New Zealand Energy Corp. Operational Update

New Zealand Energy Corp. Operational Update 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 10/17/12 -- New
Zealand Energy Corp. (TSX VENTURE:NZ)(OTCQX:NZERF) ("NZEC" or "the
Company") is pleased to provide an operational update on the
Company's production and exploration activities in the Taranaki Basin
of New Zealand's North Island. 
Highlights 


 
--  Copper Moki total production to date of more than 175,000 barrels of oil
    with cumulative revenue exceeding US$19 million 
--  Well optimization underway for Copper Moki wells with installation of
    artificial lift 
    --  Objective of increasing and stabilizing oil production rates 
--  Eight well drilling program underway and expected to be complete in Q1-
    2013 
    --  Waitapu-1 completion ongoing, perforating across 18 metres in two
        additional intervals 
    --  Waitapu-2 well expected to reach target depth this week 
--  3,000 boe/d(1) guidance shifted to Q1-2013 to coincide with completion
    of current eight-well program 
--  Interpretation of 3D seismic survey across 50 km2 of Eltham permit
    further defining prospects in Mt. Messenger, Moki, Tikorangi and Kapuni
    formations 
--  Progressing toward Q1-2013 close of Taranaki upstream and midstream
    asset acquisition 

 
Copper Moki Oil Production Update 
To optimize production rates from its three Copper Moki wells, NZEC
has commenced the installation of artificial lift (pump jacks). The
Copper Moki-3 artificial lift is installed and pumping rates will be
varied over the coming week to identify the optimal production rate
for the well. Installation of the Copper Moki-2 artificial lift is
underway and should be complete this week. The Copper Moki-1
artificial lift will be installed immediately after production
commences at Copper Moki-2. NZEC expects oil production rates to
increase and stabilize with the addition of these artificial lift
systems.  
Copper Moki-1 has been flowing from natural reservoir pressure since
December 10, 2011 and has produced more than 92,568 barrels of oil
since it was first tested in August 2011. Copper Moki-2 has been
flowing from natural reservoir pressure since April 1, 2012 and has
produced more than 60,213 barrels of oil since it was first tested in
February 2012. Copper Moki-3 commenced conti
nuous production on July
2, 2012 and has produced more than 22,715 barrels of oil from natural
reservoir pressure since it was first tested in May 2012. The three
Copper Moki wells have produced a total of more than 175,000 barrels
of oil to date with cumulative revenue exceeding US$19 million. 
Once artificial lift installation is complete, raw natural gas from
all three wells will be delivered through NZEC's existing gas
pipeline to the Waihapa Production Station. 
Eight-well Exploration Program Underway 
Waitapu-1 was drilled through the Urenui formation into the Mt.
Messenger formation with a measured depth of 2,213 metres and true
vertical depth of 1,925 metres. Open hole logs showed approximately
30 metres of gross pay in the Mt. Messenger formation, as well as oil
and gas shows in the shallower Urenui formation. NZEC initially
perforated 12 metres across four intervals and, based on preliminary
results, will perforate an additional 18 metres across two intervals
and then shut the well in for pressure build-up. The Company expects
to report results from Waitapu-1 by the end of October. 
Drilling of Waitapu-2 is proceeding to plan and NZEC expects to reach
target depth in the Mt. Messenger formation this week.  
Wellsite construction is underway at NZEC's Arakamu site, located
approximately 3.8 km southwest of Copper Moki and 2.5 km south of
Waitapu. NZEC's technical team has identified two primary targets on
the site - one Mt. Messenger and one Moki - and may drill a third
well with a Moki focus contingent on results from the first Moki
well. 
NZEC expects to complete its current eight well drill program in
Q1-2013, an extension from original guidance of year-end 2012, and
reiterates its 3,000 boe/d guidance related to cumulative production
at the conclusion of the eight-well program.  
3D Seismic Review Defining New Targets  
NZEC's technical team is interpreting seismic data collected in the
100 km2 3D seismic program completed across the Eltham and Alton
permits. Data collected across 50 km2 of the Eltham permit are being
interpreted first, and have revealed sizable prospects in the Mt.
Messenger, Moki, Tikorangi and Kapuni formations. One identified Moki
prospect is estimated to cover an area of 1km by 2km and has become a
priority drill target for NZEC's 2013 exploration campaign. 
Origin Asset Acquisition Update 
NZEC continues to review seismic and well log data from the four TAWN
Petroleum Mining Licenses, which are part of the asset acquisition
from a subsidiary of Origin Energy Limited ("Origin") as announced in
May 2012, and has identified an additional four Mt. Messenger
prospects, bringing the total number of 3D-defined prospects on the
TAWN properties to 18. In addition, the team believes that six of the
previously drilled wells have uphole completion potential in NZEC's
target formations. As evaluation proceeds, NZEC is compiling a
priority list of targets on the TAWN properties to be accessed when
NZEC acquires the properties.  
Preparation for closing of the acquisition continues, with the four
conditions precedent being well advanced. Conditional approval for
the acquisition has been received from the TSX Venture Exchange. The
agreement requires two New Zealand government approvals, from the
Overseas Investment Office and from New Zealand Petroleum & Minerals.
Both applications have been submitted. NZEC is working closely with
Origin and Contact Energy to finalize agreements in order to close
the acquisition, now targeted for Q1-2013.  
One of the conditions of the acquisition is for Origin to
recommission the TAWN LPG plant. The plant is now fully certified and
NZEC's raw natural gas will be processed at the Waihapa Production
Station once artificial lift installation for the Copper Moki wells
is complete. The Waihapa Production Station requires sufficient gas
to be fully operational. Arrangements are being finalized with
various third parties to provide continuous supply to the plant, at
which point NZEC can commence sales of its natural gas and liquid
petroleum gas. 
Taranaki Block Offer 
NZEC has lodged bids for new exploration properties as part of the
annual New Zealand Block Offer. The properties were chosen based on a
prospectivity review using NZEC's 3D seismic database and synergies
with NZEC's existing properties and the Waihapa Production Station.
The blocks will be awarded in December following a review of the bids
by New Zealand Petroleum & Minerals. 
On behalf of the Board of Directors 
Bruce McIntyre, Executive 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 2.25 million acres (including pending permits) 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 e
xploration 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 "objective of", "expect", "expected",
"expects", "progressing toward", "will", "will be", "should be",
"may", "estimated", "has identified", "believes", "to commence", 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 ability
of NZEC to progress through the conditions precedent to conclude the
Origin Agreement on schedule, or at all; the speculative nature of
exploration, appraisal and development of oil and natural gas
properties; changes in the cost of exploration and development of oil
and gas properties, 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; the
need to obtain government approval of work programs before exploring
or developing the TAWN Petroleum Mining Licenses; 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; 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.  
(1) Barrels of oil equivalent (boe) may be misleading, particularly
if used in isolation. A boe conversion ratio of 6 Mcf: 1bbl is based
on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the
wellhead. 
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. 
Contacts:
New Zealand Energy Corp.
Bruce McIntyre
Executive Director
North American toll-free: 1-855-630-8997 
New Zealand Energy Corp.
John Proust
Chief Executive Officer & Director
North American toll-free: 1-855-630-8997 
New Zealand Energy Corp.
Rhylin Bailie
Vice President Communications & Investor Relations
North American toll-free: 1-855-630-8997
info@newzealandenergy.com
www.newzealandenergy.com