15th Oct 2014 09:22
LONDON (Alliance News) - Kea Petroleum PLC saw its shares fall Wednesday after it said it had surrendered at area of an exploration permit in New Zealand after deciding the prospectivity of the area was insufficient to justify further exploration spending, and had decided to replace a potential drilling programme at another permit with a less-costly seismic programme.
In a statement, the New Zealand-focused oil and gas explorer and producer said the country's oil and gas regulatory agency, New Zealand Petroleum & Minerals, had accepted its notice of surrender of Area A on its 51153 exploration permit onshore along the eastern margin of the Taranaki Basin.
It said that it had decided with joint venture partner MEO New Zealand Pty Ltd that prospectivity in the 19,787 square kilometre area was insufficient to justify further exploration expenditure, although it will retain the larger 84,673 square kilometre Area B site around the Puka production site.
The company also said the regulator had approved a new committed stage of its work programme at its 381204 exploration permit, which is located part onshore and part offshore in north Taranaki.
The new work programme comprises 15 kilometres of 2D land based seismic reflection data, which will extend the data coverage over the 20 square kiolmetre structural closure at Mangahewa level, helping it to define a better well location. Kea said it is in discussions with potential industry partners to farm-out the Mauku prospect.
"We are pleased to have come to an agreement with NZP&M that eliminates the need to commit to and finance the drilling of Mauku-2 during the coming 12 months and replaces it with a relatively inexpensive seismic programme," Kea Chairman Ian Gowrie-Smith said in a statement.
"The seismic programme should help clarify this prospect further and give the company additional time and ammunition to find a farm-in partner. Kea always envisaged that Mauku-1 would need to be drilled to enable the structure to be accurately defined," he added.
Kea Petroleum shares were down 6.2% at 0.380 pence Wednesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
KEA.L