Kina secures cornerstone areas

KINA Petroleum has won a key licence extension and retained its prospects and leads in the relinquished areas of PPL 338, a key step in its exploration strategy of shooting low cost seismic and using the results to attract drilling partners.

  • Staff Reporter
  • 19 May 2017
  • 08:48
  • News
Kina secures cornerstone areas

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PPLs 596, 597 and 598 have been issued over key parts of PPL 338, while PPL 340 has also been extended for a further five years. 
PPL 228 ended its term in September 2015, and Kina had to relinquish 50% of what it had always considered a cornerstone area.
To keep its foot on the area, Kina applied for four new blocks over the relinquished area, and the first, PPL 581, was awarded in February, just weeks after the remaining area of PPL 338 was renewed. 
The balance of the blocks have now been granted for six more years, commencing March 31. 
PPL 596 contains five graticular blocks, while PPLs 597 and 598 each contain three graticular blocks.
The effect of the new licences extends the company's licences beyond the original PPL 338 licence, and embraces the area around PRL 15, where Total, Oil Search and ExxonMobil have the six trillion cubic feet plus Elk-Antelope field that it is envisaged will support the Papua LNG project.
Contained within the PPL 597 licence area is the Puri South field, PPL 598 in the north is immediately adjacent to the Triceratops discovery, while PPL 596 in the south is immediately adjacent to Kina's Mangrove and Nipa prospects within the retained PPL 338.
The work programs to be carried out PPLs 581, 596, 597 and 598 are effectively identical, and are designed to be conducted as a unified whole across all four blocks, starting with gravity in the first two years, seismic in years three and four, and a well in the final two years.
Kina wants to complete the geophysical work, and tie the results in to the Uramu-1 and Mira-1 gas discoveries in neighbouring licences to the south-west, and potentially enter a data swap deal with Total. 
PPL 340 also expired in 2015, and the renewed area is half the size, around 26 graticular blocks.
Kira believes the Lizard, Lizard East and Port Moresby leads, which are less than 25km from the PNG LNG infrastructure, can be matured to drillable status using a similar work program to its other blocks. 
The company says the area outside Port Moresby contains early to mid-Miocene reefs that are likely to be sealed by overstepping shales.
There is evidence of nearby gas flows on the Lakekamu embayment, where a source kitchen is believed responsible for the success of the Tovala 1 and 1A wells, which are down-dip of Lizard.
Kina managing director Richard Schroder said the company had consolidated its position in the forelands and southern Papuan Basin, a region whose prospectivity had been confirmed by the Elk-Antelope discoveries.
"PPLs 596, 597 and 598 allow Kina to take maximum advantage of the prospectivity surrounding its PPL 338 licence area, while the work program we are planning for PPL 340 has the potential to extend the Elk-Antelope play fairway south east to Port Moresby, which brings both export infrastructure and the country's domestic energy market well within range when considering future commercialisation options," he said.
He hopes the company's prospect and lead inventory, which contains several large structures, can play a role in the expansion of PNG's LNG sector. 
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