2nd May 2014 11:20
LONDON (Alliance News) - Kea Petroleum PLC Friday said that approval has been granted for the company to transfer a 30% participating interest in petroleum exploration permit PEP51153 licence, located onshore in Taranaki in New Zealand, to MEO Australia Ltd.
Kea said PEP51153 contains the Puka discoveries and the suspended Douglas well.
The New Zealand-focused oil and gas company said that New Zealand government consent has been granted for the transfer. The consent was the final condition to approve the transfer under the staged farm-out agreement.
Last month, 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 will 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 consists of the workover of both existing Puka wells to boost production, drilling of a new well, and testing of the suspended Douglas 1 well.
Following the completion of this, 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 would include the construction of a new central drilling and production facility, drilling of further appraisal wells and horizontal drilling techniques.
Kea said its phase 1 plan is scheduled to start at the end of June.
Both work programme phases are designed to move the discovery towards full field development in 2016 by reducing uncertainties in relation to resource size and recovery, the company said.
Kea said that at the conclusion of Phase 1 or 2, both parties have agreed that MEO Australia has the option to enter into negotiations to acquire KEA's remaining interest in the permit.
Kea Petroleum shares were up 2.4% at 2.00 pence Friday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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