New Zealand Energy Production and Operational Update
February 04 2014 - 7:30AM
Marketwired
New Zealand Energy Production and Operational Update
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb 4, 2014) -
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 Name |
Target Formation |
|
Notes |
Copper Moki-1 Copper Moki-2 Copper Moki-3 |
Eltham Eltham Eltham |
Mt.
M Mt. M Mt. M |
|
Producing since Dec 2011 Producing since Apr 2012 Producing since
Jul 2012 |
|
|
|
|
|
Waitapu-2 |
Eltham |
Mt.
M |
|
Produced Dec 2012 - May 2013 Expected to recommence in Q1-2014 |
|
|
|
|
|
Reactivated Tikorangi Wells Toko-2B, Ngaere-3, Ngaere-2A,
Ngaere-1, Waihapa-H1, Waihapa-6A |
TWN |
Tikorangi |
|
Existing wells drilled by previous operator Oil production
reactivated in Nov 2013 Installation of high-volume lift on Toko-2B
targeted for Q1-2014 |
|
|
|
|
|
Potential Tikorangi Well Waihapa-1B |
TWN |
Tikorangi |
|
Tikorangi flow test scheduled for Feb 2014 Production targeted for
Q1-2014 Additional upside from Mt. M formation |
|
|
|
|
|
Uphole Recompletions Waihapa-2 Waihapa-1B |
TWN |
Mt.
M |
|
Waihapa-2 production targeted for Q2-2014 Waihapa-1B Mt. M
recompletion contingent on results of Tikorangi production
test |
|
|
|
|
|
Reactivated Mt. M Well Waihapa-8 |
TWN |
Mt.
M |
|
Production targeted for Q2-2014 |
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
New Zealand Energy Corp.John ProustChief Executive Officer &
DirectorNorth American toll-free: 1-855-630-8997New Zealand Energy
Corp.Bruce McIntyreActing General Manager Exploration &
DirectorNorth American toll-free: 1-855-630-8997New Zealand Energy
Corp.Rhylin BailieVice President Communications & Investor
RelationsNorth American toll-free:
1-855-630-8997info@newzealandenergy.comwww.newzealandenergy.com
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