Signs Heads of Agreement for Puka Farm-out

Kea Petroleum plc

("Kea" or the "Company")

Signs Heads of Agreement for Puka Farm-out

Kea Petroleum plc (AIM: KEA), the oil and gas company focused on New Zealand, announces that it has signed Heads of Agreement ("HoA") with an oil and gas company quoted on the Australian Stock Exchange in connection with the further appraisal and farm-out of PEP 51153, including the Puka discovery.

The Directors are pleased to advise that the non-binding HoA, subject to closing, will result in a staged farm-out of an interest in PEP 51153. Kea has entered into an exclusive period of final due diligence and transaction documentation with a view to completing and announcing full details of a transaction in early 2014.

The HoA envisages a staged farm-out whereby Kea will be funded through an appraisal of Puka with one firm well and up to three further wells, fully funded by Kea's partner, subject to appropriate cost caps to ensure a disciplined appraisal approach.

The proposed farm-out is the result of a comprehensive strategic review, announced on 3 September 2013, and a competitive farm-out process during which a significant number of indicative offers were received. This process was conducted with the assistance of Gresham Partners Ltd, Sydney.

Kea's Chairman, Ian Gowrie-Smith, commented: "We were pleased with the response to the farm-out process, and by the technical validation and endorsement of Puka by a significant number of highly credible oil and gas companies. We selected the current party on the basis of the terms offered and our assessment of their technical competence. We look forward to concluding a transaction that will enable Kea shareholders to retain material exposure to Puka while benefitting from further appraisal of the resource on a funded basis, commencing early next year."

Production testing from the existing Puka appraisal wells continues and has now stabilised at approximately 150 barrels of oil per day with 1.2 million standard cubic feet of gas per day, resulting in total cumulative production of 32,000 barrels with revenue to date of US$3.2m. The 150 bopd rate has remained remarkably constant over the past two months, which typifies the usual Mt Messenger reservoir performance of initial decline followed by a long period of level production, which we have now entered.

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:

Kea Petroleum plc

David Lees, Executive Director Tel: +44 (0)20 7340 9970

RBC Capital Markets (NOMAD) Tel: +44 (0)20 7653 4000

Stephen Foss

Daniel Conti

WH Ireland Limited Tel: +44 (0)20 7220 1666

James Joyce

Nick Field

Buchanan Tel: +44 (0)20 7466 5000

Mark Court

Sophie Cowles

Notes to Editors:

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