New Zealand Energy Production and Operational Update
February 04 2014 - 6:30AM
Marketwired Canada
Editors note: There is a photo associated with this release.
New Zealand Energy Corp. (TSX VENTURE:NZ)(OTCQX:NZERF) is currently producing
light, high-quality oil from nine wells in the Taranaki Basin of New Zealand's
North Island, with five further wells expected to add to production over the
next four months. NZEC's Waitapu-2 well on its 100%-owned Eltham Permit and the
Waihapa-1B well on NZEC's 50%-owned TWN Licenses are expected to recommence
production in Q1-2014. A high-volume electric submersible pump ("ESP") is
scheduled to be installed on Toko-2B in Q1-2014 in order to realize a further
increase to production in April, followed by additional production from the
Waihapa-2 and Waihapa-8 wells later in Q2-2014.
Production Highlights
-- Total corporate production (net to NZEC)
-- February 2014 first three days average: 284 barrels per day
("bbl/d") oil
-- January 2014 average: 202 bbl/d oil
-- December 2013 average: 236 bbl/d oil
-- Commenced delivery of Copper Moki natural gas to the Waihapa Production
Station in early January
-- All gas required for compressor fuel at the Waihapa Production
Station and for gas lift of the TWN JA reactivated wells is
currently provided from corporate production (TWN JA purchased
external lift gas in Dec 2013), resulting in savings of approx
NZ$100,000 net to NZEC in January (Company estimate)
-- Third-party revenue at the Waihapa Production Station during January of
approx NZ$155,000 (net to NZEC)
Upcoming Catalysts
-- Additional production opportunities identified
-- Waitapu-2 well expected to resume production in Q1-2014
-- Waihapa-1B: Testing the production potential of the Tikorangi
Formation. If successful, the well should recommence production in
Q1-2014
-- Toko-2B ESP installation targeted for Q1-2014, with a production
increase anticipated in April 2014
-- Waihapa-2: Existing Tikorangi well successfully recompleted uphole
to access bypassed Mt. Messenger production. Well shut-in for
installation of artificial lift, production expected in Q2-2014
-- Waihapa-8: Mt. Messenger Formation production potential confirmed by
short flow test. Well shut-in for installation of artificial lift,
production anticipated in Q2-2014
Production fluctuations are the result of ongoing work at the TWN Joint
Arrangement ("TWN JA") reactivated wells to optimize oil production. Two TWN JA
wells were shut-in at the end of December for optimization activities and
resumed production in the second week of January. Likewise, NZEC's Copper Moki-3
well remained shut-in for the first half of January, resuming production on
January 17.
During January, NZEC commenced delivery of Copper Moki natural gas to the
Waihapa Production Station. As a result, the Company is currently able to
internally generate all of the natural gas required to lift the TWN JA
reactivated wells and run the Waihapa Production Station compressors,
significantly reducing operating costs at the Waihapa Production Station and
bringing modest natural gas revenue to the Company.
"NZEC continues to focus on near-term, low-cost opportunities to increase
production and cash flow," said John Proust, Chief Executive Officer and
Director of NZEC. "During a strategic planning session held in mid-January, NZEC
directors and management agreed on two key things: the Company needs to increase
production, and reduce costs. We are focused on delivering these two objectives.
Further, a review of the cash flow projections concluded that the shift in
closing the acquisition of the TWN assets from August to October 2013, and the
resulting delay to commencement of production, will result in lower cumulative
cash flow for 2014 than originally announced. NZEC will provide updated cash
flow guidance as its 2014 development program unfolds.
"The better we understand the TWN assets, the more opportunities we see that
could further enhance production with minimal cost. Likewise, we continue to
optimize production from existing wells, as evidenced by the production increase
in the early part of February. The timing and sequence of each development
activity may change as we continue to optimize production and enhance our
understanding of the oil fields' potential. NZEC's operations team reviews
planned activities daily to ensure resources are deployed on activities that
will most quickly add to production, in a sequence that ensures the most
effective use of support services. NZEC will continue to provide monthly updates
so that shareholders can track the Company's progress as we incrementally add to
production and cash flow with each development activity."
