2. Cautionary Notes
Forward-looking Statements
This document contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). The use
of any of the words “being”, “will”, “until”, “estimate”, “will be”, “is considering”, “will proceed”, “plans”, “reactivate”, “recommence”, “would be”, “could be”, “will bring”, “could bring”, “expected”,
and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events
to differ materially from those anticipated in such forward-looking statements. Such forward-looking statements should not be unduly relied upon. The Company believes the expectations reflected in
those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct. This document contains forward-looking statements and assumptions
pertaining to the following: business strategy, strength and focus; the granting of regulatory approvals; the timing for receipt of regulatory approvals; geological and engineering estimates relating to the
resource potential of the Properties; the estimated quantity and quality of the Company’s oil and natural gas resources; supply and demand for oil and natural gas and the Company’s ability to market
crude oil, natural gas and; expectations regarding the ability to raise capital and to continually add to reserves and resources through acquisitions and development; the Company’s ability to obtain
qualified staff and equipment in a timely and cost-efficient manner; the ability of the Company to obtain the necessary approvals and secure the necessary financing to conclude the acquisition of assets
from Origin on schedule, or at all; the ability of the Company to conclude the TWN Joint Venture on schedule, or at all; the ability of the Company’s subsidiaries to obtain mining permits and access
rights in respect of land and resource and environmental consents; the recoverability of the Company’s crude oil, natural gas reserves and resources; and future capital expenditures to be made by the
Company. Actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and elsewhere in the document, such as the
speculative nature of exploration, appraisal and development of oil and natural gas properties; uncertainties associated with estimating oil and natural gas resources; changes in the cost of operations,
including costs of extracting and delivering oil and natural gas to market, that affect potential profitability of oil and natural gas exploration; operating hazards and risks inherent in oil and natural gas
operations; volatility in market prices for oil and natural gas; market conditions that prevent the Company from raising the funds necessary for exploration and development on acceptable terms or at
all; global financial market events that cause significant volatility in commodity prices; unexpected costs or liabilities for environmental matters; competition for, among other things, capital,
acquisitions of resources, skilled personnel, and access to equipment and services required for exploration, development and production; changes in exchange rates, laws of New Zealand or laws of
Canada affecting foreign trade, taxation and investment; failure to realize the anticipated benefits of acquisitions; and other factors. Readers are cautioned that the foregoing list of factors is not
exhaustive. Statements relating to “reserves and resources” are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the
resources described can be profitably produced in the future. The forward-looking statements contained in the document are expressly qualified by this cautionary statement. These statements speak
only as of the date of this document and the Company does not undertake to update any forward-looking statements that are contained in this document, except in accordance with applicable securities
laws. More information is available in the Company’s Annual Information Form for the year ended December 31, 2012, filed on June 17, 2013 on SEDAR at www.sedar.com.
Reserve & Resource Estimates
The oil and gas reserve and resource calculations and net present value projections were estimated in accordance with the Canadian Oil and Gas Evaluation Handbook (“COGEH”) and National
Instrument 51-101 (“NI 51-101”). The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf: one bbl was used by NZEC. This
conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Reserves are estimated
remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on: the analysis of drilling, geological, geophysical,
and engineering data; the use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to the degree of
certainty associated with the estimates. Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves. Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual
remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Possible Reserves are those additional reserves that are less certain to be recovered
than probable reserves. There is a 10% probability that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves. Revenue projections
presented are based in part on forecasts of market prices, current exchange rates, inflation, market demand and government policy which are subject to uncertainties and may in future differ materially
from the forecasts above. Present values of future net revenues do not necessarily represent the fair market value of the reserves evaluated. Information concerning reserves may also be deemed to be
forward looking as estimates imply that the reserves described can be profitably produced in the future. These statements are based on current expectations that involve a number of risks and
uncertainties, which could cause the actual results to differ from those anticipated. Contingent resources are those quantities of oil and gas estimated on a given date to be potentially recoverable from
known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies.
Contingencies may include factors such as economic, legal, environmental, political and regulatory matters, or a lack of markets. Prospective resources are those quantities of oil and gas estimated on a
given date to be potentially recoverable from undiscovered accumulations. Undiscovered resources means those quantities of oil and gas estimated on a given date to be contained in accumulations yet
to be discovered. The resources reported are estimates only and there is no certainty that any portion of the reported resources will be discovered and that, if discovered, it will be economically viable
or technically feasible to produce.
2
3. Asset Overview
3
Permit Working
Interest
Net Acres 2P BOE
Reserves 1
Contingent
Resource 2
Prospective
Resource 2
Eltham 100% 93,166 708 Mboe - 31.6 MM bbl
Alton 65% 77,482 - - 45.0 MM bbl
Manaia 60% 16,456 - - Early stage
TWN 3 50% 11,525 1,072 Mboe 581 Mboe 11,771 Mboe
Ranui 100% 223,087 - - 40.5 MM bbl
Castlepoint 100% 551,045 - - 208.6 MM bbl
Wairoa 4 80% 214,290 - - Under review
East Cape 5 100% 1,067,495 - - 355.4 MM bbl
Total Acreage 2,254,546
1. Estimated by Deloitte LLP with an effective date of April 30, 2013. 2. Best estimate of contingent and prospective resources assuming 9% to 14%
recovery for conventional oil resources and 50% for gas resources. Estimated 2% recovery for unconventional oil resources. See detailed Reserve
and Resource tables and Cautionary Notes. 3. Acquisition of TWN Petroleum Licenses and Waihapa Production Station, and TWN Joint Venture,
pending. See Strategic Acquisition. 4. Acquisition of Wairoa Permit pending NZPAM approval. 5. Grant of East Cape Permit pending NZPAM
approval. 6. TWN Reserves and Resources will not transfer to NZEC until the Acquisition is complete and NZEC files an updated reserve report.
