New Zealand-focused junior explorer Kea Petroleum announced Monday that it has agreed a farm-out deal with MEO Australia concerning its PEP 51153 license, which includes the Puka discovery.
The PEP 51153 permit covers an area of 40 square miles and is situation onshore along the eastern margin of the Taranaki Basin.
In phase one of a $12-million work program, MEO has committed $3.5 million to earn a 30-percent interest. Phase one will include: the work over of both existing Puka wells to boost production; the drilling of a new well to test a potential reservoir sweet spot and further boost production; and the testing of the suspended Douglas 1 well to determine the fluid content of Tikorangi Limestone and the northern extent of the Puka field.
In phase two, MEO can elect to take a further 20-percent interest for a further commitment $6.5 million. This phase will include: the construction of a new central drilling and production facility; the drilling of appraisal wells to evaluate the central portion of the field; and enhanced field production through the application of horizontal drilling and production technologies.
Kea Chairman Ian Gowrie-Smith commented in a company statement:
"Kea's future success was dependent upon attracting a quality farm-in partner to assist in the development of Puka. We are delighted with the introduction of MEO into PEP 51153 and the farm-out arrangements which provide for a substantial carry for Kea.
"The agreed work program is designed to boost near-term oil production, verify the Puka 2P resource, and accelerate the commercialization of the oil potential identified within the permit. MEO's entry into onshore New Zealand is very welcome, bringing valuable additional technical and commercial expertise at a critical time for the development of Puka. MEO's technical team has extensive expertise in major oil companies with geologically similar turbidite fields. MEO's staff also have significant international development and commercial expertise that complements Kea's technical strengths and local operational expertise."
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