16th Feb 2015 14:52
LONDON (Alliance News) - Kea Petroleum PLC Monday said it has launched a review into the "strategic options" for the company, including a potential merger, acquisition or asset disposals.
In a statement, the New Zealand focused oil and gas company said it is undertaking a "careful evaluation" of its business plan, operational assets and development strategy, and it is looking at the market valuation of its assets and capital structure.
Last month, Kea said it had shut-in production at the Puka site in Taranaki in New Zealand, after it was unable to resolve the mechanical issues it has faced with the Puka-1 well. Amid the fall in the world oil price, it decided to shut in production until the economics of the project improve.
Kea had also said in January it was in talks to secure additional funding to cover an expected funding shortfall in 2015, but said Monday that so far it has not entered any funding agreements, and discussions are continuing.
"As a consequence of a combination of these factors, the board has decided to commence a strategic review. In the meantime the company has taken a number of cost-cutting measures to preserve its working capital which remains tight," the company said in Monday's statement.
Kea said the review of strategic options may include a corporate transaction such as a merger with, acquisition of, or subscription for the company's securities by a third party, a sale of the business. or a farm down or disposal of assets.
Shares in the company were trading 3.1% lower at 1.24 pence Monday afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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