Mr. James Willis reports
NEW ZEALAND ENERGY CORP ANNOUNCES 2019 END OF YEAR RESULTS
New Zealand Energy Corp. has filed with Canadian regulatory authorities its 2019 consolidated financial results, management's discussion and analysis, and Form 51-101 reserves report, which documents are available on the company's website and on SEDAR.
Commenting on the company's end-of-year 2019 results, chairman James Willis said, "The results saw a loss of $1,624,881 (2018 loss of $996,660), which was substantially attributable to non-cash expenses, including depreciation and depletion."
There was a small ($237,790) increase in cash. An amount of $1,474,809 was held as at Dec. 31, 2019, with modest development expenditure ($21,095) paid in the quarter. Production was down as a result of a hole identified in the tubing in Ngaere-1, above the electric submersible pump. The Copper Moki wells continued to perform well during 2019, with regular condensate flushes removing wax and sand disposition and increasing productivity.
Cash provided by operating activities was $787,751, compared with 2018 when $1,750,824 of cash was provided by operations. The company achieved average net daily production of 158 barrels of oil equivalent per day (99 per cent oil) through 2019 compared with 164 boe per day (93 per cent oil) during 2018.
The company has been through a difficult period since the start of 2020. The COVID-19 pandemic and its effect on the price of oil required management to act decisively. As announced on March 24, 2020, the company implemented a low-cost mid-stream-focused operating mode. These measures have included the elimination of all non-essential capital expenditures and a reduction in operating costs by ceasing to use gas lift to sustain production from the Waihapa and Ngaere wells. These wells are now produced on a cyclic basis.
The company has also implemented a restructuring of the business, which has involved a reduction in manpower and a change to shift patterns at the plant. The company is continuing to direct its efforts to increasing revenues from third party services.
As to the future, Mr. Willis commented: "The company is considering new opportunities, with a particular focus on bypassed gas and gas storage projects at Tariki, the duration of which was extended in June, 2020. The forward plan is to acquire seismic at Tariki in [first quarter] 2021."
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