Kea Petroleum PLC Operational Update (0189R)
September 08 2014 - 1:01AM
UK Regulatory
TIDMKEA
RNS Number : 0189R
Kea Petroleum PLC
08 September 2014
For Immediate Release 8 September 2014
Kea Petroleum plc
("Kea" or "the Company")
Operational Update
Kea Petroleum plc (AIM: KEA), the oil and gas company focused on
New Zealand, is pleased to announce an update on exploration of the
Company's licences in Taranaki.
Directors are pleased to advise that exploration activities and
analysis continues on the Puka field and both Kea and joint venture
partner MEO Australia Ltd ("MEO") are working hard to incorporate
the drill and logging results from Puka-3 into the geological
models. MEO and Kea have agreed the basis of a program going
forward and subject to the satisfactory conclusion of the above
analytical work, are keen to see appraisal activity resume as soon
as possible.
Post drilling Puka-3 analysis
Drilling of Puka-3 has been followed by a significant amount of
analysis by both Kea and MEO of the logging information gained from
the well. Whilst Directors were obviously disappointed with the
result, the drilling of the well has validated the geological model
for predicting the location of thicker sands.
Previous drilling on the Puka field had suggested a deeper oil
water contact ("OWC"). The actual OWC level encountered by Puka-3
was some 30m higher than expected resulting in an uncommercial
well.
Having established that we can predict the thicker sands, we
must now develop a geological model so that we can confidently
target the thicker reservoir sands which lie above the OWC. A
number of potential Mount Messenger drill targets remain.
Tikorangi opportunity being assessed
Following completion of the Puka-1 and Puka-2 workovers and
Puka-3 drilling, one component of the Phase 1 work specified under
the farm in agreement with MEO remains - the evaluation of the
suspended Douglas-1 well.
Douglas-1 intersected a 15m zone of oil shows in the upper
Tikorangi formation, overlying a thicker section with only a trace
of oil shows. Douglas-1 was tested and flowed significant amounts
of water with no oil. The water is interpreted as coming from the
heavily fractured, deeper section. The Tikorangi limestone
intersected in Douglas-1 has been a prolific producer of oil at the
Waihapa field, located some 2.5 kilometres to the west, where some
23.6 million barrels of oil ("MMbbl") has been produced to
date.
Douglas-1 was drilled based on limited 2D seismic data and
subsequently, Kea expended NZ$4.5M on a 3D seismic survey.
Interpretation of the 3D data suggests that the targeted Tikorangi
limestone could be up to 300m higher (updip) of the intersection in
Douglas.
MEO and Kea have agreed to commence some initially limited
sampling and pressure testing of the Douglas well, which was
suspended in October 2012. Further evaluation of the Douglas well
may provide information that would qualify the opportunity of
drilling the updip prospect, which may now be accessible from the
current Puka production site. Initial analysis of the prospectivity
of the outlined Tikorangi structure suggests a recoverable resource
potential of between 5- 20 MMbbl.
Mauku
A considerable amount of work has been carried out post the
drilling of the Mauku prospect to incorporate the drilling and
logging information that was obtained by the drilling of
Mauku-1.
Mauku-1 reached a depth of 3,220m and intersected a gross 330m
Mangahewa Formation interval with a net intersection of 161m of
good quality sandstones, but which were water wet. Post well
studies and evaluation suggest Mauku-1 was drilled outside and down
dip of structural closure and that a large structural closure
exists NE of the Mauku-1 top hole location.
The management view of recoverable resource potential for Mauku
NE is in the 63-700 billion cubic feet ("BCF") range (P50 of
215BCF), with associated condensate resource potential of 19-120
MMbbl (P50 of 67MMbbl). In addition, post drill interpretation
suggests a deeper mid-Cretaceous target, the Taniwha Formation is
significantly updip of the Mauku-1 pre-drill assessment and this
multi Trillion Cubic Feet target could be tested a by a well
targeting the Mauku updip culmination.
Further seismic data is required to better define the structural
configuration and location of any new well. The Company is
currently assessing options for acquiring 2D seismic in the
area.
Mercury
The Directors continue to have discussions with possible farm in
partners for this prospect. However, with five unsuccessful
offshore wells drilled in New Zealand in the past 10 months,
including some with major cost overruns, the atmosphere for farming
out offshore Taranaki is particularly difficult.
Production
Puka-1 and Puka-2 have continued to produce about 110 bopd.
Present indications are that an increased stroke rate to increase
production out of these wells is not recommended as this could risk
prematurely coning water into the wells.
Ian Gowrie-Smith, Chairman of Kea, commented:
"With the disappointment of the Puka-3 result behind us it has
been encouraging to receive the support of MEO for an on-going
program, in particular to see if we can de-risk a Tikorangi updip
prospect subject to further analysis and sampling of Douglas-1.
Whilst the vastly larger potential rests in a successful Tikorangi
prospect, the Directors of Kea remain optimistic about the prospect
for further successful wells targeting Mount Messenger sands."
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 Tel: +44 (0)20 7340 9970
David Lees, Executive Director
WH Ireland Limited (Nomad) 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 exploration 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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