Quick Download - Taranaki Basin Fact Sheet
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 Taranaki Basin permits.
The Taranaki Basin offers an excellent opportunity to add substantial reserves and production in an environment of relatively low technical risks with established oil and natural gas infrastructure. NZEC holds and is operator on two large permits, Eltham (100%) and Alton (65%), and in October 2013 acquired a 50% interest and became operator of a full-cycle production station and an additional 23,049 acres across three Petroleum Mining Licenses ("TWN Licenses"), in a 50/50 joint arrangement with L&M Energy. All of NZEC's Taranaki Basin permits are on trend with the main production fairway and directly offset known production and reserves.
The Company’s near-term objective is to increase production and cash flow while reducing corporate expenses. To achieve this objective, NZEC is focused on production and exploration opportunities on its petroleum mining licenses. The Tariki, Waihapa and Ngaere petroleum licenses (collectively the "TWN Licenses") have a history of production, with 27 wells drilled by previous operators and more than 23 million barrels of oil produced historically from the Tikorangi formation. NZEC's review of seismic and well log data, which was corroborated independently by Deloitte LLP, identified remaining oil reserves that could be accessed from existing wells. Immediately upon closing the acquisition, NZEC reactivated oil production in six wells using an existing gas lift system. NZEC continues to identify additional production opportunities from existing wells and had advanced nine wells on the TWN Licenses to production by the end of Q2-2014. NZEC is also advancing a number of new commercial opportunities to use the Waihapa Production Station to its full potential and maximize facility revenues, while ensuring that NZEC’s gas and associated natural gas liquids production can be efficiently delivered to market.
Next steps on the TWN Licenses include installing high volume pumps on producing wells to increase daily production, and re-entering a number of existing wells to recomplete in the shallower Mt. Messenger formation. Recompletion of these wells should be significantly less expensive and faster than drilling new wells, and successful discoveries could be tied in to the Waihapa Production Station using existing oil and gas gathering pipelines. The Company also plans to drill a Mt. Messenger well on the Alton Permit in 2015, and expects to drill new Tikorangi and Mt. Messenger targets on the TWN Licenses in future exploration programs, prioritizing targets that can be accessed from existing drill pads with surface infrastructure.
The Taranaki is New Zealand’s sole oil and natural gas producing basin, accounting for 100% of the country’s current volumes of approximately 130,000 boe/day (55,000 barrels/day of crude oil and 460 mmcf/day of natural gas). The Taranaki Basin has been producing since 1934 when the first well came on-stream near New Plymouth. Average per-well productivity of approximately 325 boe/d in the Taranaki Basin is many times the North American average. NZEC’s permits are surrounded by oil discoveries to the north, south and west, with multiple pools collectively producing approximately 18,000 boe/d. This region offers immense opportunities for further exploration and development. There have been less than 500 wells drilled since 1950, virtually all of which relied on older technology (vertical wells completed without hydraulic fracturing) and conventional exploration ideas (sandstone reservoirs with structural traps). Until recently, substantial prospective lands remained unallocated and unexplored.
Geologically, the Taranaki Basin’s sediments extend from shallow burial at approximately 200 metres all the way to the deep basement at more than 6,000 metres. Hydrocarbon source rocks are believed to be deeply buried Paleocene and Cretaceous coaly rocks and shales. Drilling targets are primarily sandstones with some carbonates, with four horizons dominating to date: the Kapuni Group, which can be as deep as 4,000 metres and accounts for the majority of current basin production, and the generally shallower Moki, Mount Messenger and Urenui at depths of 1,000 to 3,000 metres.
NZEC sees the Taranaki Basin as an excellent opportunity both to drill unexploited prospects in known reservoir types and to maximize per-well results through the application of modern technology. This includes using modern seismic reprocessing and interpretation to identify the stratigraphic-structural traps that were overlooked in the past.