New Zealand Energy Provides Update on Development Program for Taranaki Assets

New Zealand Energy Provides Update on Development Program for Taranaki Assets 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/06/13 -- New
Zealand Energy Corp. (TSX VENTURE:NZ)(OTCQX:NZERF) ("NZEC" or the
"Company") is pleased to provide an update regarding its plans to
develop its oil and gas assets in the Taranaki Basin of New Zealand's
North Island. These include plans for the Tariki, Waihapa and Ngaere
petroleum mining licenses (the TWN Licenses"), the Waihapa Production
Station and associated pipelines and infrastructure (the "TWN
Assets"). The acquisition of the TWN Licenses and the TWN Assets from
Origin Energy Resources NZ (TAWN) Ltd. ("Origin") is subject to the
completion of certain conditions precedent described in NZEC's June
17, 2013 news release. NZEC has created an updated corporate
presentation that provides additional details and can be viewed and
downloaded on the Company's website at www.newzealandenergy.com. 
Highlights 


 
--  Completion of independent study into Mt. Messenger discoveries provides
    valuable insight for future exploitation strategy 
--  TWN acquisition closing proceeding 
--  Extensive post TWN acquisition work program comprising reactivation and
    re-completion of existing wells in addition to up to eight new wells
    including four targeting deeper high impact targets. 
--  Forecast production of 2,300 barrels oil equivalent per day(1) ("boe/d")
    exit 2014 (net to NZEC, 81% oil)(2) 
--  Forecast cash flow from operations of $26.1 million from end Q3 2013
    closing of the TWN acquisition to exit 2014(2)

 
Development Program and Forecasts for Taranaki Assets 
Completing the acquisition of assets from Origin Energy Resources NZ
(TAWN) Ltd. ("Origin"), as updated on June 17, 2013, will be
transformative for NZEC, resulting in a fully integrated
upstream/midstream company with the potential for cash flow,
infrastructure and inventory to support long-term growth. On July 30,
2013, NZEC announced a binding agreement with L&M Energy Limited
("L&M") whereby L&M will pay NZEC C$18.25 million to form a 50/50
joint venture ("TWN Joint Venture") to explore, develop and operate
the TWN Licenses and the TWN Assets. The parties intend to finalize
the definitive agreements shortly with the objective of closing the
transaction contemporaneously with closing of the acquisition of
assets from Origin (the "TWN Assets Acquisition"). Following closing,
NZEC (through its subsidiary companies) will become the operator of
the TWN Licenses and the Waihapa Production Station. Decisions
regarding exploration, development and operations of the TWN Assets
will be made by management committees with equal representation from
both NZEC and L&M. 
Owning 50% of the TWN Assets will also allow NZEC to optimize
development of its existing permits. The gas supply that NZEC has
identified to reactivate gas lift and production on existing
Tikorangi wells on the TWN Licenses will provide the blending gas
required to deliver NZEC's Copper Moki gas to market, bringing
additional cash flow to NZEC from the Copper Moki wells. The Company
also plans to build a pipeline to connect the Waitapu-1 well to the
Copper Moki gas pipeline, tying Waitapu production into the Waihapa
Production Station. As NZEC continues to explore the Eltham and Alton
permits, the Company will focus on drill targets that are close to
the Waihapa Production Station and associated pipelines, allowing for
rapid and cost effective tie-in of both oil and gas production. 
NZEC has prepared a detailed financial and production model outlining
its exploration and development program for its Taranaki assets that
has allowed the Company to forecast the impact of those activities on
its production and cash flow. NZEC's activities planned to the end of
2014 in the Taranaki Basin are outlined in the table below: 


