Ann: MINE: NZO: 34.7% Increase in Kupe Developed Reserves

• Release Date: 28/10/15 09:07
• Summary: MINE: NZO: 34.7% Increase in Kupe Developed Reserves
• Price Sensitive: No
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					NZO
28/10/2015 09:07
MINE
PRICE SENSITIVE
REL: 0907 HRS New Zealand Oil and Gas Limited

MINE: NZO: 34.7% Increase in Kupe Developed Reserves

New Zealand Oil & Gas has materially upgraded its developed reserves in the
Kupe gas and light oil field off Taranaki, New Zealand.

Following a review by New Zealand Oil & Gas, the company's 2P developed
reserves have increased by 34.7 per cent, from 4.2 million barrels of oil
equivalent to 5.6 million.

This reserves increase not only provides additional volume from within the
existing development but it's expected that contracted volumes will be able
to be supplied without the need for significant additional capital.

New Zealand Oil & Gas chief executive Andrew Knight says the reserves upgrade
is significant news for the company.

"Optimising performance in existing assets is a strategic priority for New
Zealand Oil & Gas. Kupe is a quality asset and it is pleasing to announce an
increase in reserves that does not require additional capital to realise."

Undeveloped reserves of 3.2 million barrels, which were included in the
company's total Kupe 2P reserves at 30 June 2015, are the subject of further
work to assess options for developing potential additional reserves. New
Zealand Oil & Gas believes the undeveloped reserves will remain in line with
this estimate, if the existing development plans are carried forward. The
additional work may provide material additional reserves provided economic
assessments support development. An update of the total developed and
undeveloped reserves will be provided on completion of this work, which is
expected in the second quarter of 2016.

New Zealand Oil & Gas earned $62.5 million in revenue from Kupe in the
2014-15 financial year. Its share of production from Kupe was 242,417 barrels
of oil, 3.6 petajoules of gas, and 15,391 tonnes of LPG.

New Zealand Oil & Gas has a 15% interest in Kupe. The other Kupe partners are
Origin Energy, 50% (Operator); Genesis Energy, 31%; and Mitsui, 4%.

New Zealand Oil & Gas share

Previous 2P Developed Reserves at 30 June 2015 Previous
2P Developed Reserves less production since 1 July 2P Developed Reserves at
1 Oct 2015 Change %
Sales Gas (PJ)
18.4 17.4 23.3 5.9 34.0%

LPG - Kilotonnes
79.9 75.7 97.4 21.7 28.7%

Light oil - million barrels
0.8 0.7 1.0 0.3 43.2%

Millions of barrels of oil equivalent
4.4 4.2 5.6 1.4 34.7%

Reserves are quantities of petroleum anticipated to be commercially
recoverable from known accumulations from a given date forward; that are
judged to be discovered, recoverable, commercial and remaining. Probable (2P)
reserves have a 50 per cent chance or better of being technically and
economically producible.

Developed reserves are expected to be recovered from existing wells and
facilities. Undeveloped reserves are quantities expected to be recovered
through future investments (e.g. new wells, compressors, and other
facilities). Total reserves are the sum of developed and undeveloped reserves
at a given level of certainty.
Oil and gas reserves reported in this statement are as at 1 October 2015.

The Kupe estimate is based on production data and compositional simulation
models provided by the field operator, Origin Energy. It is the result of
deterministic reservoir simulation modelling, matched with full production
history on a well-by-well basis, in addition to decline curve analysis,
supported by rate transient analysis, and both flowing and static material
balance.

Estimates of reserves are based on their value in use with a discount rate of
10% applied. The oil price assumptions are based on the Bloomberg consensus
mean, with contracted volumes of gas and LPG sold on current contract terms.
For volumes in excess of current contracts, a future base market price of
$6/gigajoule is assumed for gas sales and LPG prices are linked to the
Bloomberg consensus mean forecast for oil.

This reserves statement is approved by, based on, and fairly represents
information and supporting documentation prepared by New Zealand Oil & Gas
Vice President & General Manager, Exploration & Production Andrew Jefferies,
B Eng (Mech Hons), MSc Pet Eng, MBE, and SPE (Society of Petroleum Engineers)
Certified Petroleum Engineer with over 23 years of industry experience.
End CA:00272402 For:NZO    Type:MINE       Time:2015-10-28 09:07:17