Monumental Energy Corp. (“Monumental” or the “Company”) (TSX-V: MNRG; FSE: ZA6; OTCQB: MNMRF) is pleased to provide positive updates on its investment and partnership with New Zealand Energy Corp. (“NZEC”) (TSXV.NZ).
As reported by NZEC on February 11, 2025:
TARIKI-5A
NZEC confirms that the recently completed Tariki-5A well has intersected the target Tariki sands, 11-metres higher than previous wells, confirming significant remaining free gas and condensate up-dip in the field. The quality of the 55-metres of net sand confirms Tariki's viability as a gas storage field, with updates on reserves and forecasts currently in progress. Work is in progress to update the associated reserves and associated forecasts.
Initial flow rates from the well were below expectations due to technical challenges which include liquid loading in the 3 ½” tubing and difficulties in managing liquids slugging at Waihapa after ~30km of pipeline. While rates more than 4mmscf/d have been seen, stable rates have been approximately 1 mmscf/d with 25 to 30 bbls/d of condensate (100%). Efforts are underway to increase production.
GAS STORAGE DEVELOPMENT
To expedite the high-value storage phase of the Tariki field, NZEC is moving forward with designing the first stage of the injection & extraction gas storage project, centered around wells Tariki-5A and Tariki-1A. This initial phase will lay the groundwork for the comprehensive storage project, offering early gas storage solutions to customers before the development of the second and third stages. The specifications for Stage 1 are still being defined, but the goal is to achieve injection rates of 10 to 15 mmscf/d and extraction rates of approximately 30 mmscf/d. The majority of the infrastructure needed for Stage 1 is already established, except for the final stage compression at the well site. It is anticipated that an existing mobile unit at the Waihapa Production Station can be adapted to meet the wellsite compression requirements.
The transformation of the depleted Tariki Gas Field into a gas storage facility closely follows the model set by the conversion of the neighboring Ahuroa Gas Field more than a decade earlier. Both fields are situated within the over-thrust structure of the Tariki Sandstone at comparable depths. The Tariki Gas Field, which originally produced around 50 Bscf of gas, is now estimated to have the capacity to safely store between 25 and 40 Bscf of gas.
The Ahuroa Gas Storage facility, with a capacity of approximately 18 Bscf, was sold as a working facility by Contact Energy Ltd. To Gas Services New Zealand Ltd in late 2017 for NZD 200 million. It is important to note that the capacity at Ahuroa is fully contracted to two parties. Following the sale of Ahuroa, there has been a significant increase in gas prices in New Zealand—from approximately NZD 6.40/mscf at wholesale in late 2017 to over NZD 14/mscf in January 2025. Additionally, the seasonal price volatility has intensified, with prices peaking at over NZD 40/mscf during the winter of 2024. This escalation underscores the growing necessity for expanded gas storage capacity.
The pressing need for additional storage due to the tightening New Zealand gas market has accelerated the first stage of the Tariki Gas Storage project, with plans to start gas injection by Q4 2025.
Following the completion of the Tariki-5A well operations, NZEC has prioritized restoring oil production from the key Waihapa wells 6A and H1. NZEC expects these wells to resume production by mid to late February, contributing an additional 30 to 60 barrels of oil per day, along with associated gas.
Max Sali, VP Corporate Development and Director commented, “New Zealand's gas market faces increased prices and volatility, the strategic importance of enhancing storage and production capabilities cannot be overstated. I applaud NZEC for fast-tracking its Tariki gas storage project, which will not only benefit our shareholders but also promote a more stable energy future for New Zealand.”
COPPER MOKI
The planning and procurement stages for the Copper Moki workover project, in collaboration with its partner and operator NZEC, is progressing as planned. Currently in the advanced stages of securing long lead items and contracting the necessary workover unit and personnel, NZEC expects to finalize these commitments by the second week of February 2025.
The Copper Moki Project involves interventions on two wells, presently scheduled for production in April 2025. The timeline for these operations is largely dependent on the timely delivery of essential materials, specifically the 2 7/8” tubing, to our local facilities. The successful execution of these interventions’ hinges on the arrival of these materials.
The activities planned for the workovers is expected to add combined oil rates exceeding 100 stb/oil along with associated gas production. Historical data from the last full pump change at Copper Moki-2 showed flush oil production rates exceeding 250 stb/d. Based on these precedents, NZEC is optimistic that similar results will be achieved once Copper Moki-1 and Copper Moki-2 are brought back online. It’s anticipated that the two wells could yield combined oil rates in excess of 300 stb/d for a duration of one to two months, starting in late April 2025. The project is expected to complete within three weeks, after which Monumental will first recoup 75% of the net revenues from oil and gas sales, followed by transitioning to a 25% royalty model.
WARRANT REPRICING
The Company also announces that, further to its January 21, 2025 news release, the TSX Venture Exchange has approved the amendment of a total of 17,120,284 share purchase warrants (the “Warrants”) to reduce the exercise price of the Warrants from $0.30 to $0.25 per share. 5,646,000 of the Warrants were originally issued by the Company pursuant to a non-brokered private placement on March 3, 2023 with an expiry date of March 3, 2026 and 11,474,284 of the Warrants were originally issued by the Company pursuant to a non-brokered private placement on April 11, 2023 with an expiry date of April 11, 2026.