 
---------------------------------------------------------------------------
                                                   FORECAST IMPACT(4)      
PLANNED POST ACQUISITION WORK PROGRAM(3)              (Net to NZEC)        
---------------------------------------------------------------------------
                                                         Production impact 
Balance 2013 and 2014                    Capital         (Exit 2014)       
---------------------------------------------------------------------------
Existing Tikorangi well reactivations    $2.1 million    Included in 2014  
- Reactivate six Tikorangi wells with                    production below  
  gas lift
- High volume lift installation on two
  initial wells                                                         
---------------------------------------------------------------------------
Mt. Messenger development                $5.2 million    Included in 2014  
- Waitapu artificial lift and tie-in                      production below  
- Two Mt. Messenger uphole completions
  in existing wells
- Horoi exploration well (including                                  
  surface infrastructure)                                                  
---------------------------------------------------------------------------
2013 Total                               $7.3 million                      
(to be funded initially by existing
 working capital and cash flow from
 production)                                                          
---------------------------------------------------------------------------
2014                                                                       
---------------------------------------------------------------------------
Existing Tikorangi Well Reactivations    $8.4 million    780 bbl/d         
- Increase water handling capacity
- High volume lift installation on four                                   
  remaining wells                                                          
---------------------------------------------------------------------------
New Tikorangi wells                      $7.9 million    490 bbl/d         
- Drill two new Tikorangi wells                                            
---------------------------------------------------------------------------
Mt. Messenger development                $6.1 million    540 bbl/d         
- Three new Mt. Messenger wells
  (including surface infrastructure)                                     
---------------------------------------------------------------------------
Kapuni development (cost to be funded    ---             304 boe/d         
                    by new JV partner)
- Two Kapuni wells                                          
---------------------------------------------------------------------------
Seismic acquisition, G&G studies and     $2.0 million    ---               
 Other                                                                     
---------------------------------------------------------------------------
2014 Total                               $24.4 million   Exit 2,300 boe/d  
                                                         (including        
                                                         production from   
                                                         existing wells)   
---------------------------------------------------------------------------
(3) See Assumptions and Post Acquisition Work Program in NZEC's updated    
    corporate presentation on our website for details.                    
(4) Forecast assumes Mid case scenario, appropriate working interest and  
    risking applied. See Assumptions and Post Acquisition Work Program in  
    NZEC's updated corporate presentation on our website for details.      

 
Understanding the Mt. Messenger Formation 
NZEC has drilled four successful wells drilled to date with a
cumulative total production of 257,088 bbls to end June 2013. Initial
production rates and declines have varied and these results are
consistent with Mt. Messenger experience on adjacent permits. 
The Company engaged RPS Group PLC a world leader in well evaluation,
to complete an independent reservoir study to better reservoir
characteristics and declines using data from Copper Moki, Waitapu and
other Mt. Messenger wells in the region. The RPS study concluded that
declines are not related to wax buildup or mechanical issues. NZEC
has used the study results to prepare composite type curves for Mt.
Messenger production and recent proprietary merged 3D seismic in
order to enhance the Company's Mt. Messenger exploitation strategy,
which includes: 


 
--  Choosing optimally sized targets based in interpretation of the merged
    3D dataset 
--  Reducing costs by drilling multiple wells from each pad and, 
--  Prioritization of targets close to the Waihapa production Station to
    expedite tie-in