Eltham
Alton
Ranui
Castlepoint
East Cape
Conventional
Focus
Conventional and
Unconventional
Targets
Wairoa
TWN
Manaia
4. Transformative Acquisition / TWN Joint Venture 1
4
1. Closing of the TWN Joint Venture is subject to
government and regulatory approval and closing of the
Sale and Purchase Agreement with Origin. NZEC will
become the operator of all permits and assets. 2. LME is
paying 50% of the purchase price plus 50% of NZEC’s costs
incurred to date. 3. TWN reserves and resources shown at
a 100% basis, of which 50% will be attributable to NZEC
upon closing of the Acquisition and TWN Joint Venture.
2
3
3
3
5. L&M Energy and Geoff Loudon
Mr. Loudon is a New Zealand based international investor with family roots going back
to the Hokitika, NZ gold fields in 1875. He was the former Chairman of L&M Energy
(ASX, NZX) and completed a NZ$48 million takeover bid for LME through his privately
owned company, New Dawn Energy Limited, in January 2013. L&M Energy holds a
number of petroleum exploration permits on the North and South Islands of New
Zealand, including a 35% interest in NZEC’s Alton Permit.
Mr. Loudon is Chairman of Nautilus Minerals Inc. (TSX), a Canadian based seabed
minerals exploration company; was a founding director from 1995 to 2010 of Lihir Gold
Limited (ASX, TSX, NASDAQ), a PNG gold miner; and a founder and investor in Peru
Copper Inc. (TSX, AMEX).
Mr. Loudon is a mining professional with qualifications in geology, engineering and
international finance. He started his career as a geologist with the NSW Geological
Survey Australia, then worked with Placer Dome in Canada in operations, development
and exploration before starting a finance career with Kleinwort Benson, a UK merchant
bank. He then founded Niugini Mining which developed gold and copper mines in PNG,
Chile and Australia and discovered the Lihir gold deposit in PNG.
Mr. Loudon is a Fellow of the Australasian Institute of Mining & Metallurgy (AIMM), a
Member of the Canadian Institute of Mining (CIM) and a Member of the American
Institute of Mining Engineers (AIME).
5
6. Three new Petroleum Licences in the
main production fairway
• Near-term production potential from
existing wells
• New exploration opportunities
• 1,072,400 boe 2P Reserves 2
(89% liquids)
• 581,000 boe Contingent Resources 2
(28% liquids)
• 11,770,500 boe Prospective Resources 2
(31% liquids)
Full-cycle production facility central to
NZEC’s permits and other oil/gas fields
1. Closing of the Acquisition is subject to meeting the financing condition precedent
by August 14 and the government approval condition precedent by September 13,
in order to close the Acquisition by September 20, 2013. 2. Reserves and resources
reflect NZEC’s 50% working interest upon completion of the TWN Joint Venture.
The Petroleum Licences and attributable reserves and resources will not transfer to
NZEC until the Acquisition and TWN Joint Venture are complete. See TWN Reserves
and TWN Resources and Cautionary Notes.
6
Strategic
Acquisition1
7. Results of Extended Negotiation
• Reduced purchase price and simplified sale agreement 1
• L&M Energy to take 50% for $18.25 million = half of purchase price plus half
of NZEC’s costs incurred to date TWN Joint Venture
- Additional technical expertise provided by LME
- NZEC is operator of all permits and assets and able to charge a significant portion
of its G&A to the TWN Joint Venture and Waihapa Production Station
• TWN Joint Venture retains 100% of production from existing and new wells
in all formations subject to a 9% royalty payable to Origin 2
• Quantified reserves and resources on the TWN Licences will add
1,072,400 boe of 2P reserves to NZEC’s inventory (150% increase) plus
substantial resources 3
• Identified potential gas supply adequate to run Waihapa Production Station
and reactivate gas lift on Tikorangi wells 4
• Identified opportunities to use Waihapa Production Station to full capacity
7
1. See Comparison of Final and Original Acquisition Terms. Closing of the Acquisition is subject to meeting the financing condition precedent by August 14 and the government approval
condition precedent by September 13, in order to close the Acquisition by September 20, 2013 2. The Origin royalty is payable at 9% of net revenue (hydrocarbon sales less operating
expenses incurred between the point of valuation and the point of sale). The TWN Joint Venture may buy back at any time and from time to time up to 4% of the Origin royalty by paying
C$4.25 million per percentage point. The TWN Licences are also subject to a government royalty payable at 10% of net revenue as they are “grandfathered” under the 1937 Petroleum
Act. 3. See TWN Reserves and Cautionary Notes. Reserves and resources will not transfer to NZEC until the Acquisition and TWN Joint Venture are complete. Reserves and resources
reflect NZEC’s 50% working interest upon completion of the TWN Joint Venture 4. Gas supply dependent on outcome of NZEC/Contact gas throughput study and gas looping trial.