Table 1 - NZEC's Production & Development Wells
Well Name Permit Target Notes
Name Formation
Copper Moki-1 Eltham Mt. M Producing since Dec 2011
Copper Moki-2 Eltham Mt. M Producing since Apr 2012
Copper Moki-3 Eltham Mt. M Producing since Jul 2012
Waitapu-2 Eltham Mt. M Produced Dec 2012 - May 2013
Expected to recommence in Q1-
2014
Reactivated Tikorangi TWN Tikorangi Existing wells drilled by
Wells previous operator
Toko-2B, Ngaere-3, Oil production reactivated in
Ngaere-2A, Ngaere-1, Nov 2013
Waihapa-H1, Waihapa-6A Installation of high-volume
lift on Toko-2B targeted for
Q1-2014
Potential Tikorangi Well TWN Tikorangi Tikorangi flow test scheduled
Waihapa-1B for Feb 2014
Production targeted for Q1-
2014
Additional upside from Mt. M
formation
Uphole Recompletions TWN Mt. M Waihapa-2 production targeted
Waihapa-2 for Q2-2014
Waihapa-1B Waihapa-1B Mt. M recompletion
contingent on results of
Tikorangi production test
Reactivated Mt. M Well TWN Mt. M Production targeted for Q2-
Waihapa-8 2014
On behalf of the Board of Directors
John Proust, Chief Executive Officer & Director
About New Zealand Energy Corp.
NZEC is an oil and natural gas company engaged in the production, development
and exploration of petroleum and natural gas assets in New Zealand. NZEC's
property portfolio collectively covers approximately 1.97 million acres of
conventional and unconventional prospects in the Taranaki Basin and East Coast
Basin of New Zealand's North Island. The Company's management team has extensive
experience exploring and developing oil and natural gas fields in New Zealand
and Canada, and takes a multi-disciplinary approach to value creation with a
track record of successful discoveries. NZEC plans to add shareholder value by
executing a technically disciplined exploration and development program focused
on the onshore and offshore oil and natural gas resources in the politically and
fiscally stable country of New Zealand. NZEC is listed on the TSX Venture
Exchange under the symbol NZ and on the OTCQX International under the symbol
NZERF. More information is available at www.newzealandenergy.com or by emailing
info@newzealandenergy.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
This document contains certain forward-looking information and forward-looking
statements within the meaning of applicable securities legislation (collectively
"forward-looking statements"). The use of the word "will", "anticipated",
"expected", "scheduled", "may", "should", "could", "continue", "enhance",
"optimize" and similar expressions are intended to identify forward-looking
statements. These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ materially from
those anticipated in such forward-looking statements including, without
limitation, the speculative nature of exploration, appraisal and development of
oil and natural gas properties; uncertainties associated with estimating oil and
natural gas reserves and resources; uncertainties in both daily and long-term
production rates and resulting cash flow; volatility in market prices for oil
and natural gas; changes in the cost of operations, including costs of
extracting and delivering oil and natural gas to market, that affect potential
profitability of oil and natural gas exploration and production; the need to
obtain various approvals before exploring and producing oil and natural gas
resources; exploration hazards and risks inherent in oil and natural gas
exploration; operating hazards and risks inherent in oil and natural gas
operations; the Company's ability to generate sufficient cash flow from
production to fund future development activities; market conditions that prevent
the Company from raising the funds necessary for exploration and development on
acceptable terms or at all; global financial market events that cause
significant volatility in commodity prices; unexpected costs or liabilities for
environmental matters; competition for, among other things, capital,
acquisitions of resources, skilled personnel, and access to equipment and
services required for exploration, development and production; changes in
exchange rates, laws of New Zealand or laws of Canada affecting foreign trade,
taxation and investment; failure to realize the anticipated benefits of
acquisitions; and other factors as disclosed in documents released by NZEC as
part of its continuous disclosure obligations. Such forward-looking statements
should not be unduly relied upon. The Company believes the expectations
reflected in those forward-looking statements are reasonable, but no assurance
can be given that these expectations will prove to be correct. Actual results
could differ materially from those anticipated in these forward-looking
statements. The forward-looking statements contained in the document are
expressly qualified by this cautionary statement. These statements speak only as
of the date of this document and the Company does not undertake to update any
forward-looking statements that are contained in this document, except in
accordance with applicable securities laws.
To view the photo associated with this release, please visit the following link:
http://www.marketwire.com/library/20140204-NZEC-lg.jpg
FOR FURTHER INFORMATION PLEASE CONTACT:
New Zealand Energy Corp.
John Proust
Chief Executive Officer & Director
North American toll-free: 1-855-630-8997
New Zealand Energy Corp.
Bruce McIntyre
Acting General Manager Exploration & Director
North American toll-free: 1-855-630-8997
New Zealand Energy Corp.
Rhylin Bailie
Vice President Communications & Investor Relations
North American toll-free: 1-855-630-8997
info@newzealandenergy.com
www.newzealandenergy.com
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