The share price of New Zealand-focused explorer Kea Petroleum spike dramatically after it announced the spudding of its third onshore well.
Shares rose 20.27% in early trading after the firm said the third well on its Puka field on New Zealand’s North Island was the “major component” of its first phase drill activity on the Taraniki basin with farm out partner, Australian listed MEO New Zealand.
The Puka-3, located in the same well pad as the already producing Puka-1 and -2, is targeting Mount Messenger formation sands at about 1,580m true vertical depth.
The sandstone has been interpreted from a recent 50 square km 3D seismic survey carried out in the south western part of the PEP 51153 licence.
The drill follows from a farm-out agreement with Australia-listed MEO over the block from April this year.
The transaction earned MEO a 30% interest in the permit in return for $3.58million, constituting 80% of costs for the first phase of work – including the Puka-3 development.
Based on phase 1 results, MEO can earn an additional 20% participating interest in the block by funding $6.5mln of the second phase of work, set to develop a new surface point from which the central portion of the field can be accessed.
The company is looking to reach full field development in 2016.
“We have eagerly been awaiting the drilling of the Puka 3 appraisal well,” said Ian Gowrie-Smith, chairman of Kea Petroleum.
“The results will help us to gain a better understanding of the resource size and deliverability, to enable us to plan for further commercial development.”
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