Kea Preps for Upcoming NZ Drilling Program

Kea Petroleum plans to begin drilling its first well, Wingrove-2, in early April to be followed immediately by Kea's deep gas Beluga-1 well.

Both wells are in onshore Taranaki with the Wingrove-2 appraisal well in PEP 51153 targeting shallow oil prospects. Drilling at Wingrove is expected to take 15 days.

Kea Petroleum is a New Zealand-focussed exploration company with three wholly-owned exploration permits in the onshore Taranaki and Northland Basins.

Kea's chief executive officer is prominent Wellington petroleum explorer Dr Dave Bennett. Kea is listed on the London Stock Exchange Alternative Investment Market (AIM) where in February the company raised an additional NZ$13 million.

Kea said in a statement that Ensign Rig 19 would drill both the Wingrove and Beluga wells.

Wingrove-2 will be a deviated well, designed to test the updip potential of the good oil shows seen in the basal Mount Messenger (Mako Sands), and the oil pay encountered in shallower sands in the previously drilled Wingrove-1, which flow-tested waxy oil at a rate of 50 bopd.

Beluga-1 will drill a large, untested gas play in PEP 51155, which onlaps the eastern flank of the McKee oilfield. Kea's best estimate of Beluga's prospective resources are 446 billion cubic feet with condensate yield of about 27 million barrels.

The primary target for the Beluga well is Tariki sands with secondary targets in shallower Mt Messenger sands and Tikorangi Limestone.

Methanol producer Methanex New Zealand is to wholly fund the Beluga-1 drilling which Kea said would cost some £5.7 million (approximately $NZ12.6 million).

The Kea Petroleum prospectus says that under the gas off-take agreement with Methanex, the gas price will be tied to international methanol prices, with a floor price of US $1.20 per GJ at a methanol price of US $200 per tonne. The gas price will increase US $1 per GJ for every rise of US $100 per tonne in methanol prices, with a cap of US $4.50 per GJ.

Kea said in a recent statement that it had received approval from the Ministry of Economic Development in relation to its funding & participation agreement and gas offtake agreement with Methanex New Zealand.

Kea also said it began a 75 km seismic survey in permits PEP 51153 (Beluga) and 51155 (Wingrove) to provide additional seismic data on several prospects already identified in both permits, with a view to providing additional drilling targets.