MEO AUTRALIA aims to raise up to $2.9 million through a share purchase plan in order the fund the first stage of a farm-in to the Puka oilfield, onshore New Zealand.

Existing MEO shareholders will be able to apply for up to $15,000 of new shares, with the issue price to be determined at the conclusion of the share purchase plan period.

That price will be 20 per cent less than the average market price of MEO shares quoted on the Australian Securities Exchange prior to the conclusion of the offer period.

The offer is managed and partially underwritten by Patersons Securities.

The Puka oilfield, on the 104,400 hectare PEP 51153, is wholly owned by Kea Petroleum, with MEO having agreed to earn a 30 percent stake in the field by funding 80% of an exploration program, which includes the drilling of a new well.

That program, which will be worth up to NZ$5 million, is expected to start before June 2014, comprising two workovers designed to restore productive capacity to the existing Puka 1 and Puka 2 wells, as well as testing the suspended Douglas 1 exploration well on the project.

Six months after completion of the program, MEO has the option to earn an additional 20% stake by funding NZ$7.5 million of the NZ$9 million Phase II exploration program.

The Puka oil accumulation is located less than 5 kilometres east of the producing Waihapa oilfield in the Taranaki basin, with MEO predicting peak production of more than 2,000 barrels per day by 2016, all things going well.