viewKea Petroleum Plc

Kea Petroleum acquired 10% stake in AWE’s oil and gas project in New Zealand


Kea Petroleum (AIM: KEA) has signed an agreement with AWE’s (ASX: AWE) subsidiary AWE New Zealand Limited to acquire a 10% participating interest in PEP38524, an offshore area of 2,469 sq km (square kilometers) situated near the northern end of New Zealand's South Island.

Kea will contribute towards the cost of the Tuatra-1 exploration well, the first on the project, which will be drilled in July 2010, to earn its 10% equity. Kea’s participation in the drilling of the well is capped at US$3 million.

In order to fund the drilling and further development opportunities, the company has raised £7 million by issuing 43.7 million shares representing 9.5% of the company’s current issued share capital. The placing price represents a 100% premium to the IPO (initial public offering) price.

Tuatara-1 will test the oil potential of Moki Sands, in a structure, which closely resembles that of the Maari oil field, where the Moki Sands reservoir was successfully brought into production last year at a rate approaching 40,000 barrels of oil per day. Kea's internal mid-case estimate of recoverable oil reserves in the event of success at Tuatara-1, based on the data and modeling provided by AWE, is 80 million barrels.

The Tui oil field has generated some US$3.5 billion in revenue during about 1,000 days if production.

“We are very pleased to enter into this joint venture with AWE, who have demonstrated their technical and commercial expertise by developing and operating the Tui oil field…In the event that Tuatara-1 is successful, we have high confidence in their ability to bring a discovery into development in an expeditious and commercially effective manner and we look forward to partnering with them in this and other exploration ventures in the future,” said Chairman of Kea Petroleum Ian Gowrie-Smith.

Kea has also said that the Beluga-1 well was now drilling ahead to its second casing point, having completed its first surface casing to 909 meters. On Wingrove-2, orders have now been placed for custom designed downhole heating equipment for the well, where commencement of production testing of intersected log oil pay is scheduled to commence later this year.

Quick facts: Kea Petroleum Plc

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