8. 8
Comparison of Final and Original Acquisition Terms 1
Final Terms Original Terms
Purchase price
• C$33.5 million (to be contributed 50/50 by NZEC and LME)
• No additional adjustments to purchase price
Purchase price
• C$42 million
• Additional C$9 million in adjustments at closing
(NZEC internal estimate)
Petroleum Licences
• Ultimate ownership of 50% interest in three Petroleum Licences: Tariki,
Waihapa and Ngaere (“TWN Licences”). The Ahuroa Licence will be
transferred to Contact Energy. Total acreage: 11,525 acres (46.6 km2)
Petroleum Licences
• NZEC purchasing four Petroleum Licences: Tariki,
Ahuroa, Waihapa and Ngaere. Total acreage:
26,907 acres (108.9 km2)
Royalty payable to Origin 2
• 9% net revenue royalty payable to Origin on all future hydrocarbon
production on the Licences
• TWN Joint Venture retains the ability to buy back up to 4% of the
royalty at any time for C$4.25 million per point
Royalty payable to Origin
• 5% net revenue royalty payable to Origin on all
future hydrocarbon production on the Petroleum
Licences
Commitments to Origin
• Simplified sale agreement
- NZEC retains 50% of production from all existing and new wells on
the TWN Licences in all formations, subject to the Origin Royalty
(and a 10% royalty payable to the NZ Government)
- Origin relinquishes all other rights and encumbrances on the TWN
Licences
Commitments to Origin
• NZEC responsible for 100% of costs associated with
drilling a well to the crestal interval of the Tikorangi
formation, with profits to be shared 50/50 with
Origin
• Origin retained rights to eight “option wells” for gas
storage
1. Closing of the Acquisition is subject to meeting the financing condition precedent by August 14 and the government approval condition precedent by September 13, in order to close the
Acquisition by September 20, 2013. 2. The Origin royalty is payable at 9% of net revenue (hydrocarbon sales less operating expenses incurred between the point of valuation and the point of
sale). TWN Joint Venture may buy back at any time and from time to time up to 4% of the Origin royalty by paying C$4.25 million per percentage point. The TWN Licences are also subject to a
government royalty payable at 10% of net revenue as they are “grandfathered” under the 1937 Petroleum Act.
9. Significant Growth in Reserves Post Acquisition 1
9
0
500
1000
1500
2000
2500
NZEC Reserves TWN Reserves Total NZEC Reserves
Post Acquisition
EstimatedReserves
Mboe
Proved Probable Possible
1. Reserves estimated by Deloitte LLP. NZEC reserves have an effective date of December 31, 2012 and are restricted to the Eltham Permit.
TWN Reserves have an effective date of April 30, 2013 and are restricted to the Tikorangi Formation on the Waihapa and Ngaere Permits. See
detailed Reserve tables and Cautionary Notes. Reserves reflect NZEC’s 50% working interest upon completion of the TWN Joint Venture. The
TWN Reserves will not be attributable to NZEC until the Acquisition closes and NZEC files an updated reserve report. See Strategic Acquisition.
1
10. TWN Reserve Estimate (100% basis) 1
10
Reserve Category Light &
Medium Oil
(Mbbl)
Natural
Gas
(MMcf)
Natural Gas
Liquids
(Mbbl)
Barrels of Oil
Equivalent
(Mboe)
NPV, Before
Tax (10%)
Proved Developed
(Non-producing) 983.7 762.0 26.7 1,137.4 $36,142,000
Proved Undeveloped 258.1 206.5 7.2 299.8 $7,340,000
Total Proved 1,241.8 968.5 33.9 1,437.1 $43,482,000
Probable 610.9 479.3 16.8 707.6 $19,393,000
Proved + Probable (2P) 1,852.7 1,447.8 50.7 2,144.7 $62,875,000
1. Reserve estimate completed by Deloitte LLP with an effective date of April 30, 2013. Reserves restricted to the Tikorangi Formation on
the Waihapa and Ngaere Permits. See Cautionary Note Regarding Reserve & Resource Estimates. Reserves will be attributable to NZEC
on a 50% basis when the Acquisition and TWN Joint Venture are complete and NZEC files an updated reserve report.
11. TWN Resource Estimate (100% basis) 1
Formation Product Type Low Best High
Contingent Resources
Miocene Sands (Mt. Messenger) Oil (Mbbl) 35 88 203
Eocene Sands (Kapuni Group)
Gas (MMcf – sales) 2,513 5,036 10,336
NGL (Mbbl) 101 233 525
Total BOE (Mboe) 567 1,162 2,426
Prospective Resources
Miocene Sands (Urenui, Mt. Messenger, Moki) Oil (Mbbl) 1,606 2,941 5,732
Eocene Sands (Kapuni Group)
Gas (MMcf – sales) 42,833 95,837 226,424
NGL (Mbbl) 1,909 4,498 11,375
Total BOE (Mboe) 10,825 23,541 54,368
Discovered PIIP
Miocene Sands (Mt. Messenger) Oil (Mbbl) 327 681 1,400
Eocene Sands (Kapuni Group) Gas (MMcf – raw) 7,211 13,770 26,935
Total BOE (Mboe) 1,529 2,976 5,889
Undiscovered PIIP
Miocene Sands (Urenui, Mt. Messenger, Moki) Oil (Mbbl) 11,315 20,442 37,804
Eocene Sands (Kapuni Group) Gas (MMcf – raw) 118,981 261,080 605,860
Total BOE (Mboe) 31,145 63,955 138,781
1. Resources estimated by Deloitte with an effective date of April 30, 2013 assuming 9 to 14% recovery for oil resources and 50% for gas resources. See Cautionary Note
Regarding Reserve and Resource Estimates. Resources will be attributable to NZEC on a 50% basis when the Acquisition and TWN Joint Venture are complete. 11
12. Valuable Upstream Assets
12
• Tariki, Waihapa and Ngaere petroleum
licences covering 23,049 acres, contiguous
with Eltham and Alton permits
• 23 MM bbl historical production from the
Tikorangi formation 2,144,700 boe 2P
Tikorangi reserves remaining (100% basis) 1
• Additional contingent and prospective
resources from other formations 1
• 16 established drill sites with oil and gas
gathering systems in place
Technical Data
• Well information from 27 existing wells
• 3D seismic covering southern half of the TWN
Licences
• 585 km 2D seismic
• TWN seismic has been merged with NZEC’s
existing seismic, providing seamless coverage
across TWN, Eltham and Alton permits
1. Reserve estimate completed by Deloitte LLP with an effective date of April 30, 2013. Reserves
restricted to the Tikorangi Formation on the Waihapa and Ngaere Permits. See Cautionary Note
Regarding Reserve & Resource Estimates. Reserves and resources will be attributable to NZEC
on a 50% basis when the Acquisition and TWN Joint Venture are complete and NZEC files an
updated reserve report.
