Kea Petroleum initiates 5.0m placing to raise money for drilling

New Zealand-focused oil and gas company Kea Petroleum has initiated a placing to raise money to partly fund the construction of new production facilities and drilling of the Angus prospect.

The AIM-listed company reported a placing of up to 35.7m units at 14p per unit, to raise up to £5.0m. It said that it had received unconditional commitments to subscribe for 21.4m units, representing a committed investment of £3.0m.

The company revealed that recent successful flow testing of Puka 2 and the imminent restart of Puka 1 required the construction of new production facilities and said that the funding would be applied partly towards their completion.

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It added that there was a requirement to drill a further well in PEP 51155 prior to the end of September 2013 as part of a committed exploration work program for the permit.

Following interpretation of existing 3D data recently made available to Kea, it said that another Mt Messenger prospect similar to Puka had been identified on PEP 51155. The funds being raised would be able to assist in financing the drilling of this prospect, known as Angus, prior to the required date, the company added.

Additionally, it said that it also intended to drill up to three further Puka wells from the existing surface location during the balance of 2013 depending on revenues from oil production.

Ian Gowrie-Smith, Chairman of Kea Petroleum, commented: "We are pleased that investors continue to support the company in maintaining its momentum to exploit the Puka discovery, as well as enabling the company to carry out it permit obligations. The majority of the commitment costs are fortunately now behind us."

Kea Petroleum's share price was down 3.53% to 6.15p at 14:03 on Thursday.

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