Drilling and Prospects Update

Kea Petroleum plc

("Kea" or the "Group")

Drilling and Prospects Update

Kea Petroleum plc (AIM: KEA) today announces that New Zealand Petroleum and Minerals has extended the duration of its license PEP 381204 for a further five year period. Kea is in an advanced stage of planning for drilling the Mauku 1 well in the PEP 381204.

PEP 381204

PEP 381204 straddles the coast line and covers an area of some 252 km2 in the Northern Taranaki Basin. The area is considered to be highly prospective with numerous prospects and leads identified within it. Planning is well underway for the drilling of Mauku 1, which is subject to a funding and offtake agreement with Methanex and which is located on the onshore portion of the permit. Engineering and design of the well has been completed and long lead items sourced. Local consents are in the process of being finalised with the local Maori Iwi and Waikato Regional Council having already consented to the well and associated construction works.

Kea Petroleum currently has an option for a further well using the NRG rig which it intends to use for the Mauku 1 well. The rig successfully drilled the recent Douglas 1 well for Kea, which was completed ahead of schedule and under budget. At this time the Mauku well is anticipated to spud in late Q4 2012.

Douglas-1

Jet pumping and swabbing operations have ceased at Douglas-1 and the well is currently suspended for a period of approximately 2 months prior to the recommencement of testing operations. Formation water, from extensive fractures within the Tikorangi, mixed with fluids lost down hole during drilling operations dominated flow during testing. During the suspension the fluid contacts may equilibrate, such that hydrocarbons enter the wellbore.

The Douglas prospect in the Tikorangi is a fractured limestone play similar to the adjoining Waihapa oil field. Experience from several Waihapa wells demonstrated that only after allowing the fluids to equilibrate were these wells established as commercial oil producers. Kea will be unable to determine whether Douglas will follow this pattern until it resumes testing operations in 2 months time.

Puka-1

Sourcing of the equipment to commence a longer term production testing of the Puka-1 well to establish production rates and reservoir characteristics continues and significant progress has been made in this regard. Kea anticipates the longer term testing program to start within the coming fortnight. The 100% owned Puka-1 well is in permit PEP 51153 within New Zealand's onshore Taranaki Basin. Kea announced on 10 April 2012 that Puka-1 had intersected a 40m interval of Mt. Messenger reservoir quality sands with a net pay of between 4.5m and 9m. Kea has not altered its original estimate of gross recoverable resource of one million barrels of oil with a potential upside of up to three million barrels of oil. On 11 June 2012 Kea announced that oil recovered from sampling was excellent quality light oil with a density of 43.7 Degrees API and a relatively low pour point of 15 Degrees Centigrade. Subject to satisfactory flow rates being established, Kea intends to quickly drill further holes to enable commercial production in scale. 

This release has been approved by non-executive director Peter Mikkelsen FGS, AAPG, who has consented to the inclusion of the technical information in this release in the form and context in which it appears.

 To learn more about Kea Petroleum, visit: www.keapetroleum.com or contact:

Notes to Editors:

Kea Petroleum is an AIM listed oil and gas exploration company with interests in four petroleum exploration permits in the Taranaki Basin of New Zealand. Kea listed on the London market in February 2010.