove site which has existing production facilities and this will assist production if it proves to be a commercial discovery.
Targeting of the Douglas 1 well was assisted by the recent completion of a key seismic line over the Douglas prospect.
In the meantime, the Drillforce rig has arrived on the Puka-1 well in permit PEP 51153 to begin completion of the well and testing, which should take two weeks.
The well has intersected a 40 metre interval of Mt. Messenger reservoir quality sands with a net pay of between 4.5 and nine metres with logs indicating moveable hydrocarbons.
Kea has not altered its original estimate of gross recoverable resource of one million barrels of oil with a potential upside of up to three million barrels of oil.
The company also told investors that it entered an agreement to dispose of its interests in two licences in Australia for A$1.24 million.