Kea Petroleum reported Tuesday that a staged farm out of its interest in the PEP 51153 license, which includes the Puka discovery, is expected to be completed during the first quarter of 2014 after due diligence is finished.

An agreement signed by Kea envisages a staged farm-out whereby Kea will be funded through an appraisal of Puka with one firm well and up to three further wells, fully funded by Kea's partner, the firm said. Kea added that as a result of the current extended well testing phase on Puka, a total of 13,791 barrels of oil was sold during the fourth quarter of 2013, generating $1.2 million of revenue. During January, a further 2,532 barrels were produced.

However, Kea said that Puka 2 production has been significantly reduced due to a mechanical failure of a down-hole pump. Continued pressure buildup during the shut-in period confirmed the productive capacity of Puka 2, with planning underway to make necessary repairs to the down-hole equipment. Repairs are expected to be completed and production re-started during March.