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Studied: Power Engineering, Exploration Technology, Worked Upstream, Midstream, Downstream in Oil and Gas, Pipelines, Drilling, Refineries. I'm Interested in very big picture, game changers that come from sizeable economic deposits of Oil, Gas, Gold, Silver, Uranium, Specialty Metals used in... More
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  • New Zealand Energy Is Poised For Growth In Q4 26 comments
    Oct 15, 2013 10:16 PM | about stocks: TAOIF, NZERF, MESNF, EWPMF, VELXF

    New Zealand Energy ("NZEC") is an oil exploration company with its financial headquarters in Vancouver, Canada, and Operations headquarters in New Zealand.

    This week Oct 15, 2013, New Zealand Energy (TMX:NZ, OTCBB:NZERF) is in its final stages of acquiring a Strategic Asset called "Waihapa", North Island, New Zealand. This transaction started negotiations in May 2012 and agreement was reached this fall.

    (click to enlarge)

    **UPDATE OCT 18, 2013 - GOVERNMENT APPROVES DEAL FOR NZ**

    **THE $33.5 MM DEAL WILL BE TRANSACTED OCT 29, 2013**

    Its a done deal origin divested of Waihapa today oct 29, 2013

    ***COMPETITOR TAG OIL TO RAISE $25MM for PLAY on EAST COAST BASIN of New Zealand NOV 13, 2013*** [ Timing of any news release on the Ngapaeruru-1 well could bode well for all other Exploration Permit holders in the same basin, so the timing of this share transaction and new release is very interesting indeed]

    Listen to Investor Presentation: Oct 18, 2013

    Read Press Release as .pdf

    View Presentation as .pdf

    (click to listen to a short clip of the company update)

    Terms of the original deal have changed, Origin Energy (the "Seller") has asked for a 9% royalty on all future hydrocarbon production (up from the 5% original percentage).

    However the price tag was reduced from $42MM to $33.5 MM indicating the "seller" Origin Energy would prefer a long-term royalty over short-term cash up front.

    New Zealand Energy Ltd. also negotiated a 'buy back' of up to 4% of the existing 9% royalty at any time, by paying Origin $4.25 million per percentage point, to encourage a fair risk:reward deal for both parties.

    THE WAIHAPA DEAL OCT 29, 2013

    Waihapa is in the middle of an existing petroleum producing fairway called the 'Taranaki Basin'. It has been a very rewarding oil production basin for decades for technically experienced drilling and production companies.

    The $33.5 MM Deal includes:

    1) Three Petroleum Mining Licenses of 23,049 acres of permits in the main production fairway of the Taranaki Basin. ("TAWN Licenses")

    2)The Waihapa Production Station, a high-capacity (45 mmcf/day, 25,000 bbl/day) full-cycle production oil facility.

    3) An extensive network of gathering and sales pipelines that connect their oilfield to existing markets.

    (DEAL Overview)

    The Property called "Waihapa" was previously sold by SWIFT Energy NZ (of Oklahoma) to Origin Energy (TAWN) NZ. Now after many millions of upgrades the Government of New Zealand is set to approve this transfer between parties as early as this week.

    New Zealand Energy Ltd. has Proved and Probable Reserves estimated at 1,852,700 barrels of oil, 1.45 billion cubic feet of natural gas and 50,700 barrels of natural gas liquids,

    This equals 2,144,700 barrels of oil equivalent ("boe"), estimated by Deloitte to have a before tax net present value ("NPV") of $62.9 million (assuming a 10% discount )

    As of today, NZEC has a market cap of $45,738,414 suggesting this play has significant upside if management can get this land deal done and move forward with its E & P business plan.

    The 2P (Proven + Probable) in the ground are said to be $31.4 million that come with Waihapa! So the acquire 1.07MM BOE of Oil in the ground instantly on Oct. 29.

    The "SELLER" of Waihapa is actually Origin Energy (Australia) who operates producing assets in New Zealand called ("TAWN") or Origin Energy Resources NZ (TAWN) Limited and is selling their stake in 3 drilling licenses and exploration permits for $33.5MM in cash plus a 9% royalty.

    Origin also owns just over 50% of Contact Energy an energy generator and retailer, providing around 25% of New Zealands electricity, natural gas and 44% of LPG Market to around 566,000 customers nationwide. Origin stands to benefit from future liquids production through the TAWN Licenses and Waihapa production station as it is connected directly to Contact Energy for electricity generation from Natural Gas.

    Contact is one of the country's largest NZX listed companies and one of New Zealand's most widely held stocks with around 73,000 shareholders. In October 2004, Origin Energy became Contact's majority shareholder at 53.09%. So Origin earns 9% on the gas that flows through the below cycle and Contact earns from selling it to make Power. The 'grey' portion of the circle below is a pipeline from 'Contact' to 'Stratford', it is already built and installed in ground, but awaiting final tests, inspection and approval.

    (The Acquisition)

    (The Waihapa Facility being Acquired by NZEC from Origin Energy)

    Upper left: Gas Processing from Waihapa wells, (Kapuni potential)

    Lower Left: Water handling

    Lower Right: LNG, Butane, Propane bullets

    Upper Right: Oil handling

    BELOW WAIHAPA SHALLOW OIL FORMATIONS: Mt Messenger

    (Production so far...)

