New Zealand Energy Corp. (TSX-V: NZ): Higher than expected production resumption
• Monumental Energy reports that Copper Moki-1 and Copper Moki-2 are currently producing a combined 125 bbl/d, with rates trending upwards as pump speeds are gradually increased. Reflecting this momentum, we are revising our gross production estimate for Copper Moki from 125 boe/d to 180 boe/d (~175 bbl/d) for Q4 2025.• The Ngaere-1 pipeline was recommissioned in July with initial production from the well exceeding 400 bbl/d (200 bbl/d net to New Zealand Energy’s 50% working interest). Production is trucked to the port and is currently constrained by onsite tank capacity. Over the past two weeks, gross output has averaged 180 bbl/d, supplemented by 15 bbl/d via the oil pipeline—equating to ~100 bbl/d net to New Zealand. The company is actively working to alleviate infrastructure bottlenecks and increase pipeline throughput. Notably, we had not previously attributed any production to Ngaere-1. We now assume this level of output through September, followed by a 50% decline in Q4 2025 due to anticipated water breakthrough.
• Ngaere-1’s performance has positive implications for the Waihapa-H1 well, located 15 metres updip. Given its structural elevation, Waihapa-H1 is expected to exhibit slower water encroachment. The well could be reactivated in Q4 2025, though we currently assign no production from it in our model.
• New Zealand Energy also plans to restart Tariki-5A using gas lift, which could provide incremental upside to our production forecasts.
• The development concept for the gas storage facility is expected to be finalized this month. This remains the core value driver for the company.
• Higher-than-expected production volumes are set to enhance near-term cash flow. We forecast total net production of 180 boe/d in Q4 2025. Should Waihapa-H1 come online successfully, output could potentially double, further strengthening the balance sheet. Despite the near-term production uplift, our valuation remains anchored in the potential of the gas storage business. We reiterate our target price of C$1.70 per share.
Valuation
We currently apply a 50% discount to the unrisked value of Tariki gas storage based on the Ahuroa sale in 2017 (assuming 20 bcf storage capacity at Tariki and 11 bcf at Ahuroa). We note that this is in line with a valuation based on the respective injection/withdrawal capacities (but no discount). Our ReNAV is C$1.69 per share. Our unrisked NAV for the gas storage is C$3.48 per share.
Sintana Energy is a development stage company engaged in oil and gas exploration and development activities in the United States.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
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