Press release from Marketwire
New Zealand Energy Announces 2011 Year-End and Fourth Quarter Results and 2011 Year-End Reserves Estimate
Monday, April 30, 2012
New Zealand Energy Announces 2011 Year-End and Fourth Quarter Results and 2011 Year-End Reserves Estimate07:30 EDT Monday, April 30, 2012VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 30, 2012) - New Zealand Energy Corp. (TSX VENTURE:NZ)(OTCQX:NZERF) ("NZEC" or the "Company"), an oil and natural gas company that is producing, exploring and developing petroleum prospects in New Zealand, has released the results of its fourth quarter and fiscal year ended December 31, 2011. Details of the Company's financial results are described in the Audited Consolidated Financial Statements and Management's Discussion and Analysis, which, together with further details on each of the Company's projects, are 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.NZEC has also released the results of its 2011 year-end reserve and resource estimation and economic evaluation (the "Report"), prepared by Deloitte & Touche LLP ("AJM Deloitte"). The reserve estimate and economic evaluation was confined to NZEC's 100% working interest Eltham Permit (PEP 51150) and was based on the reservoir and production data from the Copper Moki-1 well with a December 31, 2011 cut-off. Regulatory filings associated with the Report are available for review on SEDAR. NZEC expects to commission a reserve and resource update in the near term to include exploration and production data from three more wells on the Copper Moki pad that were drilled in 2012.FINANCIAL SNAPSHOT For the year endedFor the year endedDecember 31, 2011December 31, 2010$$Production11,623 bblNilSales9,567 bblNilPrice106.83 $/bblNilProduction costs23.44 $/bblNilRoyalties4.96 $/bblNilNet revenue78.43 $/bblNilRevenue$974,517$NilTotal comprehensive loss(6,655,829)(10,338,136)Interest income119,583NilLoss per share - basic and diluted(0.08)(0.24)Current assets19,293,3456,229,650Total assets31,152,8046,301,322Total liabilities1,383,376371,958Shareholders' equity$29,769,428$5,929,364Note: The abbreviation bbl means barrel or barrels of oil.On December 10, 2011, the Corporation commenced continuous production from its Copper Moki-1 well and as such began to recognize revenue from this period. Incidental revenue generated during the start-up and testing phase of the well was treated as a cost recovery of the capitalized well development costs. During the period year December 31, 2011, the Corporation produced and sold 8,603 barrels of oil during the Copper Moki-1 start-up and testing phase for total recoveries of $950,440. The aggregate volume of oil produced during the year was 20,226 barrels.During the start-up and testing for Copper Moki-1, the Corporation incurred various one-off costs to commission the well, resulting in a netback of $78.43/bbl for the initial production period to December 31, 2011. First quarter 2012 netback numbers are in excess of $90.RESERVE ESTIMATEOn April 27, 2012, NZEC booked its first oil and gas reserves. The reserve estimate and economic evaluation was confined to NZEC's 100% working interest Eltham Permit (PEP 51150) and was based on the reservoir and production data from the Copper Moki-1 well with a December 31, 2011 cut-off. Regulatory filings associated with the Report are available for review on SEDAR. NZEC expects to commission a reserve and resource update in the near term to include the reservoir and production data from three more wells on the Copper Moki pad that were drilled in 2012. Summary of Oil and Gas ReservesAs at December 31, 2011Forecast Prices and CostsReservesLight and Medium OilNatural GasReserves CategoryGross Remaining (Mbbl)Gross Remaining (MMcf)ProvedDeveloped Producing117.9125.6Developed Non-Producing--Undeveloped--Total Proved117.9125.6Probable103.9235.5Total Proved + Probable221.8361.1Possible95.4208.9Total Proved + Probable + Possible317.2570.0Notes: Mbbl - thousand barrels of oil. MMcf - million cubic feet of natural gas. See Cautionary Note Regarding Reserve Estimates.Summary of Net Present Value of Future Net RevenueAs at December 31, 2011Forecast Prices and CostsNet Present Values of Future Net Revenues Before Tax Discounted at (%/year)Unit Value Before Tax Discounted at (%/year)Reserves Category0% (M$)5% (M$)10% (M$)10% ($/boe)ProvedDeveloped Producing6,624.06,475.46,339.245.7Developed Non-Producing----Undeveloped----Total Proved6,624.06,475.46,339.245.7Probable7,120.36,328.25,653.239.5Total Proved + Probable13,744.312,803.711,992.542.5Possible7,207.56,091.95,262.140.4Total Proved + Probable + Possible20,951.818,895.617,254.641.9Notes: boe - barrels of oil equivalent, calculated as 6 Mcf:1 bbl. See Cautionary Note Regarding Reserve Estimates.RECENT DEVELOPMENTSOn April 24, 2012, NZEC entered into a drilling agreement with Ensign International Energy Services Pty Ltd ("Ensign") pursuant to which Ensign has committed to drill three exploration wells for NZEC, with the option for up to five additional wells, in the second half of 2012.On April 1, 2012, NZEC commenced continuous production from its Copper Moki-2 well. Copper Moki-2 flowed 14,825 barrels of oil and 15,352 thousand cubic feet ("Mcf") of natural gas(1) during a 16-day flow test in February and was subsequently shut-in for pressure build-up before commencing production in April. The well is currently producing from natural reservoir pressure out of the Mt. Messenger formation at an average rate of 581 barrels of oil per day ("bbl/d") and 1,530 Mcf of natural gas1 per day ("Mcf/d") through a 24/64th inch choke. On March 21, 2012, NZEC closed a bought deal financing and over-allotment for gross proceeds of $63,480,000. Through a syndicate of underwriters led by Canaccord Genuity Corp. and including Macquarie Capital Markets Canada Ltd., Mackie Research Capital Corporation, PI Financial Corp. and Haywood Securities Inc., NZEC issued 21,160,000 common shares at a price of $3.00 per common share. The Underwriters elected to exercise their over-allotment option in full. Net proceeds will be used to explore and develop NZEC's oil and gas properties, for additional geologic and technical studies, and for other general corporate purposes.On February 22, 2012, the Company provided year-end production guidance of 3,000 boe/d.On February 22, 2012, NZEC entered into a Cooperation Agreement with Te Runanga o Ngati Ruanui Trust ("TRoNRT"), the iwi (tribe) located in South Taranaki near NZEC's Alton and Eltham permits. Under the terms of the agreement, TRoNRT will support NZEC's exploration, development and production activities within the Ngati Ruanui area and NZEC will contribute to positive cultural, economic and social outcomes for the development of Ngati Ruanui and its communities. NZEC and TRoNRT have agreed to establish clear process and communication protocols and to share relevant environmental and technical information. TRoNRT will provide relevant cultural advice and support as NZEC moves through the resource consent, permitting and development process. In addition, NZEC will provide a right of first opportunity to TRoNRT's members for business, employment, educational and training opportunities in South Taranaki. The Cooperation Agreement outlines the parties' desire to build a sustainable and enduring relationship that promotes the activities and prosperity of NZEC while developing a sustaining and prosperous environment for TRoNRT.On February 21, 2012, NZEC entered into an agreement with L&M Energy Limited ("L&M") to increase its interest in the Alton Permit from 50% to 65%. NZEC will earn the additional 15% by funding the collection and processing of 3D seismic data over approximately 50 km2 of the permit. NZEC is the operator of the permit.On February 6, 2012, NZEC reached target depth of 1,441 metres in its Ranui-2 well on its 100% working interest Ranui Permit in the East Coast Basin, collecting open hole log data and coring the Whangai shale formation across three intervals.On December 20, 2011, NZEC commenced trading on the OTCQX International under the symbol "NZERF". On December 10, 2011, NZEC commenced continuous production from its Copper Moki-1 well in the Taranaki Basin. Copper Moki-1 continues to flow from natural reservoir pressure; production rates have averaged 424 bbl/d and 1,058 Mcf/d1 since commencing continuous production. Over the last 30 days, CM-1 has produced at an average rate of 309 bbl/d and 1,205 Mcf/d1 through a 24/64th inch choke. PROPERTY REVIEWTaranaki BasinThe Taranaki Basin is situated on the west coast of the North Island and is currently New Zealand's only oil and gas producing basin, producing approximately 130,000 boe/day from 18 fields. Within the Taranaki Basin, NZEC has acquired the following PEPs:On March 3, 2011, New Zealand's Minister of Energy granted an assignment of the Eltham Permit to NZEC. The Eltham Permit covers approximately 92,467 acres (374 km2) of which approximately 31,877 acres (129 km2) are offshore in shallow water. On June 24, 2011, NZEC entered into the