TSX-V: NZ     C$ 0.04 +0.00 +0% Volume: 354,500 May 1, 2015
New Zealand Energy Corp. also trades on the OTCQX International under symbol NZERF
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Strategic Acquisition

In May 2012, NZEC announced that it had entered into an agreement 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. The agreement was amended a number of times, and on July 30, 2013, NZEC announced that it planned to purchase the assets in a 50/50 partnership with L&M Energy, with L&M contributing $18.25 million toward the $33.5 million purchase price. On October 28, 2013, NZEC and L&M completed the acquisition.

NZEC now owns a 50% interest in three Petroleum Mining Licenses ("TWN Licenses") totalling 23,049 acres in the main production fairway of the Taranaki Basin. NZEC also owns a 50% interest in the Waihapa Production Station, a high-capacity (45 mmcf/day, 25,000 bbl/day) full-cycle production facility that is central to NZEC's permits and includes an extensive network of gathering and sales pipelines. NZEC and L&M formed a 50/50 joint venture to explore, develop and operate the TWN Licenses and the Waihapa Production Station, with NZEC as the operator. NZEC and L&M will collectively pay Origin a 9% royalty on all future hydrocarbon production from the TWN Licenses, and can buy back up to 4% of the royalty at any time by paying Origin $4.25 million per percentage point.

In conjunction with the acquisition, NZEC booked additional reserves and resources, increasing its Proved + Probable (2P) reserves by 150%. Additional information regarding the Company’s reserves and resources is available in the Company’s Form 51-101F1 Statement of Reserves Data dated April 2, 2014 and in the Company’s Interim Statement of Reserves and Resources dated October 28, 2013, both of which are filed on SEDAR at www.sedar.com.


Following completion of the acquisition, NZEC commented: “This acquisition more than doubles the Company’s oil and gas reserves and expands NZEC’s presence in New Zealand from both an exploration and infrastructure perspective. The new properties offer immediate production and cash flow potential from existing wells, and significant exploration potential across multiple horizons, including the Mt. Messenger and the deeper productive Tikorangi and Kapuni formations. We will move quickly to implement our development plans for the TWN Assets and look forward to demonstrating the value of this acquisition as our exploration and development program unfolds.”

With 85,162 net acres of Petroleum Exploration Permits and 12,468 net acres of Petroleum Mining Licenses, NZEC controls a significant portion of the exploration fairway in the Taranaki Basin. The Deloitte reserve and resource estimate underscores the prospectivity of the TWN Licenses across multiple formations, with uphole completion and production potential from existing wells and the ability to rapidly drill new wells. Controlling a central oil and gas production facility in the Taranaki Basin also provides NZEC with the strategic opportunity and capacity to independently process production, at reduced operating costs, as well as generate cash flow through third-party processing agreements.

About New Zealand Energy Corp.

NZEC is a publicly-traded company (TSX-V:NZ, OTCQX:NZERF) focused on the production and exploration of oil and natural gas prospects in New Zealand.

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Last Updated: 0.04 +0.00 +0% Volume: 354,500 May 1, 2015