Waipapa site
14. Historical Production – Tikorangi Formation
1. Select production data using publicly available information regarding wells that produced
oil on the TWN Licences.
Well name 1 Max bbl/d Total bbl produced
Ngaere-1 7,537 4,337,084
Ngaere-2 3,658 1,002,565
Ngaere-3 8,652 1,089,505
Toko-2B 298 126,286
Waihapa H-1 1,953 45,349
Waihapa-1B 4,804 4,909,317
Waihapa-2 3,182 4,798,752
Waihapa-4 2,674 2,990,189
Waihapa-5 979 91,055
Waihapa-6A 4,674 4,262,707
23 million bbl of historical production 1
14
15. Tikorangi Formation
Drill-proven formation
• 23 million bbl historical production from 17 wells 1
• Remaining 2P reserves estimated at 1,852,700 bbl oil,
1.45 Bcf gas, 50,700 bbl NGL (100% basis) 2
Recommence production from existing wells
• Six wells with reactivation potential
• Gas lift system in place, potential gas supply identified 3
• Gathering systems in place
• Near-term production potential, low cost
Drill crestal well into remaining reserves
• Significant opportunity to drill new wells to access
further identified oil accumulations in the Tikorangi
15
1. See History of TAWN Permits. 2. Reserve estimate completed by Deloitte LLP with an effective date of
April 30, 2013. Reserves restricted to the Tikorangi Formation on the Waihapa and Ngaere Permits. See
Cautionary Note Regarding Reserve & Resource Estimates. Reserves will be attributable to NZEC on a 50%
basis when the Acquisition and TWN Joint Venture are complete and NZEC files an updated reserve report.
3. Gas supply dependent on outcome of NZEC/Contact gas throughput study and gas looping trial.
16. Mt. Messenger Formation (Miocene Sands)
Drill-proven formation
• Significant discoveries to the west (TAG: Cheal),
south (NZEC: Copper Moki, Waitapu, Arakamu)
and east (Kea: Puka)
• Contingent resources: 88,000 bbl oil (100%) 1
• Prospective resources: 2,061,000 bbl oil (100%) 1
Low-cost production potential in existing wells
• Well information shows uphole completion
potential in six existing wells
• Drill pads and gathering systems in place
• Reduced drilling expense, expedited tie-in
New exploration opportunities
• More than 18 new Mt. Messenger leads
identified on 3D seismic
• Five high-priority targets at Waipapa site,
permitting complete
16
1. Prospective resources for Mt. Messenger formation only. Additional ~880,000 bbl prospective
resources estimated for Urenui and Moki formations. Resources estimated by Deloitte with an
effective date of April 30, 2013 assuming 9 to 14% recovery for P50 resources. See Cautionary
Note Regarding Reserve and Resource Estimates. Resources will be attributable to NZEC on a 50%
basis when the Acquisition and TWN Joint Venture are complete
Waipapa wellsite
17. Kapuni Group (Eocene Sands)
Drill-proven formation
• Kapuni Gas Field onshore oil/gas discovery
(Shell) producing since 1969, estimated
ultimate recovery of 1,365 billion cf (Bcf)
natural gas and 66 million bbl oil
• TWN Licences tested by four wells all
encountered gas in the Kapuni Group
2013 Deloitte Resource Estimate 1
• Contingent resource: 5.0 Bcf gas,
233,000 bbl NGL (100% basis) 1
• Prospective resource: 95.8 Bcf gas,
4.5 million bbl NGL (100% basis) 1
• Discovered PIIP: 13.8 Bcf gas (100% basis) 1
• Undiscovered PIIP: 261.1 Bcf gas (100% basis) 1
17
1. Resources estimated by Deloitte with an effective date of April 30, 2013 assuming 50% recovery for
P50 gas resources. See Cautionary Note Regarding Reserve and Resource Estimates. Resources will be
attributable to NZEC on a 50% basis when the Acquisition and TWN Joint Venture are complete.
18. History of TAWN Petroleum Licences 1
Tariki, Ahuroa, Waihapa and Ngaere Petroleum Mining Licences (“PMLs”)
• 1978 – Petroleum Corporation of New Zealand formed for NZ Government’s
petroleum exploration activities
• 1987 – Petrocorp publicly listed, Fletcher Challenge buys 15%, government
retains 70%, TAWN Permits granted to Petrocorp
• March 1988 – Fletcher Challenge buys remaining 70% of Petrocorp, assumes
ownership of TAWN Permits, becomes Fletcher Energy
• 1988-1998 – Petrocorp drills a number of wells, including 14 that produce oil
and gas, converts permits to PMLs
• October 2000 – Shell and Apache buy Fletcher Energy, Shell gets TAWN PMLs
• January 2002 – Swift Energy acquires TAWN PMLs and Waihapa Production
Station
• 2002-2006 – Swift Energy drills a number of wells, including three producers
• June 2008 – Origin Energy acquires Swift Energy’s NZ assets, sells inset permit
within Ahuroa PML to Contact Energy for gas storage usage (Origin owns 53% of
Contact)
• May 2012 – NZEC agrees to acquire TAWN assets
• June 2013 – NZEC / Origin / Contact finalize agreements for acquisition 2
• July 2013 – NZEC / L&M Energy enter into 50/50 joint venture 3
18
1. Based on publicly available information. 2. Closing of the Acquisition is subject to meeting the financing condition precedent by August
14 and the government approval condition precedent by September 13, in order to close the Acquisition by September 20, 2013. 3. Closing
of the TWN Joint Venture is subject to a number of conditions precedent. See Transformative Acquisition / TWN Joint Venture.