Alton Agreement with AGL pursuant to which the Corporation agreed to acquire a 50% interest in the Alton Permit and associated joint venture with L&M, which owns the other 50% of the permit. Approval for the assignment of the 50% interest was granted on October 4, 2011. The Alton Permit is adjacent to the Eltham Permit and covers approximately 119,203 acres (482 km2). On February 21, 2012, NZEC entered into a subsequent agreement with L&M whereby NZEC can increase its interest in to the Alton Permit to 65% by funding the collection and processing 3D seismic data over approximately 50 km2 of the permit.NZEC has drilled five exploration wells in the Taranaki Basin, one on the Alton Permit and four from the Copper Moki pad on the Eltham Permit. Copper Moki-1 and Copper Moki-2 are currently in production. Copper Moki-3 and Copper Moki-4 will be completed and tested in Q2-2012.ProductionNZEC's Copper Moki-1 well has been flowing from natural reservoir pressure since December 10, 2011 and has produced more than 67,000 barrels of oil since it was first tested in August 2011. Production rates have averaged 424 bbl/d and 1,058 Mcf/d1 since commencing continuous production in December 2011. Over the last 30 production days, Copper Moki-1 has produced at an average rate of 309 bbl/d and 1,205 Mcf/d1 through a 24/64th inch choke. Copper Moki-2 flowed 14,825 barrels of oil and 15,352 Mcf of natural gas1 during a 16-day flow test in February and was subsequently shut-in for pressure build-up. NZEC initiated continuous production from Copper Moki-2 on April 1, 2012. The well is currently producing from natural reservoir pressure out of the Mt. Messenger formation at an average rate of 581 bbl/d and 1,530 Mcf/d1 through a 24/64th inch choke.Natural gas and associated natural gas liquids are being flared until the Corporation completes a 2.6-km pipeline and associated production and sales agreements, with the pipeline scheduled for completion by the end of Q2-2012. ExplorationCopper Moki-3 reached target depth at 3,167 metres in mid-March and is the Corporation's first well drilled through to NZEC's deeper exploration target, the Moki formation. After evaluation, the Corporation identified 12 metres of net pay within the Mt. Messenger formation and 15 metres of net pay within the Moki formation. NZEC brought a service rig to site and commenced completion of Copper Moki-3 on April 25, 2012. Copper Moki-4 reached target depth of 2,125 metres on April 10, 2012. After evaluation, the Corporation has decided to perforate and test both the Urenui and Mt. Messenger formations, and will commence completion activities after perforating the Moki formation in Copper Moki-3.East Coast BasinThe East Coast Basin of New Zealand's North Island hosts two highly prospective shale formations, the Waipawa and Whangai, which are the source of more than 300 oil and gas seeps. Within the East Coast Basin, the following PEPs have been, or are in the process of being, acquired:On September 3, 2010, NZEC applied to the Minister of Energy for the East Cape Permit. The application is uncontested and the Corporation expects the East Cape Permit to be granted to NZEC upon completion of Crown Mineral's review of the application. The East Cape Permit covers approximately 1,067,495 onshore acres (4,320 km2) on the northeast tip of the North Island.On November 24, 2010, the Minister of Energy granted the Castlepoint Permit to NZEC. The Castlepoint Permit covers approximately 551,042 onshore acres (2,230 km2). On February 22, 2011, NZEC entered into a permit acquisition agreement with Discovery Geo, pursuant to which Discovery Geo agreed to assign its 100% interest in the Ranui Permit to NZEC upon completion of certain conditions. Those conditions have been completed and approval for assignment of the permit was granted on June 27, 2011. The Ranui Permit is adjacent to the Castlepoint Permit and covers approximately 223,087 acres (903 km2). The Corporation has completed the geophysical and geochemical studies required to re-enter the Ranui-1 well. NZEC has completed the coring of two test holes on its 100% working interest Castlepoint Permit. The Orui (125 metres total depth) and Te Mai (195 metres total depth) collected data across the Waipawa and Whangai shales. NZEC also completed a test hole on its 100% working interest Ranui Permit. Ranui-2 was drilled to 1,440 metres, coring the Whangai shale across several intervals. OUTLOOK Taranaki BasinWith two wells in production, NZEC is focused on growing reserves, production