KINA Petroleum will not carry out further exploration work on PPL 337 after completing a review of remaining prospectivity at the project area.

In the company’s December quarter report, Kina said there was a lack of evidence for an active conventional petroleum system in PPL 337, based on data from the Raintree 1 and Kwila 1 wells.

Raintree 1 had turned out to be dry when drilled in June 2015, while Kina had failed to find moveable gas at the Kwila 1 well drilled later that year.

While the wells had confirmed an unconventional biogenic gas system within the licence area, the high level of risk associated with the system, as well as poor reservoir quality, meant Kina could not justify committing further capital to the Banam prospect, the company said.

“Kina does not believe further exploration work on this licence can be justified in the prevailing oil price environment,” it said.

Also being assessed for future work is PPL 340, located in several blocks north of Port Moresby in the eastern Papua basin, with Kina saying it would only carry out additional work in the licence if it was sure of a commercially viable target which it could farm out to a third party.

Kina said it was encouraged by early signs from reprocessed seismic data over its wholly owned PPL 435 and PPL 436 in Western province, saying it would carry out interpretation of the seismic data in the March quarter.

On PPL 437, the Malisa prospect “will certainly justify a well once the oil price improves and a commitment is made on final investment decision for a development of the Elevala/Ketu fields,” Kina said.