Kea Petroleum (LON:KEA) , the AIM quoted oil and gas exploration group with licences in New Zealand and Australia, has finished moving production equipment to the site of its Wingrove oil discovery in New Zealand’s onshore Taranaki Basin. Production testing will now be carried out on several oil bearing Mount Messenger Sand intervals which were encountered in the Wingrove-2 well in the depth range 1150-1300m. Wingrove-2 was Kea’s first discovery well when it was drilled in April 2010 but plans to bring the well into production by February this year were scuppered by problems with equipment availability. Further appraisal drilling on the Wingrove prospect is dependent on the results of the forthcoming production test work. The Kea Petroleum share priced edged up by 2.25p to 13p on today’s news.
Specialised heating equipment will now be run downhole, and a hydraulic rod pumping system will be installed at the surface, to optimise flow of the waxy oil expected to be produced from the oil sands. Onsite storage tanks and offloading equipment will enable road transport of the crude to the nearby oil export port of New Plymouth. These operations, which will take 15-20 days to complete, are being carried out using the Titan workover rig recently purchased by Kea and Webster Drilling, a New Zealand drilling company. Assuming that sustained and commercial oil flow is possible from the drill site, Kea expects to be drilling several more wells to appraise and develop the Wingrove structure, which extends over an area in excess of 10 sq km, and has a potential resource of several million barrels. The Titan rig will enable the cost-effective development of this resource, as well as being available to drill other similar targets identified by Kea on its licences.
Kea’s chairman, Ian Gowrie-Smith said: “Kea has identified some 20 potential Mount Messenger sands prospects on its licence areas so any reasonable result from Wingrove-2 has the potential of being replicated across the whole Wingrove structure. Part of the reason for the delays we have incurred is that we have prepared the Wingrove site for potentially as many as five further deviated holes. Even a very modest flow could prove economic at current prices for oil.”
Kea raised £6m in a share placing priced at 8p per share when it listed on AIM in February 2010. Shortly afterwards…
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