Kea Petroleum has sold its 50% shareholding in Petra Drilling, and its associated rights to the Titan workover rig and the VR500 drill rig, to Webster Drilling and Exploration Limited ("Webster"), the other shareholder in Petra. A loan by Kea to Petra to initiate the project to bring to New Zealand a state of the art drilling unit, namely a fully automated VR500 rack and pinion topdrive rig, is to be fully repaid by Petra. In addition, Webster's have also paid Kea the full asset value of the Petra shares, and Petra has repaid the money advanced by Kea last year to enable the purchase of the Titan workover rig.
Chairman Ian Gowrie-Smith commented, "We are pleased to transfer our rights to Webster Drilling, an established drilling company which has the expertise to operate these rigs; and we wish them well in their endeavors in the oil drilling sector. While we have never sought ownership of drill rigs, we are delighted to have played such a key role in bringing modern drilling technology to New Zealand. We are confident this will result in both cheaper and better drilling in New Zealand in the future. Kea maintains a right of first refusal to use the VR500 after it completes its initial contract, and is looking forward to the opportunity to make use of its capabilities in our proposed drilling program. Our cash resources can now again be fully dedicated to our core business of oil and gas exploration"
The agreement between Kea and Webster dated October 14, 2011 (the "Agreement") provides that:
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