Payment to creditors of Kea Petroleum 'highly unlikely': liquidator

Monday 2nd May 2016

A payment to any creditors of the Kea Petroleum group of companies "seems highly unlikely", and depends on the sale of Kea's Mauku-1 exploration permit, says the Deloitte liquidator for the onshore Taranaki oil and gas explorer, which had a London Stock Exchange listing.

In his first six-monthly report since the company chose liquidation over a court battle with its primary potential creditor last November, liquidator David Vance warned the sale of Mauku-1, otherwise known as Petroleum Exploration Permit 381204, "needs to make substantial progress in the next few weeks otherwise, in conjunction with (the regulator) New Zealand Petroleum and Minerals, the permit may have to be surrendered."

One party has expressed interest in Mauku-1 and is attempting to bring one or two other parties into the permit. PEP381204 is in its second five-year period of issue, and Kea has owned it 100 percent since 2010 when it took the permit over from Genesis Energy. It had sought farm-in partners without success, despite the Mauku-1 exploration well drilled in May 2013 intersecting with reportedly "good quality Mangahewa 'C' sands in the footwall of the Taranaki Fault", in an area "which is a prolific producing reservoir in the Taranaki Basin", some 60 kilometres southwest of the producing Pohokura oil and gas field.

The liquidator had found some specialist line hanger equipment belonging to Kea in a rented warehouse. In the absence of buyers, it was sent for scrap, with funds realised paying rent and scrapping costs. No other assets had been discovered and the only contingent creditor claim lay with the former contractor to the company over an alleged breach of contract.

It was that dispute which saw Kea opt for liquidation rather than face court costs, as plunging oil prices have snuffed out prospects for numerous small-scale oil and gas explorers globally.

BusinessDesk.co.nz

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