Kea Petroleum plc, the oil and gas company focused on New Zealand, has announced the relinquishment of its Mercury permit, PEP 52333, offshore Taranaki, New Zealand.
This permit was awarded to Kea on October 13, 2010. The permit covers an area of 232.5 km², mainly offshore in the north Taranaki area.
As part of an agreed work program Kea acquired about 119 km2 of 3D seismic data and, following interpretation of the data, identified a 16 km2 3-way dip and fault closed prospect with original resource potential estimated by management to contain 108 – 688 (P90 – P10) million barrels of oil in place.
According to Kea, it 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, the company explained in the statement.
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.”