The Company’s near-term objective is to increase production and cash flow while reducing exploration expenses. To achieve this objective, NZEC will prioritize low-cost, low-risk opportunities that are expected to bring near-term production and cash flow. NZEC’s objective is to organically build up working capital through internally-generated cash flow. Once the Company has established a strong production and cash flow base, the Company can again look to advancing higher-impact operations, such as drilling new wells.
The near-term Taranaki Basin work program includes:
- 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 (first well commenced production in April 2014)
- High volume lift installation on reactivated Tikorangi wells to increase oil production (installation of high volume lift on first well complete, optimization activities underway)
- Continuing to identify new reactivation and uphole completion opportunities, and advancing them to production (one additional reactivation complete, four additional uphole completions identified)
- Drilling one new well on the Alton permit to the Mt. Messenger formation
Longer-term, NZEC plans to:
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. NZEC is actively looking for a farm-in partner to fund exploration on its Alton and Eltham permits in the Taranaki Basin.
- Drill new wells on the TWN Licenses to the Tikorangi formation
- Drill new wells on the TWN Licenses to the Mt. Messenger formation
- Access deeper, higher-impact drill targets in the Moki, Tikorangi and Kapuni formations on the TWN Licenses, Alton Permit and Eltham Permit
- Advance opportunities in the East Coast Basin
On the East Coast, NZEC has relinquished two of its permits and retained the East Cape Permit, which offers both the largest acreage (more than 1 million onshore acres) and the longest exploration timeline (until December 2018) to explore and unlock the potential of the unconventional oil shales.
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