New Zealand Energy Corp.
TSX VENTURE : NZ

New Zealand Energy Corp.

December 13, 2011 08:30 ET

New Zealand Energy Copper Moki-1 Production Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 13, 2011) - New Zealand Energy Corp. ("NZEC" or the "Company") (TSX VENTURE:NZ) is pleased to provide an update on production from its Copper Moki-1 well in New Zealand's Taranaki Basin. The well is free-flowing at an initial rate of approximately 580 barrels of oil per day through an 18/64th inch choke with a gas oil ratio of 970 standard cubic feet per barrel. NZEC has installed surface facilities to accommodate production of up to 1,000 barrels of oil per day.

The Company expects near-term operating netbacks in excess of US$90 per barrel. The oil is sweet and high quality and sells at a premium to the Brent reference price. NZEC anticipates establishing permanent facilities by mid-2012 that can be expanded to handle production from additional wells in the Copper Moki area.

Copper Moki-1 is NZEC's first well in the Taranaki Basin. Copper Moki-1 was completed in August 2011 and tested over a two-day period, during which the well flowed 1,100 barrels of 41.8 API oil per day and 855 thousand cubic feet ("mcf") per day of natural gas on a 28/64th inch choke. NZEC designed an extended production test at a restricted rate to evaluate the reservoir under constant operating conditions and flowed the well for 12 days with average production of 521 barrels of oil and 508 mcf of natural gas per day on a 20/64th inch choke.

Following pressure build up, the well commenced production on December 10, 2011. Field production rates are expected to level out at 550 barrels of oil and 535 mcf of natural gas per day. Produced oil is being trucked to the Shell-operated Omata Tank Farm, approximately 45 km north of the Copper Moki well site, and sold to Shell as per an off-take agreement. NZEC is also evaluating options to market its natural gas production, given the close proximity of open-access gas pipelines and significant in-country demand for natural gas.

NZEC is finalizing its multi-well drilling contract for Copper Moki-2 and Copper Moki-3, delineation wells for the Copper Moki pool, and expects to commence drilling of Copper Moki-2 by year-end. The Copper Moki-2 well will be drilled from the same pad as the Copper Moki-1 well to target both the Urenui and Mt. Messenger formations. NZEC will continue to produce Copper Moki-1 as drilling proceeds, and could very quickly bring Copper Moki-2 on-stream using the same production facilities should the well yield oil and natural gas production. The Copper Moki-3 well will be spudded upon completion of Copper Moki-2 and will target multi-zone potential in the Mt. Messenger, Urenui and Moki formations.

On behalf of the Board of Directors

"Bruce McIntyre", President & Director

About New Zealand Energy Corp.

NZEC is an oil and natural gas company engaged in the exploration, development and production 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.

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 "expect", "will be", "will", "plan", "anticipate" 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; 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; 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 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.

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.

Contact Information

  • New Zealand Energy Corp.
    Rhylin Bailie
    Vice President, Communications & Investor Relations
    604-601-2010 or Toll-free: 1-855-601-2010

    New Zealand Energy Corp.
    John Proust
    Chief Executive Officer & Director
    604-601-2010 or Toll-free: 1-855-601-2010
    info@newzealandenergy.com
    www.newzealandenergy.com