TIDMKEA

RNS Number : 3348H

Kea Petroleum PLC

13 March 2015

 
   13 March 2015

Kea Petroleum plc

("Kea" or "the Company")

Mercury Permit and Strategic Review Update

Kea Petroleum plc (AIM: KEA), the oil and gas company focused on New Zealand, announces the relinquishment of its Mercury permit, PEP 52333, offshore Taranaki, and an update on the ongoing strategic review.

Mercury permit

This permit was awarded to Kea on 13 October 2010. The permit covers an area of 232.5 km(2), mainly offshore in the north Taranaki area.

As part of an agreed work program Kea acquired about 119 km(2) of 3D seismic data and, following interpretation of the data, identified a 16 km(2) 3-way dip and fault closed prospect with original resource potential estimated by management to contain 108 - 688 (P(90) - P(10) ) million barrels of oil in place.

Kea has presented the prospect to a number of potential farm-in partners; however, given the present challenging environment resulting from the fall in the oil price and lack of success in recent offshore exploration in New Zealand, it has not been possible to reach a satisfactory agreement to commit to drilling an offshore well before September 2015.

Therefore the Board has decided to surrender the permit to New Zealand Petroleum and Minerals and to stop any further expenditure on the prospect.

Strategic Review

Following Kea's announcement on 16 February 2015 (the "Announcement"), the strategic review continues under the advice of Rockpoint Corporate Finance Limited ("Rockpoint") and, within the context of the "formal sale process" (as described in the Announcement and in accordance with note 2 on rule 2.6 of the City Code on Takeovers and Mergers (the "Code")), a number of potential funding partners have reviewed the technical data on the Shannon and Mauku prospects.

Ian Gowrie-Smith, Chairman of Kea Petroleum, commented:

"We are disappointed that we have been unable to conclude a farm-out of the Mercury prospect but it is prudent to surrender the permit. Our limited resources must be focussed on our lower cost onshore permits at Mauku and Puka as we seek to secure funding to enable the drilling of our Shannon prospect. Rockpoint's strategic review process is at an early stage and we will provide further updates in due course."

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.

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on the Company's website at www.keapetroleum.com as soon as possible and in any event no later than 12:00 noon (London time) on 16 March 2015 (being the business day following the date of this announcement). The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

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 
  James Bavister 
 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 two 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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