New Zealand Energy Corp. (TSX VENTURE:NZ)(OTCQX:NZERF) ("NZEC" or the "Company")
today announced that it has closed the acquisition of strategic upstream and
midstream assets (the "Acquisition") from Origin Energy Resources NZ (TAWN)
Limited. NZEC now owns a 50% interest in the Tariki, Waihapa and Ngaere
Petroleum Mining Licences ("TWN Licences") in the main Taranaki Basin production
fairway, as well as the Waihapa Production Station and associated gathering and
sales infrastructure (collectively, "TWN Assets"). NZEC and L&M Energy Limited
("L&M") have acquired the assets jointly and formed a 50/50 joint venture to
explore, develop and operate the TWN Assets, with NZEC as the operator. NZEC
will immediately commence its development and exploration program for the TWN
Assets.
Concurrent with closing of the Acquisition, NZEC has booked additional reserves
and resources (Table 1). NZEC's 50% share of Proved and Probable Reserves (2P
Reserves)(1) attributable to the TWN Licences is estimated to have a before tax
net present value ("NPV") of $31.4 million (10% discount rate). NZEC's 50% share
of 2P Reserves is estimated at 926,350 barrels of oil, 723.9 million cubic feet
of natural gas and 25,350 barrels of natural gas liquids, collectively 1,072,350
barrels of oil equivalent(2) ("boe"). NZEC's share of Contingent Resources(1) is
estimated at 580,000 boe, with Prospective Resources(1) estimated at 11,706,000
boe. NZEC's current reserve portfolio is summarized in Table 1. Additional
information regarding the Company's reserves and resources is available in the
Company's Form 51-101F1 Statement of Reserves Data dated April 22, 2013 and in
the Company's Interim Statement of Reserves and Resources dated October 28,
2013, both of which are filed on SEDAR at www.sedar.com.
"This acquisition more than doubles the Company's oil and gas reserves and
expands NZEC's presence in New Zealand from both an exploration and
infrastructure perspective," said John Proust, Chief Executive Officer and
Director of NZEC. "The new properties offer immediate production and cash flow
potential from existing wells, and significant exploration potential across
multiple horizons, including the Mt. Messenger and the deeper productive
Tikorangi and Kapuni formations. We will move quickly to implement our
development plans for the TWN Assets and look forward to demonstrating the value
of this acquisition as our exploration and development program unfolds."
NZEC also announced that the Company has closed a $16.1 million non-brokered
private placement, raising $1.1 million more than the original $15 million
objective. Of the funds raised, $8.2 million will be used for financing costs
and general working capital while the remainder was used to finance the
Acquisition (plus a $6 million deposit paid previously).
The Company issued 48.9 million subscription receipts ("Subscription Receipts")
at a price of $0.33 per Subscription Receipt. The Subscription Receipts are
convertible into units (the "Units") consisting of one common share (a "Share")
and one-half of one non-transferable share purchase warrant (each whole warrant
referred to as a "Warrant") of the Company. Each Warrant will entitle the holder
to acquire one Share at a price of $0.45 with an expiry date of October 28,
2014.
NZEC will file a short form prospectus with the applicable regulatory
authorities in each of the provinces of Canada where Subscription Receipts were
sold. Each Subscription Receipt will automatically convert into one Unit on the
date that a final receipt for the prospectus has been issued by the applicable
regulatory authorities. The Shares and the Shares underlying the Warrants will
be free-trading on conversion of the Subscription Receipts and exercise of the
Warrants.
In relation to the private placement, NZEC paid $1 million in finder's fees and
issued three million finder's special warrants. The special warrants will
automatically convert into finder's warrants on the date that a final receipt
for the prospectus has been issued by the applicable regulatory authorities.
Each finder's warrant entitles the finder to acquire one Share at an exercise
price of $0.33 with an expiry date of October 28, 2014. The Shares underlying
the finder's warrants will be free-trading on conversion of the special warrants
and exercise of the finder's warrants.
On behalf of the Board of Directors
John Proust, Chief Executive Officer & Director
(1) Reserve and resource estimates for the TWN Licences prepared by Deloitte
LLP, with an effective date of April 30, 2013. See Table 1, Cautionary Note
Regarding Reserve and Resource Estimates, NZEC's Form 51-101F1 Report and NZEC's
Interim Statement of Reserves and Resources.
(2) Barrels of oil equivalent (boe) is calculated using a conversion rate of 6
Mcf : 1 bbl and 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.
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 2.25 million acres
(including permits and acquisitions pending) 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. 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.