    BELOW WAIHAPA EXIST DEEP OIL FORMATIONS: Tikorangi

    (Tikorangi at 3000m depth is under more pressure, and flow rate is higher which can be lucrative during initial production rates.)

    (By Q4 2014 NZ hopes to achieve 2300 BOE/day)

    BELOW WAIHAPA EXIST DEEP NGL or GAS FORMATIONS: Kapuni

    (Kapuni layer is a Gas formation)

    So Waihapa, brings instant cash flow into the company. Instant ability to sell Natural gas and NGL as well as Oil via pipelines. An instant customer (Contact Energy) to buy the Gas, and instant 3rd party partnerships with Origin energy, making this very strategic for all involved. Very experienced people, doing what they know how to do.

    In 2006, an exploration well drilled by SWIFT Energy on the land in the photo above located a highly prolific oil discovery in the Taranaki Basin deep in the source rock known as Tikorangi, that rock layer set off a land and exploration permit rush by many new oil companies hoping to get in on the above average oil production that is upto 10X better than elsewhere on the island and is chemically attractive to refineries. Perhaps challenging to drill, tricky to complete, but is well worth the final reward in the end financially.

    Around 27 Wells have been drilled on this land since its inception, there are around 6 wells drilled and completed included in the Waihapa permits that are ready to turn-on so to speak, all some wells need is a "gas lift" to energize the oil formations and get them flowing to surface again. At $400K per well, this work will start immediately, in NOVEMBER 2013.

    Cash Flow will start immediately into this Debt Free company with just over 121 MM shares, and that is music to investors ears.

    In summer 2013, L & M Energy Ltd. a private company in New Zealand agreed to pay New Zealand Energy Ltd. $18.25 MM for a 50% stake in the Waihapa land and facilities acquisition. This reduced the risk for "NZEC" and added cash to the treasury to help make the deal happen.

    The Management of L & M is well connected with New Zealand energy Regulators and the Government so they are very strategic partners to have 'in country' within New Zealand and make an excellent fit going forward as they have deep pockets to carry things forward.

    Sept 2013 NZEC announced a Private Placement to raise the last funding needed to execute a post acquisition drilling program and finalize the purchase from Origin Energy.

    (NZEC and L&M are 50%/50% on this money maker)

    So here we are today, a real "Oil Play" as geologists call it.

    A QUICK PRIMER ON OIL EXPLORATION:

    There are 5 key attributes that must be present to pitch oil investors on investing in the typical "Play".

    These 5 attributes are:

    1. Source Rock - When organic-rich rock such oil shale subjected to high pressure and temperature over an extended period of time, hydrocarbons form.

    (Sample image not from NZ)

    In the Taranaki the NGL or Gas Source rock is Kapuni, and the Oil is Tikorangi, Mount Messenger, and Moki, or Copper Moki. The shallow wells will cost around $400K for Uphole Completions and the deeper wells will be more costly and technically challenging but offer huge rewards in exchange for taking added risk and costs.

    (click to enlarge)

    In the East Coast Basin the Source Rock is Whangai, and Waipawa

    2. Migration - hydrocarbons are expelled from source rock

    (click to enlarge)

    3. Trap - The hydrocarbons are buoyant and have to be trapped within a structural (e.g. Anticline, fault block) or stratigraphic trap.

    Above: Anticline Trap in RED

    Below :Stratigraphic traps accumulate oil due to changes of rock character rather than faulting or folding of the rock.

    (click to enlarge)

    4. Seal or cap rock - The hydrocarbon trap has to be covered by an impermeable rock known as a seal or cap-rock in order to prevent hydrocarbons escaping to the surface,

    Teal Area: Seals Oil in Place

    5.Reservoir - The hydrocarbons are contained in a reservoir rock. This is commonly a porous sandstone or limestone. See the `Consolidated rocks`below.

    Rock Sequences are dates and organized by GEOLOGIC Time.

    Names are unique to Time Period and Sequence.

    The search for Oil Reservoir Rocks w/ POROSITY/PERMEABILITY

    The TARANAKI BASIN has all of the above key attributes plus an added bonus of containing high quality oil with an API rating that pays upto $20/Barrel above spot oil prices.

    (List of risks from a geological perspective

    I will leave the EAST COAST BASIN opportunity for another day as it is an entire blog in itself but it may heat up very soon! If you are curious read more about it here.

    Tag Oil's 1st Well Here and more on east coast here

    *Disclaimer slide data has not been verified* ROI is not guaranteed*

    (First ever well by TAG is yet to release results Ngapaeruru-1)

    Oil collects in the pores within the rocks and open fractures within non-porous rocks can store substantial oil.

    Due a unique volcano (Mt. Taranaki) on the north island, there are large fractures in the oil bearing rocks for oil to collect in. Rocks like the Tikorangi are folded over and basins are under alot of pressure, creating excellent oil traps and drilling targets which can produce very decent numbers like below.

    This Oil shows up as a "Bright Spot" (Fig 2.) on seismic. As sound is shot into the ground and the wave that reflects back to surface is at varied angles and oil bearing rock creates an amplitude or signature indicating oil.

