NZ New Zealand Energy Corp

New Zealand Energy Corp. ("NZEC" or the "Company") (TSX VENTURE:NZ)(OTCQX:NZERF)
is pleased to provide an operational update on production and exploration
activities on its 100%-owned Eltham Permit in the Taranaki Basin of New
Zealand's North Island. 


Highlights



--  Current production is 1,000 barrels of oil per day ("bbl/d") from the
    Mt. Messenger formation, with an additional 341 barrels of oil
    equivalent per day ("boe/d") of natural gas plus associated liquids to
    be tied in by the end of Q2-2012(1) 
--  Management reiterates guidance of 3,000 boe/d production by year end 
--  Copper Moki-1 well ("CM-1") has produced more than 62,000 barrels of oil
    to date 
--  Copper Moki-2 well ("CM-2") is currently producing approx. 700 bbl/d and
    approx. 850 thousand cubic feet of natural gas per day ("mcf/d")(1) 
--  Copper Moki-3 well ("CM-3") encountered 12 metres of net pay in the Mt.
    Messenger formation and 15 metres of net pay in the Moki formation; NZEC
    plans to complete and flow test both formations 
--  Copper Moki-4 ("CM-4") has been drilled to target depth of 2,125 metres 
--  100 km2 3D seismic survey underway across the Eltham and Alton permits 



Copper Moki Production Update

CM-1 has been flowing from natural reservoir pressure since December 10, 2011
and has produced more than 62,000 barrels of oil since it was first tested in
August 2011. Production rates have averaged 452 bbl/d and 1,052 mcf/d(1) since
commencing continuous production in December 2011. Over the last 30 days, CM-1
has produced at an average rate of 377 bbl/d and 1,410 mcf/d(1) through a
24/64th inch choke. 


CM-2 flowed 14,825 barrels of oil and 15,352 mcf of natural gas(1) during a
16-day flow test in February and was subsequently shut-in for pressure build-up.
NZEC initiated continuous production from CM-2 on April 1, 2012. The well is
currently producing from natural reservoir pressure out of the Mt. Messenger
formation at an average rate of 700 bbl/d and 850 mcf/d(1) through a 22/64th
inch choke. The CM-2 well encountered 12 metres of net pay in the Mt. Messenger
formation, which is comparable to CM-1.


Current Company production is approx. 1,000 bbl/d and approx. 2,050 mcf/d(1),
exclusively from CM-1 and CM-2. The wells are producing 41.8 degrees oil that is
trucked to the Shell-operated Omata tank farm and sold at Brent pricing,
resulting in a field netback of approx. US$90/barrel. Natural gas and associated
natural gas liquids are currently being flared until the Company completes a
2.6-km pipeline and associated production and sales agreements, with the
pipeline scheduled for completion by the end of Q2-2012. NZEC has chosen to
choke back its production wells to conserve the value of its natural gas and
associated natural gas liquids. 


(1) Natural gas and associated natural gas liquids are currently being flared
until the Company completes a 2.6-km pipeline and associated production and
sales agreements, with the pipeline scheduled for completion by the end of
Q2-2012.


Exploration Update

CM-3 reached target depth at 3,167 metres in mid-March and is the Company's
first well drilled through to NZEC's deeper exploration target, the Moki
formation. After evaluation, the Company identified 12 metres of net pay within
the Mt. Messenger formation and 15 metres of net pay within the Moki formation.


NZEC commenced drilling CM-4 on March 28, 2012 from the Copper Moki pad,
targeting both the Urenui and Mt. Messenger formations. NZEC reached target
depth of 2,125 metres on April 10, 2012, and is currently evaluating open hole
logs. 


The Company elected not to evaluate CM-3 with the drilling rig in order to
exercise the option under the rig contract to drill CM-4 within the allotted
period of time. A service rig is available and is expected to commence
completion of CM-3 within the next two weeks, once the drill rig on CM-4 is
removed. Since CM-3 is NZEC's first well to be drilled to the Moki formation,
the Company plans to thoroughly evaluate the characteristics of the formation in
order to guide its exploration strategy for future Moki targets. Upon
perforation, NZEC's technical team will determine if the formation flows
naturally. If further stimulation is required, additional time will be needed to
allow for a comprehensive evaluation of the Moki formation. Once the Moki
formation is fully evaluated the Company will determine whether the Mt.
Messenger formation will be tested in CM-3 or evaluated through an additional
well.


NZEC reiterates corporate production guidance of 3,000 boe/d by year-end 2012. 

The Company had previously allocated funds to drill six Mt. Messenger
exploration wells in the Taranaki Basin in the second half of 2012. NZEC will
provide additional details regarding its 2012 capital program for both the
Taranaki Basin and the East Coast Basin, including plans to accelerate its
exploration activities, with the release of the Company's Q4-2011 financial
statements at the end of April. 


The Taranaki Basin offers multi-zone potential and NZEC's exploration strategy
is to prioritize wells identified on 3D seismic that have well-defined,
lower-risk Mt. Messenger targets coupled with additional exploration potential
from the Urenui, Moki or Kapuni formations. The Company is completing a 100-km2
3D seismic survey toward the north end of its Taranaki permits that will further
define existing targets and reduce drilling risk while potentially identifying
new exploration targets and expanding NZEC's inventory of drill-ready locations.


The Taranaki Basin is currently New Zealand's only oil and gas producing basin,
producing approximately 130,000 boe/d from 18 fields. Within the Taranaki Basin,
NZEC holds and is the operator of two permits covering 169,949 net acres(2). The
permits are on trend with numerous oil and gas producing fields, some of which
have been producing for decades, including the Kapuni gas field producing from
the deeper Kapuni formation, the Waihapa/Ngaere oil field producing from the
Kapuni and Tikorangi formations, and the Cheal oil field producing from the
Urenui and Mt. Messenger formations.


On behalf of the Board of Directors

Bruce McIntyre, President & Director 

(2) Assumes NZEC completes the requirements to increase its interest in the
Alton permit from 50% to 65%, as per an agreement with L&M Energy Limited.


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 nearly two 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.


Forward-looking Statements

This news release 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 "to be", "guidance", "plans", "scheduled", "will", "will be",
"completing", expects", "expected", "plans", "planning", "allow", "advance" 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
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; the need to obtain various approvals before exploring
and producing oil and natural gas resources; uncertainty in the timing of
receipt of permits and the Company's ability to extend the permits if required;
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. NZEC 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. Such
forward-looking statements included in this news release should not be unduly
relied upon. These statements speak only as of the date of this news release and
NZEC does not undertake to update any forward-looking statements that are
contained in this news release, except in accordance with applicable securities
laws.

New Zealand Energy (TSXV:NZ)
Historical Stock Chart
From Jun 2024 to Jul 2024

New Zealand Energy (TSXV:NZ)
Historical Stock Chart
From Jul 2023 to Jul 2024