Forward-looking Information
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 any of the words "will" 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. 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. This document contains
forward-looking statements and assumptions pertaining to the following: business
strategy, strength and focus; the granting of regulatory approvals; the timing
for receipt of regulatory approvals; geological and engineering estimates
relating to the resource potential of the properties; the estimated quantity and
quality of the Company's oil and natural gas resources; supply and demand for
oil and natural gas and the Company's ability to market crude oil, natural gas
and; expectations regarding the ability to raise capital and to continually add
to reserves and resources through acquisitions and development; the Company's
ability to obtain qualified staff and equipment in a timely and cost-efficient
manner; the ability of the Company's subsidiaries to obtain mining permits and
access rights in respect of land and resource and environmental consents; the
recoverability of the Company's crude oil, natural gas reserves and resources;
and future capital expenditures to be made by the Company.
Actual results could differ materially from those anticipated in these
forward-looking statements as a result of the risk factors set forth below and
elsewhere in the document, such as the speculative nature of exploration,
appraisal and development of oil and natural gas properties; uncertainties
associated with estimating oil and natural gas resources; 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;
operating hazards and risks inherent in oil and natural gas operations;
volatility in market prices for oil and natural gas; 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. Readers are cautioned that the foregoing list
of factors is not exhaustive. Statements relating to "reserves and resources"
are deemed to be forward-looking statements, as they involve the implied
assessment, based on certain estimates and assumptions, that the resources
described can be profitably produced in the future. 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 and Resource Estimates
The oil and gas reserve and resource 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. Contingent
resources are those quantities of oil and gas estimated on a given date to be
potentially recoverable from known accumulations using established technology or
technology under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies. Contingencies may
include factors such as economic, legal, environmental, political and regulatory
matters, or a lack of markets. Prospective resources are those quantities of oil
and gas estimated on a given date to be potentially recoverable from
undiscovered accumulations. The resources reported are estimates only and there
is no certainty that any portion of the reported resources will be discovered
and that, if discovered, it will be economically viable or technically feasible
to produce.
Table 1 - Marketable Oil and Gas Reserves Attributable to New Zealand Energy
Corp.
Waihapa & Ngaere Petroleum Mining Licenses (1)
As at April 30, 2013
----------------------------------------------------------------------------
Light & Natural Barrels NPV
Medium Natural Gas Oil (Before Tax,
Reserves Oil Gas Liquids Equivalent 10%
Category (bbl) (MMcf) (bbl) (boe) Discount)
----------------------------------------------------------------------------
Proved Developed (Non-
producing) 491,850 381.00 13,350 568,700 $ 18,071,000
Proved Undeveloped 129,050 103.25 3,600 149,900 3,670,000
Total Proved 620,900 484.25 16,950 718,550 21,741,000
Probable 305,450 239.65 8,400 353,800 9,696,500
Proved + Probable 926,350 723.90 25,350 1,072,350 31,437,500
Possible - - - - -
Proved + Probable +
Possible 926,350 723.90 25,350 1,072,350 $ 31,437,500
----------------------------------------------------------------------------
Eltham Permit(2)
As at December 31, 2012
----------------------------------------------------------------------------
Light & Natural Barrels NPV
Medium Natural Gas Oil (Before Tax,
Reserves Oil Gas Liquids Equivalent 10%
Category (bbl) (MMcf) (bbl) (boe) Discount)
----------------------------------------------------------------------------
Proved Developed
(Producing) 307,800 594.90 38,700 445,650 14,400,000
Proved Undeveloped 20,600 31.90 2,000 27,917 893,000
Total Proved 328,400 626.80 40,700 473,567 15,293,000
Probable 158,300 329.60 21,500 234,733 7,320,000
Proved + Probable 486,700 956.40 62,200 708,300 22,613,000
Possible 195,600 398.10 25,800 287,750 7,549,000
Proved + Probable +
Possible 682,300 1,354.50 88,000 996,050 30,162,000
----------------------------------------------------------------------------
Notes:
1. Reserves attributable to the Waihapa and Ngaere Petroleum Mining
Licenses (two of the three permits in the TWN Licences) were estimated
by Deloitte LLP with an effective date of April 30, 2013, as announced
by NZEC on June 17, 2013. The assumptions used in these estimations are
outlined in the Interim Reserve and Resource Report filed on SEDAR at
www.SEDAR.com.
2. Reserves attributable to the Eltham Permit were estimated by Deloitte
LLP with an effective date of December 31, 2012, as announced by NZEC on
April 25, 2013. The assumptions used in these estimations were reported
in NZEC's NI 51-101 reserve reports filed on SEDAR at www.SEDAR.com.
3. Reserves are presented before the deduction of royalty obligations
payable to Origin and to the New Zealand government.
4. MMcf - million cubic feet. Barrels of oil equivalent (boe) is calculated
using a conversion ratio of 6 Mcf : 1 bbl. Barrels of oil equivalent 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.
5. 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. See Cautionary
Note Regarding Reserve and Resource Estimates.
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
Executive 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
New Zealand Energy Corp.
Chris Bush
New Zealand Country Manager
New Zealand: 64-6-757-4470
info@newzealandenergy.com
www.newzealandenergy.com
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