    Part of the Waihapa deal includes 532 km of very expensive 3D Seismic data that has been re-processed using very advanced computers and new interpretation techniques called PSTM or Post-Stack Time Migration.

    This PSTM process cleans up any bad data from seismic and really improves accuracy so that companies avoid costly dry holes. Read slide 30-31 here and notice the cleaner image on slide 31 versus the blurry image on slide 30. The better the image, the more accurate and exact the Mathematics when calculating exact drilling targets. This is Game Changing technology and cannot be understated. To an exploration department this data creates high probability 'plays'.

    (PSTM example of 3D Seismic Data)

    Remember the Trap from above (red area below).

    Fig 1. Seismic Waves

    Fig 2. Bright Spot indicating oil or gas

    If the targeted rock layer the above attributes and has sufficient Porosity (to fill with Oil) and Permeability (to flow Oil) then the reservoir is a top candidate for Drilling a future well.

    (click to enlarge)

    Unlike existing majors with reserve to draw upon in tough times, Junior oil companies need a sizeable land position to grow from as they grow through application of drilling pre-determined oil targets.

    Prior wells in WAIHAPA had phenomenal initial production (NYSE:IP) rates above 4000 bbls/day, then declined over months due to various conditions which engineers are trying to improve and solve with new technology.

    (Wells are very close to Production station for rapid tie-in to sales)

    "With more than 200,000 net acres in the Taranaki Basin and 2.1 million net acres in the East Coast Basin, including permits pending, NZEC holds the largest onshore exploration portfolio in the north island, from which to unlock the potential of New Zealand's petroleum resources" - New Zealand Energy.

    Notice the Thickness of the Whangai Shale below!

    NZ has the largest acreage of this basin over 2.1 Million Acres!.

    (click to enlarge)

    The thickness of the Shales in North Dakota are less thick than New Zealand's East Coast Basin shales which can be upto 600m. Thickness is used to calculate the Barrels in the ground (reserves) and future production and cash flow comes from these reserves.

    With more Drilling, will come MORE DATA between new wells, which helps further define these basins, meaning things can get better and better as more wells are drilled.

    Exactly what happened in North Dakota in 2006, things went from excellent to fantastic to unbelievable in 5 years time and it is still impressing scientists.

    (image not from NZ, sample of STRUCTURAL Data)

    (Many companies are betting on a repeat of North Dakota in East Coast Basin, NZ)

    (Early indications and reading between the lines on news releases its looks like the East Coast Basin is just full of Oil)

    Years of preparation from geo-technical and geophysical companies like Ian R Brown Associates Limited (which was acquired by NZEC) is needed to set-up a stellar opportunity like this one.

    The Management Team at NZEC is very seasoned an has pulled together the necessary expertise to translate this play quickly into an oil producing company with lots of future growth prospects. All they needed is Waihapa, and they are now in the game.

    Once the final stages of this financing and purchase of Waihapa are complete by month end this play shifts into high gear.

    Quick Company Financial History (Excluding drilling activity)

    April 2010 - Company founded as East Coast Energy Ventures Ltd. changed name to New Zealand Energy Ltd in December 2010.

    January 2011 - Private placement of 28 million shares at $0.25 per share raises $7.0 million.

    February 2011 - Private placement of 6.6 million shares at $0.75 per share raises net proceeds of $5.3 million.

    March 2011 - Acquire Ian R Brown Associates Limited in exchange for Shares of NZ, Ian R Brown Associates is a highly respected oil and gas consulting firm. IRBA's experienced technical team joins NZEC.

    August 3, 2011 - Initial public offering completed for net proceeds of $20 million ($21.9M with overallotment). Company begins trading on TSX Venture exchange under symbol NZ.

    March 2012 - NZEC announces $63.5 million bought deal financing to fund accelerated exploration program.

    May 2012 - NZEC enters into binding agreement with Origin Energy to acquire upstream and midstream assets in the Taranaki Basin, significantly increasing the Company's New Zealand assets from both an exploration and infrastructure standpoint.

    OCT 2013 - Strategic Acquisition with Origin Energy Resources NZ (TAWN) Limited, a wholly-owned subsidiary of Origin Energy Limited (ASX: ORG), to acquire strategic upstream and midstream assets in the Taranaki Basin.

    (Things should heat up for NZ the week of Oct 29, 2013)

    After the Acquisition: Accretive to Reserves, Production and Cash Flow

    Additional 1.07 million boe 2P reserves with estimated before tax NPV (10%) of $31.4 million ($13.84/boe acquisition cost)

    Forecast production of 2,300 boe/day exit 2014 (81% oil) 3

    Forecast cash flow from operations of $26.1 million from early Q4-2013 closing to exit 2014.

    (NZEC)

    Now the fun and excitement for shareholders is set to begin.

    I wish all investors success, and hope Q4 is the season for it.

    Interesting Side Note:

    Tag Oil Ltd. jumped 7.95% Oct 17 on low volume, which may mean Cardiff-3 well in the Taranaki Basin is close to Total Depth. If they see positive results and decide to complete the well, a news release could be expected soon with Initial Production numbers.

