24th Jun 2014 09:19
LONDON (Alliance News) - Kea Petroleum PLC Tuesday said it has assigned a rig contract to Drill Force New Zealand Ltd to start the drilling of its Puka-3 well on the PEP51153 licence, located onshore in Taranaki in New Zealand.
The New Zealand-focused oil and gas company said Drill Force will use its Rig-6 to drill the site, with preparations progressing and test drilling to start in late July.
The Puka-3 well is targeting Mt Messenger formation sands at roughly 1,580 metres depth, interpreted from a 3D seismic study recently carried out at the site.
The drilling of Puka-3, from the same well pad as the producing Puka-1 and Puka-2 wells, is an important component of its farm-out agreement with MEO New Zealand Pty Ltd, which is intended to boost existing production and assist future field appraisal for Kea Petroleum.
The company said earlier in June that it had completed the workover part of its farm out agreement at the site, and that all of the funding necessary for the phase 1 process had been received and the Puka-2 well was back in production following a workover.
In April, Kea said it had agreed to a NZD14 million staged work programme on site to boost production and further appraise the Puka discovery.
As part of the deal, MEO Australia would earn a 30% interest in the site via a payment of NZD4 million in order to complete the phase 1 plan for the site, which consisted of the workover of both existing Puka wells to boost production, drilling of a new well, and testing of the suspended Douglas 1 well.
Now that phase 1 is finished, MEO can elect to earn a further 20% interest in the site within six months, through a further payment of NZD7.5 million which will be used for a second phase on site.
The second phase will include the construction of a new central drilling and production facility, drilling of further appraisal wells and horizontal drilling techniques.
Kea Petroleum shares were up 9.7% to 1.52 pence, putting it amongst the top AIM All-Share risers on Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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