NZEC acquired a 100% working interest in the Eltham Permit in December 2010, from the previous permit holder. In August 2011 NZEC drilled the Copper Moki-1 well at the north end of the Eltham Permit. The well intersected nearly 25 metres of net pay with excellent porosity in the Urenui and Mount Messenger formations with initial test rates of 1,100 barrels of oil per day, making it one of the better drilled into the Mt. Messenger formation. This early result confirmed the immediate opportunities on NZEC’s permits in the Taranaki Basin and transitioned NZEC from an exploration company to an oil and gas producer, with continuous production from Copper Moki-1 since December 2011.
Following the success of its Copper Moki-1 well, NZEC made four more oil discoveries in the Mt. Messenger formation. Copper Moki-2 achieved continuous production in April 2012 followed by Copper Moki-3 in July 2012 and Waitapu-2 in December 2012. The Copper Moki wells are producing, sweet, high-quality 41 degree API oil that is sold at a premium to the Brent reference price.
In July 2014 NZEC was granted the Copper Moki Mining Permit. The mining permit was carved out of the Eltham Permit to encompass the Company's four producing wells. The Copper Moki Mining Permit covers 943.7 acres and gives NZEC the right to produce oil and natural gas from the Moki, Mt. Messenger and Urenui formations for a period of eight years, with the option to extend the permit.
The remaining acreage on the Eltham Permit totals 46,444.2 acres, of which approximately 40,389 acres is onshore.
NZEC has identified strong potential on the Eltham Permit with numerous onshore and offshore structural and stratigraphic leads. NZEC's exploration strategy is to use its large database of 2D and 3D seismic to prioritize prospects with well-defined lower-risk Mount Messenger target providing multi-zone potential from the Urenui, Mount Messenger, Moki and Kapuni formations. All are fine-grained turbidite sandstone reservoirs with high porosity in the 20% range and conventional permeability. The Eltham Permit area has remained unexplored because previous-generation seismic could only identify very large, conventional prospects such as structural features. Modern seismic reprocessing and interpretation can image combined stratigraphic-structural features, as well as features of comparatively smaller size, of which there are many on the Eltham Permit. In Q2-2012 NZEC shot 100 km2 of 3D seismic across the Eltham and Alton permits. Interpretation of the seismic data revealed large exploration targets in the deeper Tikorangi and Kapuni formations that NZEC will evaluate, with additional targets in the Moki, Mt. Messenger and Urenui formations that will be prioritized in the context of NZEC's exploration program.
Approximately 6,055 acres of the Eltham Permit area lies offshore. Being relatively close to land, much of this area could be drilled directionally from onshore. NZEC has several leads on the offshore permit area, all of which lie on-strike with existing onshore and offshore producing pools. Additional marine seismic is planned to refine the drilling locations.