    (Oct 26,2013)

    (Tag Oil bought Orient Petroleum off ECA in 2009 to buy in to existing east coast basin exploration permits)

    Tag Oil also holds permits on the "East Coast Basin" and they have some farm-out agreements with other companies. Some smaller players have permits nearby Tag Oil and NZ like this company and will benefit by owning similar geology nearby.

    Endeavor Energy NZ (In canada its called Marauder Resources East Coast Inc.) is not drilling in the Taranaki, but does have a 50% interest near Tag Oil's east coast permit in the EAST COAST BASIN of new zealand.

    The Ngapaeruru-1 well is awaiting public release of initial results from drilling last April. MES popped 28.97% today Oct 17, 2013 on no news, indicating perhaps that the buying activity in TAG OIL prompted speculation in Marauder.

    (OCT 17th, 2013)

    (Permit 38156 covers around 30 km squared)

    (Sample Permit)

    In a way, all these companies compete with each other. Last week, a bit of a shuffle occured when a CFO left New Zealand Energy for Tag Oil. Origin Energy owns Contact Energy NZ which competes with Tag Oil in the sale of liquids for Power Generation. If he jumped ship because of "Good Feelings" on the Assets in the EAST COAST BASIN, then that move might make sense in the near future.

    However NZEC or New Zealand Energy has over 2 Million acres in the same Basin, so its a very interesting situation.

    There really are enough onshore and offshore opportunities for all players which will keep these Basins very exciting for many years to come.

    If the EAST COAST BASIN hits pay dirt, all existing ACRES and all PEP PERMITS held by all competitors will RISE in $ Value instantly, regardless of who makes the discovery.

    (November event possibilities)

    So a good day for TAG OIL in the EAST COAST BASIN or TARANAKI BASIN is still a good day for New Zealand Energy, and all other EXPLORATION PERMIT holders in these emerging Oil and Gas Basins.

    (As the plays develop expect lots of de-risking plays with Farm-outs and Farm-ins)

    New entrants to plays will pay $$$ to buy into existing PERMITS or DRILLING programs, and earn a % for dollars spent, work performed or both.

    Here is an example of East West Petroleum and their 30%-50% stake and interest in each TAG Oil well in the Taranaki Basin.

    (click to enlarge)

    (click to enlarge)

    (Other Partnerships on East Coast are XOP and MES)

    (XOP is planning 2 wells with MES as Operator)

    (First Exploration Well by Tag Oil was Drilled near Dannevirke)

    By 2014, expect a dozen or more companies to be going into the new zealand basins a little bit at a time using this partner farm-in method.

    ( EXPLORATION STOCK are 'Traded' and not always buy/hold types )

    One last thing, Exploration is dealing with "unknown unknowns", so anything good, bad, or ugly can and does happen.

    Know your tolerance for risk of loss, and gather good advice from others before you jump in.

    This is not investment advice, this is sharing information about attractive opportunities that have good prospects, however risk and loss of capital are always present in these type of plays.

    There are many other players moving in: Listed small and mid-cap players active in Taranaki include

    AWE (ASX:AWE),

    Beach Energy (ASX:BPT),

    Cue Energy (ASX:CUE),

    East West Petroleum (TSX-V:EW),

    Horizon Oil (ASX:HZN),

    Kea Petroleum (AIM:KEA),

    Loyz Energy (SGX:LOYZ),

    New Zealand Energy Corp (TSX-V:NZ),

    New Zealand Oil and Gas (NZX:NZO),

    Octanex (ASX:OXX),

    Pan Pacific Petroleum (ASX:PPP)

    TAG Oil (TSX:TAO )

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TAOIF, NZERF, MESNF, EWPMF, VELXF over the next 72 hours.

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Comments (26)
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  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » GOVERNMENT APPROVAL GRANTED!! OCT 18,2013

     

    http://bit.ly/H7ALpE
    18 Oct 2013, 07:14 AM Reply Like
  • JohnIntuitive
    , contributor
    Comments (59) | Send Message
     
    I really, really like your article - excellent pictures, graphs & just plain a nice technical view point.

     

    Excellent job!!!!!!!!!
    7 Nov 2013, 12:05 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » NOV 19 2013 NZERF is a BUY at these Prices!

     

    Price is down today on news of new Private Placement Shares coming available to trade on NOV 21. These kind of days don't come around too often, if you are believer in this play, management, and the geology, time is now to back the truck up and load up on inexpensive shares. A few weeks from now this kind of bargain may never exist again on this play if Kapuni is commercial on next door neighbours properties. Lots of events coming next few months.
    19 Nov 2013, 10:31 AM Reply Like
  • JohnIntuitive
    , contributor
    Comments (59) | Send Message
     
    Tullii,

     

    Thank you very much for posting Today - Nov. 19th, 2013. I was really freaking the hell out...I'm not a Newbie when it comes to investing in " Junior Exploration Resource companies - particularly Gold & Silver companies. But oil juniors - not so much. That's why I trully enjoy your articles...especially on Nzerf. I have all, I do mean ALL my money invested in this stock. I believe w/ all my heart & soul this company will do incredibly well. (I put 25 hours into researching this investment opportunity.) I did not even buy the stock until it bottomed...and came back up. I took a ginormous position @ .2567 & then again a few pennies later. Seeing the price closeout @ .2768 today is very very depressing & makes me wish I had sold half my position @ .45 cents.

