Junior explorer Kea Petroleum said Monday that the newly-mapped Shannon structure, located directly under the Puka field in the Taranaki Basin, New Zealand, is "too exciting and too prospective" not to drill.
Reporting the company's 2013/2014 financial results, Kea Chairman Ian Gowrie-Smith noted that the firm had recently been through a "challenging period" but added he and the board remain confident of an exciting year ahead.
"As to the future, we can't afford not to drill the new Shannon structure: it's too exciting and too prospective, and [MEO New Zealand Limited] and ourselves are finalising drill target and funding discussions. It's worth shareholders supporting because success here would lead to a whole new and different chapter for the company," Gowrie-Smith said.
Kea has had recent disappointing results from drilling on its Puka field, where oil-water contract was some 98 feet higher than expected – meaning that total potential reserves in the field are likely to be significantly reduced. However, as a result of drilling on Puka, and 2D and 3D seismic data acquisition, Kea and partner MEO have become excited about the prospect of a newly-mapped structure called Shannon.
Kea said that the Shannon structure is not a sand reservoir like Mt Messenger – which Taranki Basin players are currently trying make commercial sense out of – but is composed of limestone and is the same as in the Waihapa oilfield immediately west of Puka. The Waihapa oilfield has produced 23.6 million barrels of oil to date.
Kea's revenue increased to $3.34 million during the 12 months to May 31, from $1.33 million in 2012/2013. The company said the increase was largely a result of hydrocarbon sales associated with production from its Puka 1 and Puka 2 fields. The firm also showed progress with its costs, reporting a net loss of $7.78 million for the year compared to $13.46 million in 2012/2013.
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