New Zealand Energy Corp. ("NZEC") provided an operational update on production and exploration activities on its 100%-owned Eltham Permit in the Taranaki Basin of New Zealand's North Island.
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.
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.
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.
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