The Company’s near-term objective is to increase production and cash flow while reducing exploration expenses. To achieve this objective, NZEC is going to focus on commercial opportunities in the TWN Licenses, where the company can reactivate and recomplete existing wells to quickly increase oil production, at minimal cost. The Company also plans to drill new wells on both the TWN Licenses and the Alton Permit in 2014, to access oil resources in the Mt. Messenger and Tikorangi formations.
The Taranaki Basin work program for 2014 includes:
NZEC anticipates that successful completion of its Taranaki Basin work program will increase production to 2,300 boe/d by the end of 2014. Development and operating costs are to be funded initially by existing working capital and cash flows from production. In order to carry out all of the planned development activities, the Company is considering a number of options to increase its financial capacity, including additional joint arrangements, commercial arrangements, or other financing alternatives.
- Recommencing production from the Waitapu-2 well (Eltham Permit) following installation of artificial lift (complete)
- Uphole recompletion in the Mt. Messenger formation in existing wells, drilled by a previous operator to the Tikorangi formation (one well expected to commence production in April 2014)
- High volume lift installation on reactivated Tikorangi wells to increase oil production (installation of high volume lift on one well underway, production increase expected in April 2014)
- Continuing to identifying new reactivation and uphole completion opportunities, and advancing them to production (one additional reactivation complete, four additional uphole completions identified)
- Drilling new wells to the Tikorangi formation
- Drilling one new well on the Alton permit to the Mt. Messenger formation
- Drilling new wells on the TWN Licenses to the Mt. Messenger formation
On the East Coast, NZEC plans to drill one exploration well in 2014 on both the Castlepoint and Wairoa permits, and will continue with technical studies and seismic collection on its East Coast permits. NZEC is actively looking for a farm-in partner to fund exploration on its East Coast properties.
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