New Zealand Energy Reactivates Oil Production from Six Wells on Newly Acquired TWN Licenses
December 02 2013 - 7:00AM
Marketwired
New Zealand Energy Reactivates Oil Production from Six Wells on
Newly Acquired TWN Licenses
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec 2, 2013) - New
Zealand Energy Corp. (TSX-VENTURE:NZ)(OTCQX:NZERF) is pleased to
announce that six wells on the TWN Licenses have been reactivated
and are currently flowing into the Waihapa Production Station. New
Zealand Energy Corp., through its subsidiaries (collectively "NZEC"
or the "Company"), holds a 50% interest in the TWN Licenses, with
L&M Energy and its related entities (collectively "L&M")
holding the other 50%. NZEC and L&M have formed the TWN Joint
Arrangement ("TWN JA"), with NZEC as the operator, to explore and
develop the TWN Licenses and operate the Waihapa Production Station
and associated infrastructure.
Highlights
- Six wells reactivated and currently flowing to the Waihapa
Production Station
- The initial two wells were reactivated sequentially
- The first well flowed for 19 days, produced 4,797 barrels
("bbl") oil, 6.0 million cubic feet ("mmcf") natural gas, average
water cut 35%, with average daily production of 252 bbl/day (126
bbl/day net to NZEC)
- The second well flowed for 4 days, produced 730 bbl oil, 0.9
mmcf natural gas, average water cut 35%, average daily production
of 182 bbl/day (91 bbl/day net to NZEC)
- Total production (100% basis): 5,528 bbl oil, 6.9 mmcf natural
gas and 3,052 bbl water
- Net NZEC production: 2,764 bbl oil, 3.45 mmcf natural gas and
1,526 bbl water
- The final four wells have commenced production within the last
24 hours, following installation of wellhead metering
- All six wells are equipped with gas lift; however, four are
flowing from natural formation pressure and two are using the
installed gas lift
- TWN JA oil and natural gas production is delivered directly to
the Waihapa Production Station using existing pipelines. Following
processing:
- Oil is delivered by pipeline to the Shell-operated Omata Tank
Farm and sold at Brent pricing
- Natural gas from the reactivated wells (less fuel gas) is sold
to Contact Energy
- TWN JA is actively pursuing third-party processing
opportunities for the Waihapa Production Station that will further
increase revenue for the midstream business. In the month of
November, TWN JA has processed and transported over 35,016 bbl of
third-party oil and water, which has generated additional cash
flow. TWN JA continues to pursue other third-party
opportunities
"Initial oil production from the first reactivated wells in the
Tikorangi Formation has exceeded our expectations," said John
Proust, Chief Executive Officer and Director of NZEC. "The
reactivation process is proceeding as planned, confirming that
NZEC's team, as operator, has both the insight and skills required
to successfully assess, develop and revitalize the TWN Licenses and
Waihapa Production Station. We will continue to report production
and development activities to our shareholders on a monthly basis,
through to our next quarterly report, as TWN development
proceeds."
The reactivated wells had been drilled to the Tikorangi
Formation by previous operators and were produced intermittently
using a gas lift system, but had been effectively shut-in for a
number of years. Current production rates exceed the 40
bbl/day/well (20 bbl/day/well net to NZEC) contemplated in the
Company's 2013/2014 development plan. The first two wells are
currently choked back because of higher than expected pressures and
lower water cut than anticipated.
Well head metering has been installed at each of the six wells.
The metering includes turbine meters, local totalizers and
proportional samplers and will allow NZEC to monitor flow rates on
a well-by-well basis. Gas lift is available for each well and will
be activated when required.
NZEC also intends to install high-volume electric submersible
pumps ("ESPs") to further increase production rates. ESPs will be
installed on two wells, with potential for installation of
additional ESPs on the remaining four wells. The Company will begin
ESP installation once initial productivity has declined, with the
expectation of installing the first ESP in Q1-2014.
A number of additional wells on the TWN Licenses, with previous
production from the Tikorangi Formation, have uphole completion
potential in the Mt. Messenger Formation. Recompletion of these
wells will be significantly less expensive and faster than drilling
new wells, and economic discoveries could be tied in to the Waihapa
Production Station using existing oil and gas gathering pipelines.
Existing well logs and recently completed pressure surveys on two
wells confirm uphole completion potential in the Mt. Messenger
Formation. The first uphole completion will be initiated before
year end, with the second to follow in early 2014.
"NZEC is focused on increasing production and cash flow in the
very near term," continued Mr. Proust. "With an exceptional
property portfolio, a skilled and dedicated team, and a
comprehensive development plan, NZEC has established a clear path
for long-term growth. We look forward to building value for our
shareholders as our 2014 exploration and development program
unfolds."
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 2.2 million acres (including permits 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 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.
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", "will be", "anticipates", "intends",
"expectation", "would be", "could be", 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; 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.
New Zealand Energy ContactsJohn ProustChief Executive Officer
& DirectorNorth American toll-free: 1-855-630-8997Bruce
McIntyreExecutive Director, Acting General Manager ExplorationNorth
American toll-free: 1-855-630-8997Rhylin BailieVice President
Communications & Investor RelationsNorth American toll-free:
1-855-630-8997Chris BushNew Zealand Country ManagerNew Zealand:
64-6-757-4470info@newzealandenergy.comwww.newzealandenergy.com
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