LONDON (Alliance News) - Kea Petroleum PLC shares fell in early trade on Friday after the company said it would relinquish its Mercury permit in New Zealand.
Kea said it has presented the prospect to a number of potential farm-in partners but, due to the challenging market conditions arising from the fall in the oil price in recent months and a lack of success for exploration projects offshore New Zealand, Kea said it was not able to reach a satisfactory agreement to commit to drilling an offshore well at the site.
As a result, it has surrendered the permit to New Zealand Petroleum and Minerals, the government-backed oil and gas body, and will stop any further spending on the prospect.
Kea also said its strategic review is ongoing and said a number of potential funding partners have reviewed the data for the Shannon and Mauku prospects in New Zealand.
"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," said Kea Chairman Ian Gowrie-Smith.
Kea shares were down 10% to 0.788 pence on Friday, one of the worst performers in the AIM All-Share.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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