19. 19
Oil facility
• 25,000 bbl/d oil handling facility
• 7,800 bbl oil storage capacity
• 49-km 15,500 bbl/d oil sales pipeline
from Waihapa to Omata Tank Farm
Gas facility
• 45 mmcf/d separation and
compression capacity
• 70 tonne/d LPG processing capacity
• 51-km 8-inch gas sales pipeline from
Waihapa to New Plymouth
• Storage bullets for LPG
Water disposal operations
• 3,600 bbl water storage capacity
• 18,000 bbl/d water injection capacity
Waihapa Production Station Assets
Full-cycle facility with gathering and sales pipeline infrastructure
Includes 100 acres of fields providing a buffer zone surrounding the facility
1. Closing of the Acquisition is subject to meeting the financing condition precedent by August 14 and the government approval
condition precedent by September 13, in order to close the Acquisition by September 20, 2013
20. Production Facility: Buy vs Build
Waihapa Production Station 1 Neighbouring Production Facility 4
Gas processing 45 MMcf/day Gas processing 15 MMcf/day
Oil handling 25,000 bbl/day Oil handling 5,000 bbl/day
Water handling 18,000 bbl/day Water handling None
NGL recovery 70 tonne/day NGL recovery None
Pipelines 8” 49-km oil sales line to Omata Tank Farm
8” 51-km gas sales line to New Plymouth
Gas lift for Tikorangi wells
Pipelines 11-km gas line to New
Zealand’s open access
gas pipelines
Cost to buy C$33.5 million (contributed 50/50 by NZEC and LME)
• Includes 23,049 acres of Petroleum Licences
estimated to host 2,144,700 boe of 2P reserves
with $62.9 million NPV (before tax, 10% discount) 2
• Includes additional 1,162,000 boe contingent
resources, 23,541,000 boe prospective
resources 2
Cost to expand C$30 million
No exploration land
Cost to replace 3
+/- 30%
Oil plant: NZ$35.2 million, Gas plant: NZ$40.8 million
Gathering systems: NZ$70.6 million, Wellsite and satellite facilities: NZ$10.6 million
20
1. Closing of the Acquisition is subject to meeting the financing condition precedent by August 14 and the government approval condition precedent by September 13, in order to close the
Acquisition by September 20, 2013. 2. Reserves and resources will be attributable to NZEC on a 50% basis when the Acquisition and TWN Joint Venture are complete and NZEC files an updated
reserve report. See TWN Reserves and TWN Resources and Cautionary Notes. 3. Cost to replace NZEC plant and pipelines estimated by Strive Engineering effective July 18, 2012. 4. Information
regarding neighbouring production facility compiled using publicly available information.
21. Waihapa Production Station
Expedited tie-in of discoveries, midstream commercial opportunities
21
• Central to NZEC’s inventory of exploration
prospects
- Expedites tie-in of natural gas and liquids
- Reduces NZEC’s processing and transportation costs
- Gathering capacity in place to service NZEC’s oil and
gas production
- Sales pipelines in place to deliver NZEC production
to market
• Only open-access midstream facility in Taranaki
Basin business opportunities for processing and
handling third-party gas, liquids, oil and water
• NZEC / Contact study underway regarding gas
looping
• If successful, 6-month trial will commence to
achieve the following1:
- Blend NZEC’s liquid-rich gas for delivery to market
- Activate gas lift for Tikorangi wells to extract
additional oil and gas production
- Test economics of natural gas liquids extraction
1. Gas supply dependent on outcome of NZEC/Contact gas throughput study and gas
looping trial. There can be no certainty as to the tenure of the arrangement or that the
gas throughput trial will be successful.
23. Taranaki Basin – Current Portfolio
Conventional Focus
23
• NZEC controls three permits with
extensive 3D-identified leads
and prospects
• Four wells in production, two
wells awaiting artificial lift,
results pending from one
additional well 4
• Acquisition of assets from Origin
will add three new petroleum
licences, new drilling leads and
near-term production
opportunities 5
• 2D seismic database: 73,364 km
• 3D seismic database: 6,835 km2
187,104Net acres
843 MillionBarrels OOIP 3
77.1 MillionBarrels conventional
prospective resource 2
996,000Barrels oil equivalent
3P reserves 1
1. Reserves estimate by AJM Deloitte based on reservoir and production data from three Copper Moki wells and Waitapu well with a
December 31, 2012 effective date. See Reserve Estimates and Cautionary Note Regarding Reserve & Resource Estimates. 2. Net
Prospective Resource as identified by AJM Petroleum Consultants (best estimate) assuming 9% recovery. See Resource Estimates and
Cautionary Note Regarding Reserve & Resource Estimates. 3. Net Undiscovered Petroleum Initially in Place (OOIP) as identified by AJM
Petroleum Consultants. See Cautionary Note Regarding Reserve & Resource Estimates.
