Just looks like an incredibly cheap entry into a likely producer...

Just looks like an incredibly cheap entry into a likely producer within 6 months. Not many of those at $10m

Kea Petroleum (LON:KEA) , the New Zealand based oil and gas exploration group, this morning reported that its Wingrove-2 well in the onshore Taranaki Basin had reached its target depth of 1630m and intersected oil.

Preparation is now being made to run casing as the first step in completing the well as a potential oil producer. The rig will complete Wingrove-2 operations in the next few days and will then be moved to the Beluga-1 well site.

A net total of approximately six metres of oil-bearing sandstones has apparently been identified over the interval from 1100 to 1300 metres depth along hole, from analysis of electric log, rock cuttings and mud log data.

In addition, very high levels of hydrocarbon gasses, indicative of the presence of oil, are observed below 1450m.
Kea is now set to buy up all the necessary surface and down-hole equipment for long term production and sale of oil. It is anticipated that production testing will begin within the next six months.

Keas chairman, Ian Gowrie-Smith, said: We are very pleased to have encountered oil in Wingrove-2, and with a deeper oil production 'upside' which will be tested at the time of completion of this well as a producer. In a very short time we have gone from an exploration company to one expecting to be in production within the next six months and we still have the rest of our drilling and exploration programme in front of us.