Despite concerted efforts to push greener technologies, there is no denying that oil demand is still incredibly strong. In the words of the US Department of Energy, it is "the lifeblood of modern civilization." The fact is that oil supplies almost 40% of the global energy needs and the vast majority of all forms of transportation.
While oil production will not run low for many, many years with regards to the world’s reserves, energy companies are running a bit thinner on low-cost oil production which sends them scavenging the earth for places where it can be produced as inexpensively as possible.
A country that relies heavily on oil imports, but is in the process of boosting production is New Zealand, a country of modest oil and gas exploration, but strong promise. Looking to capitalize on all that the small country has to offer in oil reserves is New Zealand Energy Company (TSX-Venture:NZ), an oil and natural gas company with several exploration and development prospects in New Zealand.
This new firm was founded just over one year ago, and its IPO completed for net proceeds of $20 million on August 3, 2011. NZ has moved quickly to put its business strategy into action while still private with the first drilling on the Copper Moki-1 discovery well on Eltham Permit happening in January 2011.
To date, NZ holds 100% interest in three onshore permits totaling 7,452 square kilometres (over 1.8 million acres) in New Zealand’s East Coast Basin. Additionally -- and tapping into a touted area of the country for oil potential, the Company holds two large permits, Eltham and Alton (currently under a letter of intent, transaction still to close), totaling more than 850 net square kilometres (211,522 net acres) directly offsetting known production and reserves in the Taranaki Basin.
Today, the Company released news on its 100%-owned Copper Moki-1 well in the Taranaki Basin stating that it has completed its well and initiated the steps to obtain a mining permit to achieve long-term production. According to the news, the "well production tested the Mt. Messenger formation over a 48-hour period and flowed 41.8 API oil at a consistent rate of 1,100 barrels per day along with 855 mcf(2) per day of natural gas."
Additional data on the well is in place with pressure recorders already having been run for an extended build-up as the well will be placed on an extended production test to determine the reservoir size and flow conditions.
New Zealand Energy Co. has already entered a contract to sell its test volumes at a premium to Brent Crude oil prices.
Investors who snagged NZ at the IPO price as well as those who joined in a private placement in January 2011 ($0.25 per share) and February 2011 ($0.75 per share) have been rewarded already for their faith in NZ management and its strategies. Shares rose again Wednesday to an all-time high of $1.29 before settling to close at $1.25.
