Kina Petroleum gas interest shows promise

POLITICALLY, strategically and geologically, things are coming together for Papua New Guinea gas explorer Kina Petroleum, much to the satisfaction of managing director and PNG exploration veteran Richard Schroder.
Having defied an unfolding political crisis to raise A$12.3 million in its initial public offering at A$0.20 a share in December, Kina has prospered despite the risk-averse market and the uncertainty as the lengthy election process works towards a conclusion.
Last week’s shoring-up of Peter O’Neill to continue as prime minister with the backing of bitter rival
Sir Michael Somare promises to bring some welcome stability for resources investors in PNG.
Kina’s prime asset is its 15% stake in the PRL 21 permit in the Western province, hosting the promising Ketu and Elevala wet gas deposits.
A recent upgrade of resources estimated volumes of gas in the permit towards a handy 60 million barrels of condensates, 20 million barrels of gas liquids and 1 trillion cubic feet of gas.
The company has told investors a liquids-stripping project is clearly commercial, although it is yet to be sanctioned.
Design work is due to start this half and production is possible by 2015.
The PRL 21 venture is led by fellow ASX-listed Horizon Energy, and includes the Canadian major Talisman Energy.
Bringing further might is Japanese trading house Mitsubishi, through a US$280 million venture with Talisman in PNG in March.
On the gas side, several pieces of the jigsaw are yet to fall into place, but the signs are promising, particularly with players such as oil giant Royal Dutch Shell in the picture.