Dept approves firm’s request

The National Business

KINA Petroleum Corporation’s (KPC) application to suspend its working obligations for all its operated licences in country has been approved by the Department of Petroleum and Energy (DPE) with all its work commitments now suspended as of September.
It announced on the stock market on Oct 30 that due to lack of activity and the difficulty in travelling to PNG at present, it was looking to minimise forward expenditure to preserve its cash and cut overheads until the investment environment improved.
KPC is a Papua New Guinea-registered company formed in 2009 to participate in the exploration and acquisition of oil and gas assets in the country, its primary base of operation.
The current KPC share price is AU$0.42 (K1.03) well down from the high of AUS$1.26 (K3.09) only 12 months ago.
The fall very much tracks the oil price which collapsed first quarter this year.
Its market capitalisation is AU$5.33 million (K13.07m) well below the value of its asset base but reflects the uncertainty now surrounding development of the asset. KPC has US$2mil (K7.01m) cash at hand.
The company’s summary for the quarter as of July 1 to Sept 30 this year are as follows:

  • PRL (Petroleum Retention Licence) 21 – Joint Venture work was suspended pending advice of the DPE on our Petroleum Development Application.
  • PPLs 338, 581, 596, 597 & 598 – KPC has completed its assessment of Mangrove Snake Cluster (MSC). MSC is located in a low-cost operating environment with finding and development costs in the lowest quartile once the investment climate improved. All non-essential work was suspended for 12 months.
  • PPL 339 – The licence is on care and maintenance with field work suspended.
    Kina received US$1.48mil (K5.19mil) comprising some cash and reimbursement of recent costs as a consequence of its farm out to Santos.
  • PPL 340 – In view of the decision to surrender the licence, all work has ceased on the licence.
  • APPL 663 and 664 – Kina has lodged applications for APPLs 663 and 664 which have been gazetted and we wait for their consideration by the petroleum advisory board and the Minister.
  • PPL 437 – Malisa prospect is ready to drill. An extension for the licence has been submitted to the DPE for consideration.