New Zealand Energy Corp. ("NZEC" or the "Company") (TSX VENTURE:NZ)(OTCQX:NZERF)
today announced that the Company commenced oil production from two additional
wells during March 2014. Workover activities on the TWN Licenses are on track as
outlined in previous updates, with the expectation that two additional wells
will further add to oil production during April.
"NZEC continues to focus on reducing costs while increasing production and cash
flow," said John Proust, Chief Executive Officer of NZEC. "We expect to report
additional production increases in April, and continue to identify new low-cost
opportunities on the TWN Licenses that could further add to production in the
coming months."
The Company also announced its 2013 year-end reserves, with Proved + Probable
(2P) reserves estimated at 1.2 million barrels of oil ("bbl") (1.6 million
barrels of oil equivalent(1)) with an after tax net present value, discounted at
10%, of $57.9 million.
"NZEC's 2013 reserves estimate underscores the Company's production potential,"
said John Proust, NZEC's Chief Executive Officer and Director. "NZEC's Eltham
Permit and TWN Licenses are estimated to hold 1.6 million boe of 2P reserves net
to NZEC, valued at $57.9 million after the estimated costs to extract the
reserves. In addition, the Company offers additional value through its interest
in the Waihapa Production Station and other infrastructure, plus exploration
upside from significant prospective resources identified on the Company's
property portfolio in both the Taranaki and East Coast basins."
Highlights
Production
-- Average daily production for March (including Waitapu-2 well): 233 bbl/d
net to NZEC
-- Waitapu-2 well: Recommenced Mt. Messenger oil production on March 6 (70
bbl/d net to NZEC)
-- Waihapa-8 well: Reactivated Mt. Messenger oil production on March 29 (55
bbl/d net to NZEC, not included in March average daily production)
-- Workover activities underway to prepare for additional oil production in
April
-- Toko-2B well: Installing high-volume lift (ESP) to increase
Tikorangi oil production
-- Waihapa-2 well: Installing artificial lift to commence Mt. Messenger
oil production
-- April production numbers are expected to include all existing wells plus
all net production from Waihapa-8, Toko-2B (on ESP) and Waihapa-2
Reserves
-- Proved + Probable reserves (2P) increased 145% compared to year-end
2012, following the acquisition of assets from Origin
-- 2P reserves: 1,168,000 barrels of oil, 2.26 billion cubic feet of
natural gas, 104,000 barrels of natural gas liquids, collectively
1,649,000 barrels of oil equivalent (1)
-- Net present value of 2P reserves (after tax, 10% discount rate):
$57,905,800
(1) Barrels of oil equivalent (boe) may be misleading, particularly if used in
isolation. The boe conversion ratio of 6 Mcf : 1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.
Production Update
The Waitapu-2 and Waihapa-8 wells commenced production on March 6 and March 29,
respectively. Waitapu-2 on NZEC's 100%-owned Eltham Permit had previously
produced but was shut-in during 2013 to allow for Mt. Messenger reservoir
studies and installation of artificial lift. Waitapu-2 commenced pumping on
February 27, finished cleaning up its load fluid on March 6 and averaged 70
bbl/d for the rest of March. Waihapa-8 is a new reactivation opportunity on the
TWN Licenses identified during February by the TWN Joint Arrangement ("TWN JA")
(NZEC and L&M Energy, joint owners of the TWN Licenses). While the TWN JA
originally expected to install a dedicated downhole pump, further review
confirmed that the well could be produced by heating gas at the wellhead and
using existing gas lift, resulting in savings of approximately NZ$200,000 net to
NZEC. Waihapa-8 commenced production from the Mt. Messenger Formation on March
29 and is currently producing at 110 bbl/d (55 bbl/d net to NZEC).
Total corporate production for March, which does not reflect production from the
Waihapa-8 well, averaged 233 bbl/d compared to 228 bbl/d in February and 202
bbl/d in January. The Copper Moki-3 well has been shut-in since early March
pending installation of a new pump. Toko-2B was shut-in on March 12 to allow for
installation of high-volume lift (ESP).
Third-party revenue at the Waihapa Production Station year to date totals
approximately NZ$539,000 net to NZEC.
Upcoming Production
NZEC anticipates that three existing wells could further add to oil production
during Q2-2014 (Table 1). Installation of artificial lift on the Waihapa-2 well
is nearly complete, and the well is expected to commence production from the Mt.
Messenger Formation by mid-April. Installation of high-volume lift (ESP) on the
Toko-2B well is expected to be complete in mid-April. In addition, if further
evaluation of the Waihapa-1B well confirms production potential from the
Tikorangi Formation using artificial lift, the TWN JA will consider whether the
well could be advanced to production in Q2-2014. Well logs and seismic data also
show that the Waihapa-1B well offers additional production potential from an
uphole completion in the Mt. Messenger Formation.
Newly Identified Low-Cost Opportunities on the TWN Licenses
The TWN JA continues to review well logs and historical drilling records across
the TWN Licenses and has identified three new opportunities for uphole
completions in the Mt. Messenger Formation. The Waihapa-3, Waihapa-4 and
Waihapa-5 wells were all produced historically from the Tikorangi Formation.
Recompletions are significantly cheaper than drilling new wells, and successful
wells could be tied into the Waihapa Production Station using existing
infrastructure. The TWN JA will continue to assess production potential from the
Mt. Messenger Formation in these wells.
To view Table 1 - NZEC's Production & Development Wells, click the following
link: http://media3.marketwire.com/docs/nz402-Table1.pdf.