24. Building Inventory of Drilling Leads
Copper Moki area secured 100% for NZEC under new proposed mining permit
24
WaitapuCopper Moki
Arakamu
Wairere
Horoi
site
Waipapa
site
25. Drilling / Production Report Card
25
Well
Name
Target
Formation
Total
Depth
Status Total Oil Prod
(end June 2013)
Copper Moki-1
Copper Moki-2
Copper Moki-3
Copper Moki-4
Mt. M
Mt. M
Mt. M / Moki
Mt. M / Urenui
2,220 m
2,084 m
3,167 m
2,125 m
Producing since December 2011
Producing since April 2012
Producing from Mt. Messenger since July 2012
Urenui oil discovery, shut in pending further testing
108,846 bbl
87,126 bbl
42,326 bbl
Waitapu-1
Waitapu-2
Mt. M
Mt. M
2,213 m
2,084 m
Shut in pending further testing or sidetrack
Producing since December 2012 1 18,790 bbl
Arakamu-1A
Arakamu-2
Moki
Mt. M
2,900 m
2,380 m
Suspended, pending further evaluation
Oil discovery in April 2013, awaiting artificial lift
Wairere-1
Wairere-1A
Mt. M
Mt. M
1,971 m
2,152 m
Plugged back for sidetrack
Completion pending
Drilling / Production Report Card
1. Waitapu-2 was temporarily shut in at the end of May to allow the Company to analyze artificial lift options and perform tests related to the Copper Moki reservoir study.
• Engaged RPS, world-recognized leader in geological and reservoir evaluation, to undertake
comprehensive reservoir study to assist in optimizing production and go-forward strategy
26. Notes: Gross reserves before the deduction of royalty obligations payable to the New Zealand government. Numbers may not sum due to
rounding. Reserve estimates calculated by Deloitte. Mbbl – thousand barrels of oil. MMcf – million cubic feet of natural gas. Mboe –
thousand barrels of oil equivalent using a conversion ratio of 6 Mcf : 1 bbl. Barrels of oil equivalent (boe) may be misleading, particularly if
used in isolation. The boe conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead. Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of
proved plus probable plus possible reserves. See Cautionary Note Regarding Reserve and Resource Estimates.
NZEC Eltham Reserve Estimate
26
Proved Developed Producing 307.8 594.9 38.7 445.7 $14,400,000
Proved Undeveloped 20.6 31.9 2.0 27.9 $893,000
Total Proved 328.4 626.8 40.7 473.6 $15,293,000
Probable 158.3 329.6 21.5 234.7 $7,320,000
Proved + Probable 486.7 956.4 62.2 708.3 $22,613,000
Possible 195.6 398.1 25.8 287.8 $7,549,000
Proved + Probable + Possible 682.3 1354.5 88.0 996.1 $30,162,000
NPV, Before Tax
(10%)
Marketable Oil and Gas Reserves
As at December 31, 2012
Forecast Prices and Costs
Reserves Category
Natural Gas
Liquids (Mbbl)
Barrels Oil
Equivalent (Mboe)
Natural Gas
(MMcf)
Light & Medium
Oil (Mbbl)
28. East Coast Basin
Unconventional Opportunity
28
• World-class resource potential in
two oil shale packages
• 2 permits issued, 2 permits
pending 1
• Seeking partnerships to advance
permits
• 1.4 B bbl conventional PIIP 3
• 20.9 B bbl unconventional PIIP 3
• 2D seismic database: 9,479 km
• 3D seismic database: 662 km2
2.06 MillionNet acres 1
125.8 MillionBarrels conventional
prospective resource 2
478.7 MillionBarrels unconventional
prospective resource 2
1. Grant of East Cape Permit (100% ownership) pending Crown approval. Acquisition of Wairoa Permit (80% ownership) pending Crown approval. 2.
Net Prospective Resource as identified by AJM Petroleum Consultants (best estimate) assuming 9% recovery for conventional resources and 2%
recovery for unconventional resources. Does not include resource estimate for Wairoa Permit, which is under evaluation. See Resource Estimates and
Cautionary Note Regarding Reserve & Resource Estimates. 3. Net Undiscovered Petroleum Initially in Place (PIIP) as identified by AJM Petroleum
Consultants. See Resource Estimates and Cautionary Note Regarding Reserve & Resource Estimates.
29. East Coast Basin Oil Shales
• Over 300 oil and gas seeps sourced back to
two oil shale formations: Whangai and
Waipawa
- Whangai shale package estimated to be
300 – 600 metres thick
- Characteristics similar to Bakken
• Results from three stratigraphic wells and 70
km of 2D seismic on Ranui and Castlepoint
permits provide greater insight into unlocking
shale potential
• Two commitment wells required in Q4-2013
(one each on Ranui and Castlepoint)
• Retained Core Laboratories as technical
advisor to develop East Coast strategy
29
1. Acquisition of Wairoa Permit and grant of East Cape Permit pending Crown approval. Acquisition of TWN Petroleum Licenses
and Waihapa Production Station (in Taranaki Basin) pending. See Strategic Acquisition.
TAG pilot hole
30. Expanded East Coast Acreage – Wairoa Permit
• Wairoa Permit and surrounding area is most-
explored region of East Coast
• Log data from 16 wells and more than 500 km of
2D seismic shows both conventional and
unconventional opportunities
• NZEC’s technical team has worked extensively
on the property (as consultants)
- Seismic acquisition and interpretation
- Wellsite geology and prospectivity evaluation
- Permitting and land access agreements
- Consultation with community members, local
government, local iwi, service providers
• Established relationships with local communities
• Successfully acquired 50-km of 2D seismic,
technical studies and seismic processing
underway
30
Exploration wells drilled by Westech Energy New Zealand discovered
oil and natural gas, but did not make a commercial discovery
1. Acquisition of Wairoa Permit pending Crown approval. NZEC will own 80% and operate the permit, in partnership with Westech
Energy New Zealand.
31. Corporate Profile
31
1. As per Q1-2013 financial results. NZEC’s Q2-2013 results will be released in the last week of August.
2. NZEC’s wells are producing light (~40 API), high-quality oil that sells at Brent pricing. NZEC calculates its netback as the oil sale price
less fixed and variable operating costs and a royalty.