     

    The only things that give me hope are the message boards, your articles, your latest comment & the fact that I talked to Rhellyn & she said all six wells are being turned on as we speak & a press release will be put out around Dec. 2 or 3rd hopefully.

     

    When they finally issue a press release on these six wells being turned on, I really hope you write another article, I look forward to reading it!
    The stocks I follow w/ enthusiastic zeal are Canadian Overseas Petroleum Limited, Czicf, Pglc, Zodiac exploration & Global Minerals. About 20 more also - but these I am going to buy as the price goes down a few more pennies.
    19 Nov 2013, 04:31 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » Thanks for your comment. It's true a concentrated position is what makes the best gains, but any investor should be cautious about placing 100% bets on anything they cannot afford to take a loss on.

     

    Example:

     

    20 Years ago I invested in a small company, it struck a huge gas pool in the San Joaquin Valley. It went from $.25 to $2 almost overnight it was totally leveraged to its stake in 2-3 exploration wells so it shot up like a rocket. It was so easy the first well I thought It was repeatable, i was over confident and I borrowed a years income and bet it all on the 3rd well, that well hit a very high pressure zone, caused the well to lose control and it blew out. The rig burned to the ground, the company was fined $15-20 million for damages, environmental fines and costs to replace the rig and solve the blow out. They went bust and I lost more than I had to lose, it was nobody's fault but my own, and I have never forgotten that lesson.

     

    I only share this story because as certain as things can look, these companies take risks with other peoples money who have "accredited investor" backgrounds which means they know the risk of loss and they invest anyways because they have enough wealth to stomach and adveristy that might arise. yes companies can hit the jackpot, they can also encounter the unexpected. so always be aware that the share price is only a fragment of the story, the complexities of well bores, extreme pressures, mechanical failure of machined parts, human error and a multitude of unknowns exist in this kind of business, so if you make gains early...take them off the table and put them back in your pocket no matter how tempting it is to stay all in. If you follow that discipline you will save yourself some pepto-bismol or rolls of tums.

     

    within 3-4 months you should be able to be All-Out with your original $ and be able to leave your gains behind for years to grow. To be invested,you should hold X% for 2-3 years and trade X% quarterly going into material events that move the stock up or down.

     

    If you catch a gain, hold onto it for a safe re-entry point like a new financing or negative share price day, you should be able to roll in and out of such juniors throughout the year and average down by using such techniques. The goal,should be to not have to worry about your position and to have played your funds in a way that you can sleep at night with what you have put on the table.

     

    NZERF will need a lot of 2014 to build their plans, I am confident they will succeed but 2013 taught me patience cannot be overstated. these things take time and skill to move forward and we all want immediate gratification but it takes years to build a decent company. I wish you every success, both trading and investing but you should view the two through different vantage points as they are not the same.
    22 Nov 2013, 03:51 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » East West Petroleum (EW) dropped 9 cents or 17% today 11/25/2013 which is perhaps due to a small community walk protest that took place over the weekend by the Iwi trustees. EW is the operator for Tag Oil in Taranaki. I do not think this matter is going to slow work for what permits are already in place, for licences already granted.

     

    i respect the TRUST that these folks represent, and the issue is likely more to do with the Q1 well TAG planned in 2014 called heat seeker which is a tad too close to a sacred mountain area called Egmont Park (a national park) of which the Maori are entrusted to care for through an unincorporated trust.

     

    At any rate, the discount of the operator is a short term opportunity and looking past these issues I think the matter will be resolved in due course and the s/p will return to normal in a matter of a week or two for EW. Tao was unaffected by the events and remains a bargain at around $3.50.
    26 Nov 2013, 12:09 AM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » NZ, just added more land to its east coast basin portfolio.

     

    http://bit.ly/1cQyObq

     

    THIS PERMIT is targeting shale in the EAST COAST BASIN.

     

    New Zealand Energy now holds the LARGEST ACREAGE of EXPLORATION PERMITS within the EAST COAST BASIN.
    29 Nov 2013, 07:11 AM Reply Like
  • jmale
    , contributor
    Comments (8) | Send Message
     
    Today's news are good. Do we have any idea when and if TAO's Cardiff could have an impact on New Zealand Energy?
    2 Dec 2013, 06:18 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » To reward the $25 Million investors they need to achieve results that would drive the share price higher than $4.40/share.
    This need to occur by Friday the 13, 2013. or 12/13/13.
    Strange things happen on 13/13 in history (look it up on wikipedia). Perhaps this date will follow the trend.

