11th Jun 2014 11:44
LONDON (Alliance News) - Kea Petroleum PLC Wednesday said it has completed the workover part of its phase 1 farm-out agreement with MEO Australia Ltd on the PEP51153 licence, located onshore in Taranaki in New Zealand.
The New Zealand-focused oil and gas company said all of the funding necessary for the phase 1 process has been received and the Puka-2 well is now back in production following the workover operation.
The workover started on June 2 and included the installation of a replacement pump to change the downhole configuration of the site, something the company felt would better suit the reservoir characteristics of the well.
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.
Once 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 3.2% to 1.60 pence on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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