Common Shares Outstanding
Options (Exercisable at average $1.37)
Fully Diluted Shares Outstanding
122.0 million
9.9 million
131.9 million
Insider Ownership (fully diluted)
52 Week High / Low
Average Volume (Q1-2013)
~35%
$2.39 / $0.30
~450,000 shares/day
Current market cap (July 29, 2013) ~$40 million
Financial Highlights 1
Oil sold – during the period (incl. pre-production testing)
Oil sold – cumulative (incl. pre-production testing)
Cash flow from petroleum operations
Average realized oil price
Average netback 2
Cash invested in property, plant and equipment
Q1-2013
30,179 bbl
235,992 bbl
$1.2 million
$112.35/bbl
$45.29/bbl
$12.0 million
12 Months 2012
187,643 bbl
205,813 bbl
$13.8 million
$106.71/bbl
$70.08/bbl
$40.7 million
Estimated net working capital of $12 million (May 22, 2013)
32. Six Month Go-forward Plan
32
• Complete the TWN Acquisition and TWN Joint Venture
- Reactivate six existing Tikorangi oil wells using gas lift system
- Install high-volume downhole electric submersible pumps (ESPs) in two of the reactivation wells
- Come uphole in two existing wells and complete Mt. Messenger formation
- Commence six-month “looping” trial with Contact Energy based upon results of current study
- Develop plans to drill Tikorangi and Kapuni targets
• Drill Horoi South commitment well on the Alton Permit (65% working interest)
• Optimize Mt. Messenger strategy including all permits and TWN Petroleum Licences by
end of Q3-2013 (RPS evaluation) drilling program to follow
• Apply for mining permit for Copper Moki area
• Apply for second five-year term on Eltham and Alton permits, high-grading and retaining
50% of the permit area
• Continue to seek partners for East Coast properties to advance Wairoa, Castlepoint and
Ranui permits two commitment wells required by year-end (Castlepoint and Ranui)
• Finalize definition with NZPAM on what constitutes a “discovery” for unconventional
shales
• Progress East Coast strategy with technical input from Core Laboratories (Houston)
• Continue iwi engagement in advance of East Cape Permit award
34. Analyst Coverage
34
Company Analyst Contact
Canaccord Genuity Christopher Brown 403-508-3858
Credit Suisse David Phung 403-476-6023
Dundee Capital Markets David Dudlyke 44-203-440-6870
Haywood Securities Alan Knowles 403-509-1931
Mackie Research Bill Newman 403-750-1297
Macquarie Equities Research Dave Popowich 403-539-8529
M Partners David Buma 416-603-7381
35. Board of Directors
35
Name Expertise Experience
John A. Greig,
M.Sc, P.Geo
Chairman
• Founder and financier of numerous mining
and oil and gas companies. Specializing in
recognizing undervalued geological assets
• Founder, Director & Officer Sutton Resources, Cumberland
Resources Ltd., Eurozinc Mining Corp., Crown Resources Corp.
John G. Proust, C.Dir
CEO
Director
• Proven track record of building companies
from grass roots to advanced development.
Specializes in identifying undervalued assets
on a global basis
• Chairman, CEO & Director, Southern Arc Minerals Inc.
• Chairman, Canada Energy Partners Inc.
Bruce G. McIntyre,
P.Geol
Executive Director
• Professional petroleum geologist with over
30 years of proven exploration and
development oriented value creation
• President, CEO Sebring Energy Inc.
• President, CEO TriQuest Energy Corp.
• President, CEO BXL Energy Ltd.,
• Exploration Manager Gascan Resources Ltd.
Hamish J. Campbell
B.Sc (Geology),
FAusIMM
Director
• Professional geologist with 30 years of
experience managing exploration programs,
evaluation and assessment of joint ventures
and acquisitions
• Director of a number of New Zealand limited liability mineral
and petroleum companies
• Principal Indonesian mining service company
36. Experience with TWN Assets and Infrastructure
36
NZEC Position Years Relevant
O&G Experience
Years Experience
with TWN Assets
Previous TWN Associated Roles
Chris Bush, NZ
Country Manager
30+ 11 Country Manager (Origin), VP Facilities (Swift)
Mike Oakes, GM
Midstream Assets
35+ 8
NZ Asset Manager (Origin), Plant Super &
Commissioning Supervisor (Fletcher Energy)
Chris Ferguson, Chief
Financial Officer
11+ 14
Finance & Planning Manager (Origin), Accounting
Manager (Swift), TAWN JV Accountant (Fletcher
Energy)
Stewart Angelo,
Engineering &
Maintenance Manager
25+ 15
Maintenance & Engineering Consultant (Origin),
Maintenance Superintendent (Fletcher
Challenge)
Peter Kingsnorth,
Plant Superintendent
25+ 20
Shift Supervisor (Origin), Plant Operator (Fletcher
Challenge and Petrocorp)
Pono Cooper,
Field Superintendent
25+ 5 Well Site Supervisor (Swift Energy, Origin Energy)
37. Corporate Office – Canada
37
Name Expertise Experience
John G. Proust, C.Dir
Chief Executive Officer
• Proven track record of building companies from grass roots
to advanced development. Specializes in identifying
undervalued assets on a global basis
• Chairman, CEO & Director, Southern Arc Minerals Inc.
• Chairman, Canada Energy Partners Inc.
Bruce G. McIntyre, P.Geol
Executive Director
• Professional petroleum geologist with over 30 years of
proven exploration and development oriented value
creation
• President, CEO Sebring Energy Inc.
• President, CEO TriQuest Energy Corp.
• President, CEO BXL Energy Ltd.,
• Exploration Manager Gascan Resources Ltd.
Celeste M. Curran,
B.A. (Hon), L.L.B.
