PRL 21 (KPL interest 16.75%)
Over the last 2 years Kina has completed an analysis of seismic, well and engineering data which culminated with a release to the market on 13 June 2018 of a 2C contingent resource estimate for the licence of approximately 48 million barrels of condensate and 1.11 trillion cubic feet of gas.
Kina believes the resource is economic at current energy prices and analysis suggests that a window is opening for delivery of gas as LNG into the Asian market now. In parallel with the technical evaluation of PRL 21, Kina has analysed risk, cost of development and use of the Fly River as a virtual pipeline and monetisation pathway out of Western Province. The Fly River has for some time been used to export gold and copper from Kiunga with downtime, at roughly seven year intervals due to low river levels, managed successfully.
Kina’s analysis suggests that even with the risk of temporary shutdown for low river levels, development via a Fly River port is economically attractive and can be bought on stream within timeframes that would allow participants to take advantage of favourable near term commodity pricing.
Kina has modelled numerous development scenarios with this work showing that the value of the liquids and gas far exceeds the capex required for the project and will deliver significant value. On a gross joint venture basis, the development options modelled yield estimated values ranging from approximately $0.4bn to almost twice that amount.
Importantly, a future development of the Elevala & Ketu fields with first production in the early 2020s will act as not only a hub for development of nearby discoveries but as an incentive to foster further exploration in neighbouring licences such as PPL 437 where Kina and Heritage have a drill-ready opportunity.
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