31st Mar 2014 08:53
LONDON (Alliance News) - Kea Petroleum PLC Monday said it has reached a commercial agreement on the proposed farm-out of interest in its PEP 51153 site, which includes the Puka discovery, in New Zealand.
The oil and gas exploration and development company said the documents giving effect to the farm-out and resultant joint venture are undergoing final legal review.
In December, the company said it had signed a heads of agreement over the staged farm-out of interest in the site to a company listed on the Australian Stock Exchange. In February, Kea confirmed that due diligence was continuing on the deal and conclusion is expected during the first quarter. Kea still has not named the other company involved.
The Puka site provided 39,500 barrels of production in the six months to November, but had fallen to 2,532 in January of this year due to mechanical failure of the down hole pump. Kea said that planning is underway to make significant repairs to the down-hole equipment which should be completed for production to recommence during March.
On Monday, Kea Petroleum said it has made progress sourcing the required equipment and securing a rig slot to remedy the down hole pump issues experienced at Puka 2 and expects production to recommence soon.
The company also noted that initial interpretation by the company of a 3D seismic survey conducted in 2013 over the PEP52333 site has now been completed and indicates a prospective P50 resource of 67 million barrels.
Kea Petroleum shares were up 21% to 2.48 pence, putting it in the top of the AIM risers in early trading Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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