VP Corporate & Legal Affairs
• Over 20 years of legal and negotiating experience
specializing in major projects
• VP, Corporate & Legal Affairs, J. Proust & Associates
• Lead counsel for City of Vancouver and City of Richmond
for the 2010 Olympic and Paralympic Winter Games
• Senior Solicitor, City of Vancouver
Rhylin Bailie, B.ES
VP Communications &
Investor Relations
• More than 17 years of experience in the resource industry,
in both finance and investor relations
• Professional writer and editor
• Director Communications & Investor Relations, NovaGold
Resources Inc.
• Supervisor Treasury Administration, Placer Dome Inc.
Gerrie van der Westhuizen,
CA
VP Finance
• Chartered Accountant with expertise in financial reporting
and controls, equity offerings, treasury management and
debt structures, tax compliance
• Progressively senior positions with publicly-traded natural
resource companies
• Audit Manager, Mining Group, PricewaterhouseCoopers
Eileen Au, B.Sc
Corporate Secretary
• More than 16 years of experience overseeing corporate
governance and corporate affairs for publicly-listed resource
companies
• Corporate Secretary for various public and private
resource companies
• Director of Bryant Resources and Charlotte Resources
38. Operations Team – New Plymouth, NZ
38
Name Expertise Experience
Chris Bush, B.E (Hon)
New Zealand
Country Manager
• Chemical engineer with more than 30 years in both upstream and
downstream oil and gas experience internationally
• New Zealand Country Manager/Director, Origin Energy
• Chairman of Petroleum Exploration and Producers Association
of New Zealand
Chris Ferguson, CA
Chief Financial Officer
• Chartered accountant with 18 years of financial, accounting and
operational experience
• New Zealand reporting, SEC reporting, SOX 404 compliance
• Finance and Planning Manager, Origin Energy
• 13 years of oil and gas experience within the Taranaki Basin
Mike Oakes
General Manager
Midstream Operations
• More than 30 years of international oil and gas experience
overseeing design, commissioning and start up, staffing and
operation of oil and gas fields and production facilities
• Operations Manager, Asset Manager and Operational
Excellence Advisor, Origin Energy
• Technical Advisor, Total E&P Borneo
Cliff Butchko
P.Eng, MBA (Hon)
General Manager
Upstream Operations
• Professional engineer with over 30 years experience evaluating
and managing oil and gas resources
• President Omni Oil and Gas Inc.
• Vice President Lexoil Inc.
• Partner and Co-founder TIFF advisory group
• Senior technical positions in several resource companies
James Watchorn, B.Sc
Operations Manager
• Mechanical engineer with more than 15 years of experience in all
aspects of drilling, completions and production, and facility and
wellsite construction
• Production and Facilities Manager, TAG Oil
• Senior Petroleum Engineer, Origin Energy
• Operations Engineer, Iteration Energy/Chinook Energy
Stewart Angelo
Engineering & Maintenance
Manager
• 25 years in oil and gas midstream assets focused around
development and implementation of procedures and processes for
asset management systems
• Engineering Officer with New Zealand Merchant Navy
• Maintenance Engineer, Fletcher Challenge
• Director of Productive Maintenance
Toka Walden
Land Manager
• Senior Manager, New Zealand Dept. of Conservation
• Negotiating access provisions and facilitating resource
consent process, assisting with community relationship
building
39. Technical Team – Wellington, NZ
39
Name Qualifications Expertise
Dr. Ian Brown
B.Sc (Hons), M.Phil,
D.Eng, MIPENZ, C.P.Eng
Chief Operating Officer; professional geological engineer
June Cahill
B.Sc,
B. Applied Econ.
Acquisition, management, and analysis of complex geoscience data
Bill Leask
B.Sc (Hons)
M.Sc (Hons)
Petroleum geology related to the East Coast and other New Zealand basins
Dr. Simon Ward
B.Sc (Hons)
Ph.D
Petroleum geology related to the Taranaki and other New Zealand basins
Ian Calman B.Sc (Hons) Seismic data acquisition, processing, and interpretation
Gareth Reynolds B.Sc (Hons) Geology Geoscientist with experience in New Zealand Basin analysis
Dr. Richard Kellett
B.Sc (Hons), Ph.D,
P.Geoph
Geoscientist with worldwide exploration and business development experience
Monmoyuri Sarma
B.Sc (Hons), M.Sc
(Petroleum Geosciences),
M.Sc (Applied Geology)
Geoscientist with experience with reservoir modelling and petroleum system
analysis
Peter Wood
B.E (Hons), B.Sc ,
M.Comp.Sci
Management and development of computing resources for geoscience
applications
Sam Pryde
B.Sc
Post.Grad.Dip.
Geological investigations in the East Coast basin area
41. New Zealand Advantage
• Proactive Government approach to
exploration and development
• Favorable tax and royalty structure
28% corporate tax, royalty higher
of 5% of net revenue or 20% of net
accounting profits 1
• Brent pricing environment
• Proven hydrocarbon systems with
multi-zone potential
• Established infrastructure with
capacity
• New Zealand Government goal of
energy self sufficiency by 2030
significant in-country demand for
both oil and gas
41
1. The Company’s permits and licences are subject to the following Government royalties: (1) exploration permits: 5% of net
revenue (hydrocarbon sales less operating expenses incurred between point of valuation and point of sale); (2) mining
permits: greater of 5% of net revenue or 20% of net accounting profits (including deductions for capital costs); (3) TWN
Licences: “grandfathered” under 1937 Petroleum Act, 10% of net revenue.
42. Contact NZEC
42
Corporate Head Office
John Proust, Chief Executive Officer
Bruce McIntyre, Executive Director
Rhylin Bailie, VP Investor Relations
North America Toll-free: 1-855-630-8997
info@newzealandenergy.com
New Zealand Office
Chris Bush, New Zealand Country Manager
Tel: + 64-6-757-4470
New Zealand Toll-free: 0800-469-363
www.NewZealandEnergy.com
