Puka Testing Update and Drilling of Puka 3

Kea Petroleum plc

("Kea" or the "Group")

Puka Testing Update and Drilling of Puka 3

Kea Petroleum plc (AIM: KEA), the oil and gas company focused on New Zealand, is today pleased to announce the results of testing Puka wells 1 and 2, some views on the potential size of the Puka fields, possible future production levels and plans to drill Puka 3.

Preliminary analysis of the recent 3D seismic over Puka as well as testing results to date indicate that both Puka discoveries are at the edge of a substantial channel. Regional experience with Mt Messenger discoveries is that sand intersections can vary from 3 metres to 50 metres. Puka 2 is only a 3.6 metre net sand and whilst initial flow tests achieved rates of over 700 barrels of oil per day ("BOPD"),flows from such thin pay could not be expected to be sustained at particularly high levels.

The sustained rates totalling over 300 BOPD detailed below are certainly commercial but the opportunity to achieve total daily production rates of over 2,000 BOPD, which remains the Group's objective, rests on more holes being drilled into thicker sands.

Advanced but not final interpretation of the 3D, which is expected within three months, together with regional experience would suggest a high probability of finding thicker pay within the main channel.

Hence, it is the Group's intention to proceed as quickly as possible to the drilling of Puka 3. The Group has adequate cash resources to drill this hole as well as complete the ongoing capital production works at the Puka site.

Sales of oil to date from Puka have raised NZ$1.45M (£730,000).

Puka test update

Testing at Puka is continuing with both Puka 1 and Puka 2 currently shut in for pressure build up whilst surface equipment is relocated from test configuration to permanent positions. Both wells have been flowed under variable conditions to determine optimum flow rates from a production and reservoir management perspective. A total of 14,100 barrels of oil has been produced during the testing to date. Puka 2 was flowed for a total of 31 days since testing began at an average rate of 211 BOPD and 0.167 million cubic feet of gas per day ("MMCFD").

Puka 1 was flowed in isolation for a total of six days at an average rate of 102 BOPD and 0.675 MMCFD.

Surface equipment is currently being relocated and reconfigured to allow for simultaneous co-mingled production from Puka 1 and Puka 2. This process is expected to take between 21 and 28 days after which time production flow testing determining methods to maximise flow rates without damaging the well will recommence.

Puka 3D seismic interpretation

Seismic interpretation and mapping of the field is on-going, with a major channel feature being interpreted to the north and east of the current Puka surface location potentially covering an area of approximately 8 km2. Exactly what resource estimate might be calculated from this is speculative until the 3D analysis is completed and further drilling confirms present indications. However, Kea remains comfortable with previous estimates of upside of 7-10 million barrels of oil being recoverable from the Greater Puka field.

Preparations for the drilling of Puka 3 are progressing, with the well intended to target thicker lower Mt Messenger sands within the channel feature. The final bottom hole location will be determined once the 3D seismic interpretation has been finalised in approximately six weeks. This will allow spudding of Puka 3 within about three months.

Finalisation of the 3D seismic mapping, combined with analysis of the production tests on Puka 1 and 2, following their pressure build-ups during shut-in, will be used in refining the resources estimates of the Puka Field.

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.

For further information please contact:

Notes to Editors:

Kea Petroleum is an AIM listed oil and gas 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.