Please see the latest form 51-101F1 reserves report filed on the System for Electronic Document Analysis and Retrieval (SEDAR) for the resource potential of the East Coast Basin permits
The North Island’s East Coast Basin is an almost completely unexplored region with significant resource potential in sand and shale targets. With 300 known oil or natural gas seeps, the region has intrigued explorers for more than a century. About 50 wells have been drilled in the East Coast Basin over the decades and many logged oil or gas, but none yielded a commercial discovery. Previous exploratory drilling targeted structural highs, a traditional approach in conventional oil and natural gas exploration. Exploration activity in the region is accelerating. Current exploration is targeting a mix of stratigraphic/structural traps in the conventional reservoirs, using modern seismic to identify the target, and unconventional opportunities in shale formations that are believed to be the source rocks for the basin’s entire hydrocarbon system.
NZEC is among a small number of early entrants to the East Coast Basin and currently holds a 100% interest in the East Cape permit, which covers more than 1,048,406 onshore acres. NZEC previously held additional permits in the area, on which the Company carried out 2D seismic studies and drilled three stratigraphic wells. In June 2014 NZEC made the decision to relinquish the other permits and retain its East Cape permit, which has the largest acreage and also the longest exploration period. The initial exploration term for the East Cape permit gives NZEC until December 2018 to undertake exploration activities and unlock the potential of the unconventional oil shales.
The technical studies and exploration work completed on NZEC's other permits have given the Company great insight into the Waipawa Black Shale, information that will guide the Company's exploration strategy on the East Cape permit. For example, one of the stratigraphic wells that NZEC drilled in 2012 identified a Waipawa horizon that the Company’s geology team believes may extend northward into the East Cape permit. In addition, NZEC’s community engagement activities have allowed the Company to build strong relationships with regulators, landowners and iwi communities in the East Coast Basin.