Kea Petroleum surrenders Tasman Sea prospect

Kea Petroleum has given up its rights over an exploration permit offshore New Zealand after failing to attract potential partners due to the low oil price environment.

The company, which is conducting a strategic review and looking at a potential sale of the company, said it was going to focus on lower-cost onshore projects.

Kea said it had presented the Mercury prospect in the Tasman Sea to several potential farm-in partners, but it had "not been possible to reach a satisfactory agreement" to commit to drilling an offshore well before September 2015.

Chairman Ian Gowrie-Smith said: "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."

He added that the strategic review process conducted by Rockpoint Corporate Finance was at an early stage and "we will provide further updates in due course".