Year-end Reserves
As required under National Instrument 51-101 - Standards of Disclosure for Oil
and Gas Activities, the Company commissioned Deloitte LLP to prepare a year-end
oil reserve estimate and economic evaluation with an effective date of December
31, 2013. NZEC's Proved + Probable (2P) reserves have increased 145% when
compared to the reserves reported at December 31, 2012, reflecting the
acquisition in October 2013 of a 50% interest in the TWN Licenses. The reserve
estimate and economic evaluation reflects NZEC's 100% interest in the Eltham
Permit and its 50% interest in the Waihapa and Ngaere licenses. Additional
information regarding the Company's reserves is available in the Company's Form
51-101F1 Statement of Reserves Data dated April 2, 2014, which is filed on SEDAR
at www.sedar.com.
Marketable Oil and Gas Reserves
Attributable to New Zealand Energy Corp. (1)
As at December 31, 2013
Forecast Prices and Costs
----------------------------------------------------------------------------
Light & Natural Gas Barrels Oil
Reserves Medium Oil Natural Gas Liquids Equivalent
Category (bbl)(2) (Mcf)(3) (bbl) (boe)(4)
----------------------------------------------------------------------------
Proved
Developed Producing 517,000 935,000 40,000 713,000
Developed Non-Producing 181,000 554,000 27,000 301,000
Undeveloped 111,000 88,000 3,000 129,000
Total Proved 809,000 1,576,000 71,000 1,143,000
Probable 359,000 683,000 34,000 506,000
Proved + Probable 1,168,000 2,260,000 104,000 1,649,000
----------------------------------------------------------------------------
Notes:
(1) Net reserves to NZEC after deduction of royalty obligations payable to
the New Zealand government and Origin Energy Resources NZ (TAWN)
Limited.
(2) Numbers may not sum due to rounding. See Cautionary Note Regarding
Reserve Estimates.
(3) bbl - barrels.
(4) Mcf - thousand cubic feet of natural gas.
(5) boe - barrels of oil equivalent using a conversion ratio of 6 Mcf : 1
bbl. Barrels of oil equivalent (boe) may be misleading, particularly
if used in isolation. The boe conversion ratio is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.
Net Present Value of Future Net Revenue
Attributable to New Zealand Energy Corp. (1)
After Tax, Discounted at% per year
As at December 31, 2013
Forecast Prices and Costs
----------------------------------------------------------------------------
Reserves 0% 5% 8% 10%
Category ($'000) ($'000) ($'000) ($'000)
----------------------------------------------------------------------------
Proved
Developed Producing $ 42,349.6 $ 24,786.3 $ 20,986.3 $ 18,452.9
Developed Non-
Producing 14,141.9 20,443.9 19,922.3 19,574.6
Undeveloped 6,591.4 4,911.0 4,248.2 3,806.3
Total Proved 63,082.9 50,141.1 45,156.8 41,833.8
Probable 34,266.6 22,110.1 18,487.2 16,072.0
Proved + Probable 97,349.5 72,251.2 63,644.0 57,905.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Unit Value
Reserves 15% 20% 10%
Category ($'000) ($'000) ($/boe)
----------------------------------------------------------------------------
Proved
Developed Producing $ 15,261.1 $ 13,286.9 $ 22.42
Developed Non-
Producing 17,762.9 16,042.2 57.57
Undeveloped 3,043.8 2,489.1 3.27
Total Proved 36,067.8 31,818.2 31.84
Probable 12,556.5 10,264.8 27.76
Proved + Probable 48,624.3 42,083.0 30.59
----------------------------------------------------------------------------
Notes:
(1) Net present value of future net revenue to NZEC after deduction of
royalty obligations payable to the New Zealand On behalf of the Board
of Directors
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 1.93 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.
Cautionary Note Regarding Forward-looking Statements
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 "expectation", "will",
"expect", "continue", "could", "further", "pending", "anticipates", "offers",
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.
Cautionary Note Regarding Reserve Estimates
The oil and gas reserve calculations and net present value projections were
estimated in accordance with the Canadian Oil and Gas Evaluation Handbook
("COGEH") and National Instrument 51-101 ("NI 51-101"). The term barrels of oil
equivalent ("boe") may be misleading, particularly if used in isolation. A boe
conversion ratio of six Mcf: one bbl was used by NZEC. This conversion ratio is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead. Reserves
are estimated remaining quantities of oil and natural gas and related substances
anticipated to be recoverable from known accumulations, as of a given date,
based on: the analysis of drilling, geological, geophysical, and engineering
data; the use of established technology; and specified economic conditions,
which are generally accepted as being reasonable. Reserves are classified
according to the degree of certainty associated with the estimates. Proved
Reserves are those reserves that can be estimated with a high degree of
certainty to be recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves. Probable Reserves are those
additional reserves that are less certain to be recovered than proved reserves.
It is equally likely that the actual remaining quantities recovered will be
greater or less than the sum of the estimated proved plus probable reserves.
Revenue projections presented are based in part on forecasts of market prices,
current exchange rates, inflation, market demand and government policy which are
subject to uncertainties and may in future differ materially from the forecasts
above. Present values of future net revenues do not necessarily represent the
fair market value of the reserves evaluated. Information concerning reserves may
also be deemed to be forward-looking as estimates imply that the reserves
described can be profitably produced in the future. These statements are based
on current expectations that involve a number of risks and uncertainties, which
could cause the actual results to differ from those anticipated.
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
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
New Zealand Energy (TSXV:NZ)
Historical Stock Chart
From Mar 2024 to Apr 2024
New Zealand Energy (TSXV:NZ)
Historical Stock Chart
From Apr 2023 to Apr 2024