and cash flow by testing Copper Moki-3 and Copper Moki-4 and executing an aggressive exploration program. Since Copper Moki-3 is NZEC's first well to be drilled to the Moki formation, the Corporation plans to thoroughly evaluate the characteristics of the formation in order to guide its exploration strategy for future Moki targets. Upon perforation, NZEC's technical team will determine if the formation flows naturally. If further stimulation is required, additional time will be needed to allow for a comprehensive evaluation of the Moki formation. Once the Moki formation is fully assessed the Corporation will determine whether the Mt. Messenger formation will be tested in Copper Moki-3 or advanced through an additional well.NZEC will complete and test Copper Moki-4 once the service rig has finished completion operations with respect to the Moki formation of Copper Moki-3. If successful, both wells will be tied into the existing production facilities at the Copper Moki pad.NZEC will shortly begin construction of an approximately 2.6-km natural gas pipeline that will deliver natural gas from the Copper Moki site to a gas production facility. The pipeline is targeted for completion at the end of Q2-2012. NZEC is currently producing approximately 2,630 Mcf/d1 of natural gas.NZEC has identified six prospects on 3D seismic similar to Copper Moki, with the expectation of establishing one pad per prospect with two to four wells per pad. NZEC has also identified 12 leads on 2D seismic that will be further defined with the ongoing 3D seismic survey. With a fully-funded treasury, NZEC is evaluating opportunities to accelerate its exploration program, including drilling additional wells which may target the deeper Tikorangi and Kapuni formations. While previous guidance was for six wells in the Taranaki Basin, NZEC has entered into a rig contract to drill up to eight wells in the second half of 2012. NZEC also has the ability to move quickly should the team identify a strategic acquisition, partnership or farm-in opportunity.NZEC is completing a 100-km2 3D seismic program over the northern region of the Eltham and Alton permits. Preparation for the seismic survey is nearly complete and NZEC intends to initiate the 30-day data acquisition process in early May. Following data acquisition, NZEC's technical team will take approximately four months to process and interpret the data and integrate the information into its technical database. The 3D seismic survey will further define existing targets and reduce drilling risk while potentially identifying new exploration targets and expanding NZEC's inventory locations for its 2013 exploration program. (1) Natural gas and associated natural gas liquids are currently being flared until the Corporation completes a pipeline and associated production and sales agreements, with the pipeline targeted for completion by the end of Q2-2012.East Coast Basin NZEC has drilled two stratigraphic holes on its 100% working interest Castlepoint Permit and one stratigraphic hole on its 100% working interest Ranui Permit. These three stratigraphic test wells will advance NZEC's understanding of the Waipawa and Whangai formations. A review of the geochemical and physical properties of the two shale packages will help focus NZEC's exploration strategy for the East Coast shales. In addition, NZEC's technical team will reprocess existing East Coast Basin seismic data and plans to shoot approximately 70 line kilometres of 2D seismic in the second half of 2012 and complete additional technical studies to further advance its understanding of the properties. The Corporation's application for the East Cape Permit is uncontested and NZEC expects the permit to be granted upon the completion of Crown Minerals' review of the application.RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2011RevenueDuring the year ended December 31, 2011, the Corporation commenced continuous production and as such began to recognize revenue during the period. Since December 10, 2011, the Corporation produced 11,623 barrels of oil and sold 9,567 barrels for total revenues of $1,022,009 or $106.83 per barrel sold. Total recorded gross production revenue was $974,517 after accounting for royalties of $47,492 or $4.96 per barrel sold. No revenues or royalties were recognized during the year ended December 31, 2010.Expenses and Other ItemsProduction costs during the year ended December 31, 2011 totalled $224,219 or $23.44 per barrel. During the start-up and testing for Copper