New Zealand Energy Corp. (“NZEC”) has commenced drilling operations at the Tariki-5 conventional gas well, located in the Taranaki region of northern New Zealand. The project is being carried out in partnership with L&M Energy Limited, with each company owning 50% of the joint venture. Monumental Energy Corp., which owns an 8.63% stake in NZEC, sees this development as strategic to strengthen its presence in the New Zealand gas sector. The drilling aims to reach a total depth of 2846 meters in 27 days.
The well is designed to target two distinct geological formations. The first section of the well targets the Tikorangi limestone, a secondary reservoir, which will be crossed from October 12 to 14, 2024. This phase is mainly oriented towards the collection of geological data. The second formation, the Tariki Sandstone, represents the main focus. Scheduled between October 16 and 21, 2024, this segment will be evaluated to estimate exploitable gas reserves. The success of this campaign could provide NZEC with additional financial leverage in its regional operations.
Integration into the existing gas network
Gas from Tariki-5 is expected to be transported quickly to the New Zealand mainline. NZEC has already finalized the necessary agreements for gas transportation, facilitating the immediate marketing of extracted volumes. Genesis Energy, one of the main buyers, has been confirmed as the main customer for the produced gas. This agreement reduces marketing risks while ensuring more predictable profitability for the project.
Monumental Energy, for its part, is carefully observing the evolution of these operations. With an average acquisition cost of $0.46 per share, the success of the project could lead to a revaluation of its portfolio. This strategy allows Monumental to diversify its assets in a market with growing demand, while supporting the local development of gas resources. This positioning is particularly relevant in the current context where natural gas remains a key component of New Zealand’s energy mix.
Production lead times and short-term outlook
Forecasts indicate that all drilling and well completion operations will be completed by October 26, 2024. Once this milestone is reached, production tests will be carried out to evaluate the performance of the well. If the results prove to be in line with expectations, the gas could be put into production as early as mid-November. This speed of execution is facilitated by the presence of infrastructure already in place, allowing smooth integration into the national network.
The New Zealand natural gas market is currently marked by sustained demand, driven by growing energy needs and efforts to secure local supply. NZEC, in partnership with L&M Energy, could capitalize on this favorable context. The joint venture’s development strategy aims to increase local production and reduce dependence on imports. Next steps will also include additional perforations and site optimization to maximize resource recovery.
Financial issues and growth opportunities
The success of Tariki-5 could also open up new opportunities for the partners involved. Monumental Energy could consider increasing its participation in the event of positive results, while securing outlets for possible future projects. The Taranaki region remains one of New Zealand’s most explored sedimentary basins, and this development could encourage other players to step up investment in the sector.
This project is being closely watched by investors because it reflects the current dynamics of the New Zealand gas sector. If throughput tests confirm initial predictions, it could increase the region’s attractiveness for new exploration and production projects. In the medium term, the results of Tariki-5 will serve as a reference to assess the commercial potential of similar training courses.
