New Zealand Energy Corp. (NZEC) announced a significant update on its Tariki project, including positive results from the Tariki-5A well and the accelerated development of a gas storage facility on February 11.

The Tariki-5A well, drilled to appraise the Tariki sands, has exceeded expectations by intersecting the target formation 11 meters higher than previously encountered. This discovery confirms the presence of substantial remaining free gas and condensate in an up-dip position within the field. The high-quality 55-meter net sand intersection further solidifies the viability of Tariki as a prime gas storage location. NZEC is currently updating reserve estimates and associated production forecasts to reflect these positive findings.

While initial flow rates from Tariki-5A were lower than pre-drill projections due to liquid loading in the tubing, the well has demonstrated rates exceeding 4 mmscf/d, with stable production around 1 mmscf/d and 25 to 30 bbls/d of 100% condensate.

Recognizing the urgent need for gas storage in the region, NZEC is prioritizing the development of the Tariki gas storage project. The Company is proceeding with the design of the first stage of the project, focusing on the Tariki-5A and Tariki-1A wells. This initial phase will provide gas storage services to customers ahead of the larger second and third stage developments. Stage 1 targets injection rates of 10 to 15 mmscf/d and extraction rates of approximately 30 mmscf/d. A significant portion of the necessary infrastructure is already in place, with the remaining requirement being final stage compression at the well site. NZEC anticipates modifying an existing mobile compression unit currently at the Waihapa Production Station to fulfill this need.

The conversion of the Tariki Gas Field to gas storage mirrors the successful conversion of the nearby Ahuroa Gas Field, which shares similar geological characteristics. The Tariki field has produced approximately 50 billions per cubic feet (Bscf) of gas and is estimated to have a safe storage capacity of 25 to 40 Bscf.

The Ahuroa Gas Storage facility, with a capacity of approximately 18 Bscf, was sold for NZD 200 million in 2017. Since then, New Zealand gas prices have risen significantly, from around NZD 6.40 per mscf in late 2017 to over NZD 14 per mscf in January 2025. Crucially, seasonal price volatility has also dramatically increased, with winter 2024 prices peaking above NZD 40 per mscf. This heightened volatility further underscores the compelling need for additional gas storage capacity.

NZEC is accelerating the development of Tariki Gas Storage Stage 1, targeting the commencement of injection in Q4 2025.

In addition to the Tariki development, NZEC is focused on restoring oil production from the Waihapa 6A and H1 wells, anticipating a combined addition of 30 to 60 bbls/d of oil and associated gas by mid-to-late February.

The Company is also making progress on the Copper Moki Workover project in partnership with Monumental Energy (MNRG). Planning, procurement of long lead items, and contracting of the workover unit and personnel are well advanced, with commitments expected by the second week of February 2025.