     

    http://bit.ly/1dT8DpO

     

    I would say Cardiff-3 would have a very positive impact on NZ.
    We will all know soon.
    5 Dec 2013, 05:06 PM Reply Like
  • jmale
    , contributor
    Comments (8) | Send Message
     
    Hi tullii,
    have You hidden by purpose the text "Q3 News Flow For New Zealand Energy Is Worth Attention"? Clicking on late comments for that one brings me since yesterday on Chidliak Diamonds. Is that meant to be so?
    cheers
    jukka
    14 Jan, 06:22 AM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » Hmmm wasn't aware of that. Likely a mistake on link.
    I will look into it thanks.
    14 Jan, 11:46 AM Reply Like
  • JohnIntuitive
    , contributor
    Comments (59) | Send Message
     
    The same thing is happening to me?
    14 Jan, 03:42 PM Reply Like
  • JohnIntuitive
    , contributor
    Comments (59) | Send Message
     
    I have been monitoring NZERF's bpd...it looks like their bpd will hit 400 -500 bpd by 02/03/2014.

     

    Then 700 bpd by 03/03/2014 ... its getting better & better!
    15 Jan, 04:18 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » Thanks John,

     

    With these first 6 wells, they are going to be fairly cautious and conservative, this is their bread and butter for some time to come.
    I ignore the share price, price is what most people look at, I understand that is where most people see VALUE, but PRICE is the easiest thing to see right now. The more difficult thing to see is the DISCREPANCY between the VALUE of what has been accomplished with not only the acquisition but the runway room for pure exploration and what is IN THE GROUND. The smart money isn't leaving or the share price would be in the teens, so the only people who left the past few weeks have no idea what the above sentence means. MONEY is made by understanding the discrepancy between VALUE and PRICE and buying ASSETS on sale to REALIZE the TRUE Value later. In this case later will be sooner than later. I think Waihapa will be better than expected but not until few more things get accomplished by Q2. Don't watch te share price every day, the value is already secured and in the ground...it's true value will grow sure and steady from this point forward. Alot of people lost money on paper in 2013 so they have lost faith. The facts that make this play what it is have not changed, we haven't got to the good part yet, but it's coming.
    16 Jan, 10:50 AM Reply Like
  • JohnIntuitive
    , contributor
    Comments (59) | Send Message
     
    I believe NZ has 5 - 6 million in their treasury right now, If the uphole completions (6 altogether) continue - each one putting out 300 bpd...150 net to NZ & they are able to get the (original 6 Ticorangi wells) equation right of oil/water & install the HVL electric pumps & get each one of those 6 wells producing more than 10 bpd (4 wells) , say 50-100 bpd . Then let's add it up, 900 bpd just from the 6 Mt. Messenger uphole completions (costing only$600,000/well).

     

    Then say 75 bpd from the remaining 4 wells each producing only 10/bpd right now plus we get an extra 50 bpd each from the initial 2 wells that are producing 200 bpd net to NZ. That's 600 bpd from the original 6 Ticorangi wells that NZ first turned on.

     

    Now add in the Copper Moki wells (3) 125 bpd total.

     

    •Waitapu-2 well expected to resume production in January
    add in 100 bpd net to NZ (This well is on the Eltham permit. It's 100% net to NZ)

     

    If you total all these barrels up...by June(more towards the end) you have 1,725 bpd . These are bare bones numbers, no hyping at all in just 5 - 6 months, NOW WE CAN START TO GET EXCITED!

     

    These numbers do not add in any new drilling like 2 new Ticorangi wells or the 3 new Mt. Messenger wells & the Horoi well.

     

    Nobody should even be remotely down!
    17 Jan, 04:20 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » Great work John, thanks for sharing.

     

    This size company needs to be glanced at Quarter to Quarter now. Lots of followers watch share price too closely day to day, the geology doesn't change at all day to day,the operations takes time to tweak and the best days are still ahead for sure. It's shaping up I think we have to give the management time to do what they can do, and by summer we will have numbers similar to what you calculated above. Stay positive, it will improve inch by inch, month by month and quarter by quarter.
    17 Jan, 09:14 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » New Zealand Energy Production and Operational Update

     

    February 04, 2014
    VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 4, 2014) -

     

    Editors note: There is a photo associated with this release.

     

    New Zealand Energy Corp. (TSX VENTURE:NZ)(OTCQX:NZERF) is currently producing light, high-quality oil from nine wells in the Taranaki Basin of New Zealand's North Island, with five further wells expected to add to production over the next four months. NZEC's Waitapu-2 well on its 100%-owned Eltham Permit and the Waihapa-1B well on NZEC's 50%-owned TWN Licenses are expected to recommence production in Q1-2014. A high-volume electric submersible pump ("ESP") is scheduled to be installed on Toko-2B in Q1-2014 in order to realize a further increase to production in April, followed by additional production from the Waihapa-2 and Waihapa-8 wells later in Q2-2014.