Moki-1, the Corporation incurred various one-off costs to commissioning costs for the well. Included in production costs are all site related expenditures, including applicable equipment rental fees, site services, overheads and labour; transportation and storage costs including trucking, testing, tank storage, processing and handling; and port dues as incurred prior to the sale of oil. No production costs were incurred during the year ended December 31, 2010.Depreciation and accretion costs incurred during the year ended December 31, 2011 totalled $246,540 or $25.77 per barrel sold. As a result of the Copper Moki-1 well deemed to have commenced commercial production during the year all the related costs to the well were reclassified from exploration and evaluation assets to property, plant and equipment and depreciated using the unit-of-production method by reference to the ratio of production in the period to the related total proved and probable reserves of oil and natural gas, taking into account estimated future development costs necessary to access those reserves. No depreciation and accretion costs were incurred during the year ended December 31, 2010.During the year ended December 31, 2011, the drilling of the Talon-1 well was completed and total costs incurred amounted to $2,544,131. The Talon-1 well was drilled pursuant to an agreement to acquire the Corporation's 50% interest in the permit. The well location was selected by the previous operator based on 2D seismic data. The well results were not positive and as such did not indicate any commercially viable reserves, and the well was plugged and abandoned. Furthermore, management determined that the well would not generate future economic benefits and decided to write-off all related Talon-1 well costs. No impairments were incurred or recognized in the year ended December 31, 2010.Stock-based compensation for the year ended December 31, 2011 totalled $2,203,548 compared to $9,996,000 recognized in 2010. Of the total non-cash charge for the year ended December 31, 2011, $1,000,000 related to the IRBA asset purchase agreement, on the valuation of the shares issued, that was executed on February 21, 2011. The balance of $1,203,548 primarily related to the options granted to directors, officers and employees of the Company upon the completion of the Corporations initial public offering in August 2011. The entire balance of stock-based compensation recognized in 2010 related to the issuance and valuation of the Corporations founders shares upon its incorporation. The common shares were granted to some of the Corporation's directors and officers in lieu of the services performed and substantial guarantees provided to assist in obtaining the legal rights to its resource properties.General and administrative expenses for the year ended December 31, 2011 totalled $2,583,530 compared to $338,469 incurred in 2010. The general and administrative expenses incurred during the year related to professional fees, management fees, consulting fees, travel and promotion, rent, overheads, filing and insurance costs. The increase over prior year was indicative of a growing and developing business over a twelve month period as compared to only a 60 day period being recognized in the prior year due to its the incorporation on October 29, 2010. The general and administrative costs specifically related to establishing an operational structure, setting up offices in Vancouver, British Columbia and Wellington, New Zealand, engaging key personnel and incurring the necessary professional fees associated with the formation, public listing, over-all business development of the Corporation.Finance income for the year ended December 31, 2011 totalled $119,583 compared to $nil being recognized in 2010. Finance income relates to interest earned on the Corporations cash and cash equivalent balances held in treasury.Foreign exchange gains for the year ended December 31, 2011 amounted to $134,934 compared to a foreign exchange loss of $3,667 being realized in 2010. Foreign exchange gains and losses are a result of currency exchange differences being recognized on transactions during the period.Net Loss and Total Comprehensive Loss for the YearTotal expenses and other items for the year ended December 31, 2011 totalled $7,547,451 compared to $10,338,136 in 2010 representing an over-all decrease of $2,790,685 or 27%. Net loss for the year ended December 31, 2011 totalled $6,572,934, after taking into account gross net revenues of $974,517, which