New Zealand Energy Corp. (TSX-V: NZ): Well recompletion successes opens-up a route to production and reserves growth
• The Ngaere‑2 well is delivering a stable, unstimulated oil rate of ~300 bbl/d from 36 metres of perforated Mount Messenger pay. This materially exceeds management expectations.• In early March, NZE confirmed that Ngaere‑1 recompletion work—targeting a previously bypassed interval—achieved ~120 bbl/d of oil, consistent with prior guidance.
• Ngaere‑2 marks the third successful recompletion in the Mount Messenger formation. Additional reservoir intervals remain to be perforated and the encountered reservoir is interpreted as being part of new pool located across a fault ~3 km north of Ngaere‑1.
• Gross field production is currently constrained to ~700–800 bbl/d due to limited surface handling capacity. The company is evaluating debottlenecking options, and the installation of downhole pumps should help sustain plateau rates. Monumental Energy (NZE’s partner) believes gross output of ~1,000 bbl/d is achievable.
• Six further wells have already been permitted, with several candidates under review for workovers over the next three months.
• Key near‑term catalysts include the upcoming Tariki‑5 flow test and the anticipated indicative offer from Genesis for the gas‑storage project. Our risked valuation for the gas‑storage asset remains ~US$52 mm net to NZE, equivalent to C$1.26 per share.
• Incorporating the stronger‑than‑expected Ngaere‑2 performance, we have increased our target price from C$1.35 per share to C$1.45 per share.
Valuation
We continue to apply a 50% discount to the unrisked value of the Tariki gas‑storage project, benchmarked against the 2017 sale of the Ahuroa facility and assuming 20 bcf of storage capacity at Tariki versus 11 bcf at Ahuroa. We have increased the value we attribute to the existing production and the Mount Messenger upside (2-3 mbbl gross recoverable resources). Our total ReNAV is C$1.46 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.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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