New Zealand Energy Production and Operational Update
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan 6, 2014) - New
Zealand Energy Corp. (TSX-VENTURE:NZ)(OTCQX:NZERF) today provided
an update on its production and operational activities. The Company
is currently producing approximately 236 barrels ("bbl") per day of
light, high-quality oil (average daily production net to NZEC
during December 2013) from eight wells in the Taranaki Basin of New
Zealand's North Island, with the expectation that three more wells
will contribute to production by the end of Q1-2014.
HIGHLIGHTS
TWN Reactivated Wells (NZEC 50% interest)
- Six wells reactivated and producing oil from Tikorangi
Formation using installed gas lift
- Total production (100% basis) during December 2013: 9,332 bbl
oil, 16.2 million cubic feet ("mmcf") natural gas(1)
- Total production net to NZEC during December 2013: 4,666 bbl
oil
- Average daily production (100% basis) during December 2013: 302
bbl oil, 0.52 mmcf natural gas,1 average water cut 74%
- Average daily production net to NZEC during December 2013: 151
bbl oil
TWN Recompleted Well (NZEC 50% interest)
- Existing Tikorangi Waihapa-2 well recompleted uphole to access
bypassed production in Mt. Messenger Formation
- Perforated two zones, well flowed from natural reservoir
pressure for three short flow tests
- A further flow test planned for early January, followed by
shut-in for pressure build-up
- Commercial production expected in early February
- Recompletion activities on a second well expected to commence
by mid-January
Eltham Permit Wells (NZEC 100% interest)
- Average daily production during December 2013: 85 bbl/d from
Copper Moki-1 and Copper Moki-2 wells
- Copper Moki-3 shut-in during December, workover activities
underway to resume production in January
- Waitapu-2 well expected to resume production in January
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 acquired the TWN
Licenses on October 28, 2013 and 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.
TWN Licenses - Tikorangi Formation Production and Development
Plan
During November 2013 the TWN JA reactivated oil and gas
production from six wells that had been drilled to the Tikorangi
Formation by previous operators. Well head metering was installed
at each well to monitor flow rates on a well-by-well basis. A
number of wells flowed from natural pressure for two to three
weeks, and all six wells are now being produced using an existing
gas lift system. The TWN JA is monitoring production data to
identify the most efficient method to optimize oil production from
each well, which may include installation of high-volume electric
submersible pumps ("ESPs") or other methods of artificial lift.
NZEC believes the Tikorangi Formation underlying the TWN
Licenses holds significant production potential. Current
development plans for the Tikorangi Formation on the TWN Licenses
include drilling two new Tikorangi wells on the Waihapa License in
2014.(2) In addition, the TWN JA has identified production
potential from additional existing wells in other areas of the TWN
Licenses, and from additional drilling opportunities identified on
3D seismic.
TWN Licenses - Mt. Messenger Formation Production and
Development Plan
In December 2013, the TWN JA recompleted the Waihapa-2 well to
access bypassed pay with production potential in the Mt. Messenger
Formation. Waihapa-2 had been drilled by a previous operator
through the Mt. Messenger Formation to the Tikorangi, and produced
4.8 million bbl of oil from the Tikorangi Formation. The TWN JA
used a service rig to perforate two intervals in the Mt. Messenger
Formation. The well flowed from natural reservoir pressure for
three short tests. Following a further flow test in early January,
the well will be shut-in for pressure build-up, with commercial
production expected in early February.
A number of additional existing wells on the TWN Licenses have
uphole completion potential in the Mt. Messenger Formation.
Recompletion of these wells is 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. The TWN JA plans to commence uphole
completion of the Waihapa-1 well in mid-January.2
Exploration and development plans for the Mt. Messenger
Formation on the TWN Licenses in 2014 include drilling three new
Mt. Messenger wells (in addition to the uphole completions referred
to above).2 The TWN JA will prioritize exploration targets that can
be accessed from existing drill pads that are tied in or in close
proximity to the Waihapa Production Station infrastructure.
Eltham Permit Production and Development Plans
NZEC's Copper Moki-1 and Copper Moki-2 wells produced a total of
2,633 bbl of oil during December 2013, with average daily
production of 85 bbl/day (100% net to NZEC). NZEC will commence
workover activities on the Copper Moki-3 well in mid-January to
clean out sand around the well bore and replace the pump, with the
objective of recommencing production in January.
NZEC completed installation of artificial lift on the Waitapu-2
well in December, but has encountered problems with the down hole
pump. Servicing of the pump will commence this week to allow
Waitapu-2 to recommence production.
(1) Gas produced from the reactivated Tikorangi wells has been
used as fuel for the compressor at the Waihapa Production Station.
There were no gas sales through December.
(2) Development and operating costs are to be funded initially
by existing working capital and cash flows from production.
However, in order to carry out all of the planned development
activities, the Company is considering a number of options to
increase its financial capacity. These options include increasing
cash flow from oil production, additional joint arrangements,
commercial arrangements or other financing alternatives.
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", "planned", "expected", "may include",
"expectation", "will be", "plans", "could be", "objective" 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 Corp.John ProustChief Executive Officer &
DirectorNorth American toll-free:
1-855-630-8997info@newzealandenergy.comNew Zealand Energy CorpBruce
McIntyreActing General Manager Exploration & DirectorNorth
American toll-free: 1-855-630-8997info@newzealandenergy.comNew
Zealand Energy CorpRhylin BailieVice President Communications &
Investor RelationsNorth American toll-free:
1-855-630-8997info@newzealandenergy.comwww.newzealandenergy.com
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