     

    Production Highlights

     

    Total corporate production (net to NZEC)
    February 2014 first three days average: 284 barrels per day ("bbl/d") oil
    January 2014 average: 202 bbl/d oil
    December 2013 average: 236 bbl/d oil
    Commenced delivery of Copper Moki natural gas to the Waihapa Production Station in early January
    All gas required for compressor fuel at the Waihapa Production Station and for gas lift of the TWN JA reactivated wells is currently provided from corporate production (TWN JA purchased external lift gas in Dec 2013), resulting in savings of approx NZ$100,000 net to NZEC in January (Company estimate)
    Third-party revenue at the Waihapa Production Station during January of approx NZ$155,000 (net to NZEC)
    Upcoming Catalysts

     

    Additional production opportunities identified
    Waitapu-2 well expected to resume production in Q1-2014
    Waihapa-1B: Testing the production potential of the Tikorangi Formation. If successful, the well should recommence production in Q1-2014
    Toko-2B ESP installation targeted for Q1-2014, with a production increase anticipated in April 2014
    Waihapa-2: Existing Tikorangi well successfully recompleted uphole to access bypassed Mt. Messenger production. Well shut-in for installation of artificial lift, production expected in Q2-2014
    Waihapa-8: Mt. Messenger Formation production potential confirmed by short flow test. Well shut-in for installation of artificial lift, production anticipated in Q2-2014
    Production fluctuations are the result of ongoing work at the TWN Joint Arrangement ("TWN JA") reactivated wells to optimize oil production. Two TWN JA wells were shut-in at the end of December for optimization activities and resumed production in the second week of January. Likewise, NZEC's Copper Moki-3 well remained shut-in for the first half of January, resuming production on January 17.

     

    During January, NZEC commenced delivery of Copper Moki natural gas to the Waihapa Production Station. As a result, the Company is currently able to internally generate all of the natural gas required to lift the TWN JA reactivated wells and run the Waihapa Production Station compressors, significantly reducing operating costs at the Waihapa Production Station and bringing modest natural gas revenue to the Company.
    4 Feb, 07:41 AM Reply Like
  • jmale
    , contributor
    Comments (8) | Send Message
     
    First a panic reaction then only a modest slide in the share price. I found today's update quite promising but not everybody was happy with it. Systematical steps from the company coming anyway.

     

    Growth is needed, and growth is surely coming, maybe even pleasant surprises concerning the potential of EC, but how vulnerable can the companies in New Zealand be when the oil price starts to get lower? Do we have a limit when it starts to hurt on a real basis?
    4 Feb, 04:29 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » I think it's tough to be optimistic in this market. I see oil prices heading lower near term, but longer out I still see substantial profits for new oil discoveries in New Zealand.

     

    The existing shareholders who have rode this NZ slide are just
    disappointed. I think the hard working folks in NZ are not to blame but the pace of developments that drive up share prices need to
    substantially improved by next report in may when Q1 reports or the
    Capital will flee where it gets more immediately rewarded.

     

    I expect price to slide over next few weeks, I think it will be a safe entry point below $0.24 for the folks who plan on holding for a year or more. The key is what plays out next Quarter, and meanwhile the markets are going sideways so it's not short term trade if you are in you need to average down if you are at a trading loss, if you are waiting to get in, I would wait a bit longer, if you got out already I would assess all the shale basin plays for their risk vs reward and spread some $$ into North Dakota and Australia and New Zealand and Columbia. Canacol looks attractive, Linc Energy is shopping for $15 MM partner in Australia for drilling Arckaringa and there are lots of viable plays that are well financed worth checking out. I really like Petromanas at its current price and as much as I love the upside of New Zealand, I think it will be late spring or summer before it heats up again, the drilling activity in the USA is much more predictable and I have to say just placing a big bet on EOG resources last six months would have been much easier on my stomach and wallet than these NZ plays. Like yesterday Anadarko lost $250 million on a dry hole after 70 days of drilling in New Zealand, adding up their quarterly loss to $900 million and despite the bad news the stock goes up today (go figure?).

     

    There are a number of events that could re-price oil and USD:OIL conversions next 3-6 months, any or all of these events could drammatically change the economics of shale and these plays.

     

    The lower lows will create a technical bottom in next 1-3 weeks and
    Offer some cheaper shares for those with the guts to average down.
    I am only going back in after the March numbers come out as they will be more what the market was likely expecting in January.
    Waihapa 2 should be very nice numbers if the mt. Messenger recompletion worked and if Tikorangi does its job with the submersible. The combination of wells and rates needs to be growing as the management pitched or the story becomes a hope on the east coast only which although great potential, it's going to take a pile of cash to achieve and if it doesn't come from oil production it means dilutive financing or giving up % in a joint venture.

     

    I still like Taranaki and East Coast, however my expectation timelines have been way off and I think given that much of the drilling and completion engineering talent is going to come from north America to exploit new Zealand this play is likely to take longer to materialize and investors need to adjust their expectations accordingly.
    4 Feb, 05:29 PM Reply Like
  • JohnIntuitive
    , contributor
    Comments (59) | Send Message
     
    Just so everyone knows - Waitapu-2 well expected to resume production in January
    add in 100 bpd net to NZ (This well is on the Eltham permit. It's 100% net to NZ)

     

    - Everyone remember when I made this statement, I talk to Rhyllin, this well only needed a service rig on 1/25/2014 to bring it back on line - the rig was delayed...this one well would have put the bpd @ 386/bpd...not this 286 bullshit.

     

    - Either the company who had the rig really did need it a little longer...so it was a case of bad luck...or they purposefully kept it knowing it would skew NZEC's #'s to the downside making them look stagnant...March's #'s will be very different.
    5 Feb, 08:59 AM Reply Like
  • JohnIntuitive
    , contributor
    Comments (59) | Send Message
     
    Here is an answer from John Proust on the same question I just answered:

     

    Why didn't the Waitapu-2 and Waihapa-2 wells start producing in January, as forecast?