compared to a net loss for the year ended December 31, 2010 of $10,338,136 or an overall decrease of $3,765,202 or 36%. The Corporation did not recognize any gross revenues in 2010. After production revenues of $974,517, total comprehensive loss for the year ended December 31, 2011 totalled $6,655,829, after taking into account an exchange difference on translation of foreign currency of $82,895. This compared to a total comprehensive loss for the year ended December 31, 2010 of $10,338,136 for an over-all decrease of $3,682,307 or 36%.Based on a weighted average shares outstanding balance of 85,122,879, the Corporation realized an $0.08 basic and diluted loss per share for the year ended December 31, 2011. During December 31, 2010, the Corporation realized a $0.24 basic and diluted loss per share on a weighted average share balance of 43,005,714.SUMMARY OF QUARTERLY RESULTS2011 Q4 $2011 Q3 $2011 Q2 $2011 Q1 $2010 Q4 $Total assets31,152,80433,566,61110,683,23911,491,8066,301,322Resource properties6,052,6999,509,0954,641,5253,161,56160,222Property, plant and equipment5,509,51163,42168,36665,721-Working capital18,030,39818,699,0225,333,9997,596,3295,857,692Accumulated deficit(16,911,070)(17,057,134)(13,258,649)(12,168,826)(10,338,136)Total comprehensive loss(1,258,3141)(4,279,538)(773,524)(1,878,754)(10,338,136)Basic earning/(loss) per share0.01(0.04)(0.01)(0.03)(0.24)Diluted earning/(loss) per share0.01(0.04)(0.01)(0.03)(0.24)1 During the fourth quarter, the Corporation reclassified various expenditures to exploration and evaluation assets.New Zealand Energy Corporation was incorporated on October 29, 2010, under the Business Corporations Act of British Columbia. Upon incorporation, 40,000,000 common shares were granted to certain directors and officers of the Corporation in lieu of the services performed and substantial financial guarantees provided to assist in obtaining the legal rights to the Castlepoint and East Cape petroleum exploration permits within the East Coast Basin. The corporation then raised seed capital of $7,000,000 upon the subsequent issuance of 28,000,000 common shares in Q4-2010 and Q1-2011 to engage in the exploration, acquisition and development of petroleum and natural gas assets in New Zealand. This financing was followed by another private placement completed in Q1-2011 for gross proceeds of $5,257,500 on the issuance of 7,010,000 common shares. The Corporation entered into an agreement in Q1-2011 with IRBA Consulting pursuant to which it would acquire certain assets and provide employment to certain personnel in consideration for CDN $400,000 and the issuance of 2,000,000 common shares. Also in Q1-2011, upon satisfying the conditions of a deed of assignment, the Corporation took ownership of its Eltham permit. Further exploration and evaluation expenditures continued on the Eltham permit throughout fiscal 2011, which ultimately saw the commercialization of the Copper Moki-1 well in Q4-2011. All related costs to the Copper Moki-1 well were transferred to property, plant and equipment in Q4-2011. In Q2-2011, the Corporation agreed to acquire a 50% interest in the Alton permit for AUD2,000,000 and fund 100% of the Talon-1 well development costs, which totalled $2,544,131. The Talon-1 well development costs were written off in Q3-2011 due to management's view that the well would not provide any future benefits. In Q2-2011, the Corporation completed the acquisition of its Ranui permit for USD1,000,000 and the issuance of 1,000,000 common shares. Since the Corporation's inception, general and administrative costs have been incurred to assist in establishing the operating structure, setting up offices in both Canada and New Zealand, securing key personnel and general business development.On behalf of the Board of DirectorsJohn Proust, Chief Executive Officer & Director About New Zealand Energy Corp.NZEC is an oil and natural gas company engaged in the production, development and exploration of petroleum and natural gas assets in New Zealand. NZEC's property portfolio collectively covers nearly two million acres of conventional and unconventional prospects in the Taranaki Basin and East Coast Basin of New Zealand's North Island. The Company's management team has extensive experience exploring and developing oil and natural gas fields in New Zealand and Canada, and takes a multi-disciplinary approach to value creation with a track record of successful discoveries. NZEC plans to add shareholder value by executing a technically disciplined