Update released on exploration

 KINA Petroleum Ltd (KPL) has provided an update on its progress of the Raintree-1 exploration well in PPL (petroleum prospecting license) 337 near Madang.

Managing director Richard Schroder said: “Raintree 1 is the first of a 2-well programme in PPL 337. Neither well would have been drilled had we not been able to address the very high drilling costs being experienced elsewhere by other operators in PNG.

“Raintree 1 is the first well drilled by EDA (Energy Drilling Australia) in PNG and drilling operations have proceeded seamlessly to date. The EDA Rig 2 has performed well, meeting expectations and encouraging us in respect of forward drilling activity elsewhere in our portfolio.   Kina believes this type of rig has the potential to have a major downward shift on drilling costs and will hopefully improve the economics for testing a number of other exploration targets within Kina’s prospect portfolio that could deliver the next breakthrough in PNG.”

The Raintree-1 is operated by Heritage Oil Ltd under a farm-out agreement between Heritage and KPL, whereby Heritage would carry KPL through the drilling and, if appropriate, testing of the Raintree-1 and Kwila-1 wells. 

Should results of either well require appraisal with additional seismic data Kina is carried through the cost of the programme to a cap of US$8 million (K21m).

KPL will retain a 30 per cent participating interest in the Licence upon completion of drilling, and in the event of a discovery will benefit from a carry through a seismic programme to appraise the field or fields.