     

    February 5, 2014
    We were supposed to get a service rig in the third week of January to allow us to complete the work required to get those two wells into production (replacing the pump in Waitapu-2 and installing artificial lift in Waihapa-2) but the rig was delayed. The rig is being used by another oil and gas company and their activities took longer than anticipated. The service companies allow minor extensions to timelines so that companies can finish up their work. We would want them to apply the same courtesy to us, if our work takes longer than expected. So although it's frustrating, we'll have to wait for the rig until mid-February. Once we've got the rig we will immediately start working on the five wells as outlined in our February 4 press release. We'll be replacing the downhole pump in Waitapu-2, installing the ESP in Toko-2B, and then installing artificial lift in Waihapa-2 and Waihapa-8. We don't need a service rig to recommence production from the Tikorangi formation in Waihapa-1B. If we're not happy with the Tikorangi performance, however, we could use the service rig to do an uphole Mt. Messenger completion in the Waihapa-1B well. We will certainly keep that rig very busy, once we've got it!
    5 Feb, 03:58 PM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » Appreciate the post JohnIntuitive,

     

    Equipment delays are unfortunate but its not limited to New Zealand, the industry is moving at breakneck speed but things are not timed perfectly and its got to be done safe, done right or not at all. I doubt there was any lack of good effort, just a untimely delay that corresponded with our (investors) expected production numbers. I would suggest the answer you provided from John Proust is what you can count on happening going forward. As far as results I think we are best to not over predict and even if they are much higher initially that we still take caution and treat this as a start-up where delays and frustrations go with the territory of excitement and exceptional results long term. I am working on a quick post should be up by next week.

     

    5 Feb, 04:19 PM Reply Like
  • JohnIntuitive
    , contributor
    Comments (59) | Send Message
     
    Tullii -

     

    What happened to the article "Comparing 2 Taranakis..."?

     

    Where did it go?
    22 Feb, 11:23 AM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » More Activity in the Basin of Taranaki

     

    New Zealand-focused junior explorer Kea Petroleum announced Monday that it has agreed a farm-out deal with MEO Australia concerning its PEP 51153 license, which includes the Puka discovery. The PEP 51153 permit covers an area of 40 square miles and is situation onshore along the eastern margin of the Taranaki Basin. In phase one of a $12-million work program, MEO has committed $3.5 million to earn a 30-percent interest. Phase one will include: the work over of both existing Puka wells to boost production; the drilling of a new well to test a potential reservoir sweet spot and further boost production; and the testing of the suspended Douglas 1 well to determine the fluid content of Tikorangi Limestone and the northern extent of the Puka field. In phase two, MEO can elect to take a further 20-percent interest for a further commitment $6.5 million. This phase will include: the construction of a new central drilling and production facility; the drilling of appraisal wells to evaluate the central portion of the field; and enhanced field production through the application of horizontal drilling and production technologies. Kea Chairman Ian Gowrie-Smith commented in a company statement: "Kea's future success was dependent upon attracting a quality farm-in partner to assist in the development of Puka. We are delighted with the introduction of MEO into PEP 51153 and the farm-out arrangements which provide for a substantial carry for Kea. "The agreed work program is designed to boost near-term oil production, verify the Puka 2P resource, and accelerate the commercialization of the oil potential identified within the permit. MEO's entry into onshore New Zealand is very welcome, bringing valuable additional technical and commercial expertise at a critical time for the development of Puka. MEO's technical team has extensive expertise in major oil companies with geologically similar turbidite fields. MEO's staff also have significant international development and commercial expertise that complements Kea's technical strengths and local operational expertise." - See more at: http://bit.ly/1lWLXpe
    13 Apr, 10:02 AM Reply Like
  • tullii
    , contributor
    Comments (109) | Send Message
     
    Author’s reply » Research analysts at M Partners decreased their price target on shares of New Zealand Energy Corp (CVE:NZ) from C$0.65 to C$0.60 in a report released on Thursday, AR Network reports. The firm currently has a “buy” rating on the stock. M Partners’ target price would suggest a potential upside of 185.71% from the stock’s previous close.
    Separately, analysts at Canaccord Genuity upgraded shares of New Zealand Energy Corp from a “hold” rating to a “speculative buy” rating in a research note on Wednesday, January 15th. Three equities research analysts have rated the stock with a hold rating and one has assigned a buy rating to the stock. New Zealand Energy Corp presently has an average rating of “Hold” and an average target price of C$0.45.
    New Zealand Energy Corp. (CVE:NZ) is an oil and natural gas company engaged in the exploration, acquisition and development of petroleum and natural gas assets in New Zealand.
    Get Analysts' Upgrades and Downgrades via Email - Stay on top of analysts' coverage with Analyst Ratings Network's FREE daily email newsletter that provides a concise list of analysts' upgrades and downgrades. Click here to register now.
    13 Apr, 10:53 AM Reply Like
  • haoleboy1967
    , contributor
    Comments (253) | Send Message
     
    Thanks for the update
    Long NZERF
    14 Apr, 07:10 AM Reply Like
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