 
The Horoi 1 well will target the Mt. Messenger formation in the Alton
permit later this year and further Mt. Messenger wells are planned in
the 2014 work program. 
Closing the TWN acquisition  
NZEC continues to make steady progress in closing the TWN acquisition
as planned. L&M are contributing $18.25 to the acquisition price
which reduces NZEC's total current and future funding obligations and
also reduces NZEC's net general and administrative costs. 
Immediately on closing the TWN acquisition the Company will increase
its 2P Reserves by an additional 1.07 million boe with an estimated
before tax NPV (10% discount rate) of $31.4 million. 
"Our team has worked hard to build this development program, L&M's
investment is a vote of confidence in the team and in our ability to
deliver on the program and build value. Will see immediate catalysts,
look forward to closing the deal and forging ahead," said John
Proust, Chief Executive Officer and Director of NZEC. 
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 2.25 million acres (including permits and acquisitions
pending) 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. 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.  
Forward-looking Information 
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 any of the words "will", "intend", "objective", "become",
"transforming", "potential", "continuing", "pursue", "subject to",
"look forward", "unlocking" 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. 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. This document contains forward-looking
statements and assumptions pertaining to the following: business
strategy, strength and focus; the granting of regulatory approvals;
the timing for receipt of regulatory approvals; geological and
engineering estimates relating to the resource potential of the
properties; the estimated quantity and quality of the Company's oil
and natural gas resources; supply and demand for oil and natural gas
and the Company's ability to market crude oil, natural gas and;
expectations regarding the ability to raise capital and to
continually add to reserves and resources through acquisitions and
development; the Company's ability to obtain qualified staff and
equipment in a timely and cost-efficient manner; the ability of the
Company to obtain the necessary approvals and secure the necessary
financing to conclude the acquisition of assets from Origin on
schedule, or at all; 
the ability of the Company to obtain the necessary approvals to
conclude the TWN Joint Venture on schedule, or at all; the ability of
the Company's subsidiaries to obtain mining permits and access rights
in respect of land and resource and environmental consents; the
recoverability of the Company's crude oil, natural gas reserves and
resources; and future capital expenditures to be made by the Company.
Actual results could differ materially from those anticipated in
these forward-looking statements as a result of the risk factors set
forth below and elsewhere in the document, such as 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; 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. Readers
are cautioned that the foregoing list of factors is not exhaustive.
Statements relating to "reserves and resources" are deemed to be
forward-looking statements, as they involve the implied assessment,
based on certain estimates and assumptions, that the resources
described can be profitably prod
uced in the future. 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. 
Cautionary Note Regarding Reserve and Resource Estimates 
The oil and gas reserve and resource calculations and net present
value projections were estimated in accordance with the Canadian Oil
and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101
("NI 51-101"). The term barrels of oil equivalent ("boe") may be
misleading, particularly if used in isolation. A boe conversion ratio
of six Mcf: one bbl was used by NZEC. This conversion ratio is based
on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the
wellhead. Reserves are estimated remaining quantities of oil and
natural gas and related substances anticipated to be recoverable from
known accumulations, as of a given date, based on: the analysis of
drilling, geological, geophysical, and engineering data; the use of
established technology; and specified economic conditions, which are
generally accepted as being reasonable. Reserves are classified
according to the degree of certainty associated with the estimates.
Proved Reserves are those reserves that can be estimated with a high
degree of certainty to be recoverable. It is likely that the actual
remaining quantities recovered will exceed the estimated proved
reserves. Probable Reserves are those additional reserves that are
less certain to be recovered than proved reserves. It is equally
likely that the actual remaining quantities recovered will be greater
or less than the sum of the estimated proved plus probable reserves.
Revenue projections presented are based in part on forecasts of
market prices, current exchange rates, inflation, market demand and
government policy which are subject to uncertainties and may in
future differ materially from the forecasts above. Present values of
future net revenues do not necessarily represent the fair market
value of the reserves evaluated. Information concerning reserves may
also be deemed to be forward looking as estimates imply that the
reserves described can be profitably produced in the future. These
statements are based on current expectations that involve a number of
risks and uncertainties, which could cause the actual results to
differ from those anticipated. Contingent resources are those
quantities of oil and gas estimated on a given date to be potentially
recoverable from known accumulations using established technology or
technology under development, but which are not currently considered
to be commercially recoverable due to one or more contingencies.
Contingencies may include factors such as economic, legal,
environmental, political and regulatory matters, or a lack of
markets. Prospective resources are those quantities of oil and gas
estimated on a given date to be potentially recoverable from
undiscovered accumulations. The resources reported are estimates only
and there is no certainty that any portion of the reported resources
will be discovered and that, if discovered, it will be economically
viable or technically feasible to produce. 
(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. 
(2) Mid-case forecasts based on NZEC's development program and
resulting financial and production model. See Forward-looking
Statement and Assumptions and Post Acquisition Work Program in NZEC's
updated corporate presentation on our website. Please contact the
Company if you are unable to access its website and would like to
receive a copy of the presentation. 
Contacts:
New Zealand Energy Corp.
John Proust
Chief Executive Officer & Director
North American toll-free: 1-855-630-8997 
New Zealand Energy Corp.
Bruce McIntyre
Executive 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 
New Zealand Energy Corp.
Chris Bush
New Zealand Country Manager
New Zealand: 64-6-757-4470
info@newzealandenergy.com
www.newzealandenergy.com