New Zealand Energy says it begins completion of fifth well at Taranaki Basin

New Zealand Energy Corp. (CVE:NZ)(OTCQX:NZERF) says it has started the completion of its fifth well in the Taranaki Basin of New Zealand, achieving the targeted depth of Waitapu-1. 

The company said Thursday it has evaluated open hole logs of the well, and has started casing, with completion to follow. 

Waitapu-1 was drilled through the Urenui formation into the Mt. Messenger formation with a measured depth of 2,213 metres and true vertical depth of 1,925 metres, the New Zealand-focused oil and gas producer said. 

The company plans to perforate and test the Mt. Messenger formation. Following perforation, the rig will be repositioned on the same drill pad to finish drilling Waitapu-2, which has been drilled and cased to 300 metres using a smaller rig. 

The newly-established Waitapu site, which includes the Waihapa Production Station, sits approximately 1.3 kilometres south of the company's Copper Moki site in the Taranaki Basin, where it has three producing wells.  

The prime location of the Waihapa production station reduces transportation and processing costs for the company's oil and gas production. Waihapa is the only open-access midstream facility in the Taranaki Basin, and gives New Zealand additional opportunities for processing third-party gas, liquids, oil and water. 

The company's property portfolio covers nearly two million acres of conventional and unconventional prospects in the Taranaki Basin and East Coast Basin of New Zealand’s North Island. 

A large chunk of the company's properties are located at Taranaki, which is situated on the west coast of the North Island and is currently its only oil and gas producing basin, producing roughly 130,000 barrels of oil per day from 18 fields.

Its Copper Moki-3 well flowed 7,456 barrels and 4,765 thousand cubic feet of natural gas during production testing in the second quarter, and began continuous production on July 2. 

The company generated positive cash flow from production in the second quarter of $5.4 million, resulting from netbacks of U.S. $78.12 per barrel. Its aim is to drill eight additional conventional wells and increase production to 3,000 barrels of oil equivalent per day by year-end 2012.