Kea Petroleum exit from NZ a step closer

Shareholders in cash-strapped London-listed oil and gas explorer, Kea Petroleum [AIM: KEA], have voted to approve the disposal of the company's interests in Taranaki exploration and production licences and a recapitalisation plan that will leave a shell vehicle available to pursue investments anywhere its directors can find them.

A general meeting of shareholders approved various resolutions that the company hopes will at least allow Kea shares to be released from a trading halt imposed by the AIM exchange, the small cap London-based platform where Kea is listed, that has been in place since May 26, pending clarification of the company's financial position.

Key to the resolutions were approval to sell two petroleum licence assets for a total of $1 million to two other small-scale New Zealand petro-chemical investors, despite a valuation in Kea's books at May 31 of around $23 million for its interest in Petroleum Exploration Licence 51153, covering the Puka wells drilled by Kea and its Shannon prospect. Kea holds a 70% interest in that licence, which it intends selling to Caliera Fund Ltd, a private New Zealand company, for $500,000.

It intends to realise another $500,000 from the sale of its 100% interest in PEP381204, covering the prospective Mauku formation to New Endeavour Resources, another small-fry New Zealand player that says it specialises in extracting reserves "in areas where complex geology hinders formation evaluation."

While tiny in both domestic and global terms, Kea was bullish on its prospects before the slump in oil prices and, like many small, marginal players, has been unable to attract further investment capital. The latest initiative came after an unsuccessful attempt to raise £3 million earlier this year, meaning it could not pursue drilling plans for Puka.

A circular to shareholders on June 26 said the cashed-up shell would become an "investing company" under AIM rules, and would in future look for investments in any sector in any part of the world, including in the "technology, life sciences, property, leisure, and hospitality" industries.

The capital restructuring reduced the part value of Kea shares to 0.1p a share from 1p, with every existing share being divided into one new ordinary share of 0.1p and one deferred share of 0.9 pence.

(BusinessDesk)