exploration and development program focused on the onshore and offshore oil and natural gas resources in the politically and fiscally stable country of New Zealand. NZEC is listed on the TSX Venture Exchange under the symbol NZ and on the OTCQX International under the symbol NZERF. More information is available at www.newzealandenergy.com or by emailing email@example.com.Forward-looking StatementsThis news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively "forward-looking statements"). The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "propose", "should", "believe", "initiate", "with the objective of", "plan" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including without limitation, the speculative nature of exploration, appraisal and development of oil and natural gas properties; uncertainties associated with estimating oil and natural gas resources; uncertainties in both daily and long-term production rates and resulting cash flow; volatility in market prices for oil and natural gas; changes in the cost of operations, including costs of extracting and delivering oil and natural gas to market, that affect potential profitability of oil and natural gas exploration; the need to obtain various approvals before exploring and producing oil and natural gas resources; uncertainty in the timing of receipt of permits and the Company's ability to extend the permits if required; exploration hazards and risks inherent in oil and natural gas exploration; operating hazards and risks inherent in oil and natural gas operations; market conditions that prevent the Company from raising the funds necessary for exploration and development on acceptable terms or at all; global financial market events that cause significant volatility in commodity prices; unexpected costs or liabilities for environmental matters; competition for, among other things, capital, acquisitions of resources, skilled personnel, and access to equipment and services required for exploration, development and production; changes in exchange rates, laws of New Zealand or laws of Canada affecting foreign trade, taxation and investment; failure to realize the anticipated benefits of acquisitions; and other factors as disclosed in documents released by NZEC as part of its continuous disclosure obligations. Information concerning reserves may also be deemed to be forward looking as estimates imply that the reserves described can be profitably produced in the future. NZEC believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct. Such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release and NZEC does not undertake to update any forward-looking statements that are contained in this news release, except in accordance with applicable securities laws. Cautionary Note Regarding Reserve EstimatesThe oil and gas reserves calculations and income projections, upon which the Report was based, were estimated in accordance with the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101 ("NI 51-101"). The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf:one bbl was used by NZEC. This conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on: the analysis of drilling, geological, geophysical, and engineering data; the use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to the degree of certainty associated with the estimates. Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves. Revenue projections presented in the Report are based in part on forecasts of market prices, current exchange rates, inflation, market demand and government policy which are subject to uncertainties and may in future differ materially from the forecasts above. Present values of future net revenues documented in the Report do not necessarily represent the fair market value of the reserves evaluated in the Report.The Report also contains forward-looking statements including expectations of future production and capital expenditures. Information concerning reserves may also be deemed to be forward looking as estimates imply that the reserves described can be profitably produced in the future. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause the actual results to differ from those anticipated. FOR FURTHER INFORMATION PLEASE CONTACT: John ProustNew Zealand Energy Corp.Chief Executive Officer & DirectorNorth American toll-free: 1-855-601-2010ORBruce McIntyreNew Zealand Energy Corp.President & DirectorNorth American toll-free: firstname.lastname@example.orgNeither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.