Kea Petroleum (AIM:KEA) is pleased to announce that additional flow test and down hole pressure gauge data have confirmed that the oil and gas reservoir accessed during the initial test of Puka 1 is of commercial quantity. The initial build-up data established by downhole pressure gauges have confirmed that no confining boundaries have been observed. The Maximum flow rate of oil achieved was 310 barrels of oil per day (BOPD) and of gas was 1.8 million cubic feet per day (MMCFD).
The testing program is continuing with choke sizes being varied to determine the optimum production parameters for future field performance.
Drilling of Puka 2 to commence as soon as possible.
Following the encouraging test results from Puka 1, the Company has decided to proceed to drill a follow up well, Puka 2, as soon as possible. Planning for Puka 2 is well advanced.
Puka 1 was drilled with a small rig and primarily designed as a low cost slim hole exploration well and is not ideal for production, as it limits production rates, completion and production options. Puka 2 will be drilled by a larger capacity rig and has been designed as a conventional larger diameter production wellbore that will allow for higher flow rates and flexibility with completion and production.
The Wingrove production facilities will now be moved to the Puka site with installation work being undertaken during the drilling of Puka 2. This approach will allow testing to commence at Puka 2 immediately following drilling and for production to commence at Puka 1 without any delay following the completion of the main build-up phase of the current test.
Planning is also advanced for a Puka 3D seismic survey with long lead items purchased so that the survey can be acquired over the upcoming New Zealand summer. This will assist management to locate future drilling targets.
Ian Gowrie-Smith, Kea's Chairman, commented:
'We are delighted that the latest oil and gas flow and down hole pressures data have led to the conclusion that the Puka discovery is indeed a commercial oil field discovery. The commitment to drill Puka 2 and the move of Wingrove production facilities to the Puka production site emphasises our intent to convert this discovery into a cash flow as soon as possible"
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