VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/29/13 -- New Zealand Energy Corp. ("NZEC" or the "Company") (TSX VENTURE: NZ)(OTCQX: NZERF) has released the results of its second quarter ended June 30, 2013. Details of the Company's financial results are described in the Unaudited Consolidated Financial Statements and Management's Discussion and Analysis which, together with further details on each of the Company's projects, will be available on the Company's website at www.newzealandenergy.com and on SEDAR at www.sedar.com. All amounts are in Canadian dollars unless otherwise stated.
Production and Development
-- Announced development plans for the Taranaki Basin until the end of 2014, forecasting exit production rates of 2,300 BOE/day (applying mid- case assumptions)(1)-- 48,752 barrels of oil ("bbl") produced and 49,204 bbl sold during six- month period, generating pre-tax oil sales of $5.3 million-- Positive net cash flow from petroleum operations during six-month period of approximately $1.7 million-- Average field netback during six-month period of $35.10/bbl-- Substantial reduction to direct production costs at Copper Moki site during June 2013 as a result of the installation of permanent production facilities-- 56,717 bbl produced and 59,623 bbl sold year to date (August 26, 2013), generating pre-tax oil sales of approximately $6.4 million-- Cumulative production of 264,938 bbl since commencement of production, generating pre-tax oil sales (including sales from pre-production testing) of approximately $28.5 million-- Initiated installation of artificial lift at Waitapu-2 well-- Received results of RPS reservoir study, providing the Company with a better understanding of Mt. Messenger reservoir characteristics and declines-- Lodged an application for a petroleum mining permit that will encompass the Company's Copper Moki, Waitapu, Arakamu and Wairere sites in the Eltham Permit (18.73 km2)
Acquisition of TWN Licences and TWN Assets from Origin Energy
-- Amended deal terms related to the acquisition, resulting in a simplified sale and reduced purchase price-- Entered into a binding letter agreement with L&M Energy ("L&M") to explore and operate the TWN Licences and TWN Assets, securing $18.25 million from L&M to purchase a 50% interest in the assets-- Obtained an extension to secure remaining required funds ($9.25 million) until September 30, 2013-- Settled the HSBC operating line of credit-- Announced 2P reserves of 1.07 million BOE attributed to the TWN Licences (NZEC's interest)(2)(1) Barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. The boe conversion ratio of 6 Mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. See Forward- looking Information for assumptions associated with production forecast.(2) Reserves associated with the TWN Licences, as previously announced in an NZEC press release on June 17, 2013, will not be attributable to NZEC until the Company has completed the acquisition of assets from Origin and filed an updated Reserve report under NI 51-101. NZEC's shares of the TWN Reserves is 50%, as per the terms of the TWN Arrangement with L&M.