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:
- Recommencing production from the Waitapu-2 well (Eltham Permit) following installation of artificial lift
- Uphole recompletion in the Mt. Messenger formation in two existing wells, drilled by a previous operator to the Tikorangi formation
- High volume lift installation on six Tikorangi wells that are currently producing oil
- Drilling two new wells to the Tikorangi formation
- Drilling one new well on the Alton permit to the Mt. Messenger formation
- Drilling three new wells on the TWN Licenses to the Mt. Messenger formation
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.
On the East Coast, NZEC plans to drill one exploration well in Q2-2014 on the Castlepoint Permit, and will continue with technical studies and seismic collection on its East Coast permits.
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