Kea commences drilling Taranaki well
AUCKLAND -- Kea announced the commencement of drilling of its Douglas-1 well on permit PEP 51153 within New Zealand' s onshore Taranaki Basin. The Douglas prospect is mapped as a Tikorangi Limestone target at a depth of 9,843 feet (3,000 meters), which Kea expects to reach in four weeks.
Oil has been produced at prolific rates from the Tikorangi Limestone reservoir in the adjacent Waihapa field, which abuts the Douglas trap at Tikorangi level.
Kea recently completed a key seismic line over the Douglas prospect which upgraded Kea' s mapping of this high-upside prospect, which, in the event of a commercial discovery, could be brought into production without delay utilizing equipment already on site.
Whilst the company' s intention was to farm out Douglas, it has proved impossible to conclude this in a timely fashion, given the advancement of the drilling date by several months and the very recent incorporation of the new seismic data.
UPDATE ON OTHER DRILLING PROGRAMS
On April 10, 2012 Kea announced that Puka-1 struck oil having intersected a 131 feet (40 meter) interval which includes between 14.8 and 29.5 feet (4.5 meter and 9 meter) of Mt. Messenger sands. Independent petrophysical analyses of electric logs indicate moveable hydrocarbons in good reservoir quality sands.
Both the depth at which these sands were encountered, and their extent, are in line with pre drill expectations, and Kea has not altered its original estimate of gross recoverable resource of one million barrels with a potential upside of up to three million barrels.
The well has been cased and suspended pending flow testing and, if warranted, long term production.
Kea intends to flow test this well as soon as equipment and personnel are available. Due to testing activities of recent discoveries nearby by New Zealand Energy Corp and TAG Oil in similar Mt. Messenger sands, demand for testing equipment and personnel in the area are presently very stretched.
The drilling timetable for Mauku remains challenging due to extreme weather conditions, the approach of winter, public and Maori consultations and other consents. These factors are delaying access and site construction.
The Puka discovery also alters the priority of when to drill Mauku as the Puka discovery has the potential to generate early cash-flow. Consequently, resources, both human and financial, are expected to be redirected to testing appraisal wells and a production program, if warranted.
As a result of the delay, Mauku is now expected to be drilled in the first quarter of 2013. The delay has, however facilitated a change of use in the NRG rig contract so that it has been able to move directly to drill Douglas-1 where the site was already prepared.