Drilling of Puka 2 Commenced Yesterday

Kea Petroleum plc

("Kea" or "the Company")

Drilling of Puka 2 commenced yesterday

Kea Petroleum plc (AIM: KEA) is pleased to announce that drilling of Puka 2 has commenced using the DrillForce Mayhew Rig 1. The hole is expected to be drilled to a total depth of 1890m. The drilling is expected to be suspended after surface casing is run at approximately 400m to allow for the commencement of the 3D seismic programme over the area in mid-December and to be recommenced using the DrillForce Rig 6 in mid-January. This will be completed by early February with testing to start later in February.

Puka 2 is designed to appraise the Puka field and test whether the Puka 1 discovery is a stratigraphically controlled rather than a simple structural field.

As a simple structural field, directors remain confident that the Puka 1 discovery should be in the region of a 1 million to 3 million barrels of oil discovery. However, should it prove to be stratigraphically controlled, then the size of the discovery could be considerably larger, perhaps in the region of 7 to 10 million barrels of oil.

Puka 1 was drilled as an exploration hole with a small diameter well bore and is not ideal for production given the waxy nature of oils commonly produced in the Taranaki basin. Puka 2 in contrast is being drilled to a much larger diameter. This should allow for continuous oil and gas production at good rates and is more suitable for addressing wax build up issues.

Puka 1 flow rates and down hole pressure readings confirmed that the discovery was of commercial proportions. Maximum flow rates of 310 bopd and 1.8 mmcf/d were achieved although sustainable rates of between 150 to 200 bopd are thought more realistic. Puka 1 is presently shut in for testing pressure build up.

Ian Gowrie-Smith, Chairman of Kea Petroleum commented:

"The combination of the drilling results of Puka 2 and the 3D seismic should allow us to progress towards our goal of 2,000 bopd target in the most sensible and expeditious manner and is expected to be a big step forward in our ambition to be a profitable oil and gas producer." 

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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 AIM market in February 2010.