New Zealand Energy Second Quarter Financial Results and Projects Update

New Zealand Energy Corp. ("NZEC" or the "Company"), an oil and natural gas
company with exploration and development prospects in New Zealand, has released
the results of its second quarter ended June 30, 2011. Details of the Company's
financial results are described in the Unaudited Consolidated Financial
Statements and Management's Discussion and Analysis which, together with further
details on each of the Company's projects, are available on the Company's
website at www.newzealandenergy.com and on SEDAR at www.sedar.com. All amounts
are in Canadian dollars unless otherwise stated.


NZEC has completed a number of significant milestones and we are moving quickly
toward our objective of becoming New Zealand's next oil and natural gas
producer. In early August we completed our initial public offering and commenced
trading on the TSX Venture Exchange. The $20 million raised in the IPO has left
us well positioned to complete our first discovery well and execute an
aggressive exploration strategy, with four more wells planned by year end. 


The Copper Moki-1 well, NZEC's first discovery well, was production tested
earlier in August over a 48-hour period and flowed 41.8 API  oil at a consistent
rate of 1,100 barrels per day along with 855 mcf  per day of natural gas. The
well will be placed on an extended production test to determine the reservoir
size and flow conditions and NZEC has entered into a contract to sell its test
volumes of oil at a premium to the Brent reference price . NZEC's in-country
team has initiated the steps to obtain a mining permit to achieve long-term
production, and is actively engaging with local communities as the project
advances.


The Copper Moki-1 well was completed in three sands over an interval of 12.2
metres within the Mt. Messenger Formation in New Zealand's Taranaki Basin. The
Taranaki Basin currently produces all of New Zealand's oil and gas, producing
approximately 55,000 barrels of crude oil per day and 460 million cubic feet per
day of natural gas. NZEC has identified additional prospective zones within the
Copper Moki-1 area and plans to drill three additional wells in the Taranaki
Basin by year end. 


On its East Coast Basin properties, NZEC will re-enter the Ranui-1 well in
Q4-2011 to deepen the well through the Whangai Formation oil shale and collect
core for analysis. Originally drilled by the previous owner in 2008 to a depth
of 1,135 metres, Ranui-1 encountered 224 metres of prospective Whangai Shale. On
the company's Castlepoint Permit, NZEC will core two test holes to determine the
thickness and reservoir characteristics of the two prospective oil shale
formations, the Waipawa and the Whangai. NZEC plans to explore this area using
modern North American technology that has proven highly successful in developing
North America's shale targets, such as the Bakken Formation. There are 300 known
oil and natural gas seeps in the East Coast Basin that have been proven to
originate from the oil shale formations in the area. 


With nearly two million acres of exploration permits, an extensive database of
exploration data compiled over more than 25 years and an exceptional technical
team, NZEC is well positioned to become a significant player in the oil and gas
industry. We look forward to reporting progress to our shareholders as the
projects advance.




(1) American Petroleum Institute
(2) Thousand cubic feet
(3) The reference against which two thirds of the world's internationally
    traded crude oil supplies are priced.



FINANCIAL SNAPSHOT



---------------------------------------------------------------------------
                                     For the six months   For the financial
                                                  ended        period ended 
                                          June 30, 2011   December 31, 2010
---------------------------------------------------------------------------
Revenue                                               -                   -
Net loss and comprehensive loss            $ (2,652,278)      $ (10,338,136)
Interest income                                  26,676                   -
Loss per share - basic and diluted                (0.04)              (0.24)
Current assets                                5,630,748           6,229,650
Total assets                                 10,683,239           6,301,322
Total liabilities                               416,153             371,958
Shareholders' equity                         10,267,086           5,929,364
---------------------------------------------------------------------------



RECENT DEVELOPMENTS



--  On July 7, 2011, NZEC and Discovery Geo Corporation ("Discovery Geo")
    entered into an indemnity agreement pursuant to which Discovery Geo
    agreed to indemnify NZEC against any claims for existing royalties or
    the right to receive future royalties in excess of 3% on the Ranui
    Permit (exclusive of the 5% royalty payable to the Crown).

--  On July 14, 2011, NZEC, AGL Upstream Gas (MOS) Pty Limited ("AGL") and
    L&M Energy Limited ("L&M") entered into an agreement pursuant to which
    AGL assigned its 50% interest in the Alton Permit joint venture to NZEC.
    In addition, pursuant to this agreement, L&M waived its pre-emptive
    rights in respect of the Alton Permit and consented to the sale of AGL's
    interest in the Alton Permit. On July 26, 2011, the Corporation
    announced the completion of drilling of the Talon-1 exploration well on
    the Alton Permit. Funding 100% of the drilling costs (estimated at
    $2,400,000) was a condition of the Corporation's acquisition of its 50%
    working interest in the permit and the Corporation has assumed
    operatorship of the permit. The Corporation has no further earning
    obligations pursuant to the assignment from AGL.

--  On August 3, 2011 (the "Listing Date"), the Corporation completed its
    initial public offering of 20,000,000 common shares at $1.00 per common
    share (the "Offering Price") for gross proceeds of $20,000,000 (the
    "Offering") and commenced public trading on the TSX Venture Exchange
    (the "Listing"). Under the symbol "NZ", the Offering was completed
    through a syndicate of agents (the "Agents"). The Agents were granted an
    over-allotment option to subscribe for an additional 3,000,000 common
    shares, on the same terms, at any time up to 30 days after the Listing
    Date. The Agents received a 6% commission on the proceeds of the
    Offering, which was paid in cash and common shares. Warrants were also
    issued totalling 3% of the common shares issued pursuant to the
    Offering, and are exercisable at $1.00 for a period of 18 months from
    the Listing Date.

--  On August 3, 2011, the Corporation granted stock options to directors,
    officers and consultants to purchase an aggregate 4,828,000 common
    shares at the Offering price for a period of five years from the Listing
    Date. These stock options will vest over a 24-month period, with 25% of
    the stock options vesting every six months after the Listing Date.

--  On August 3, 2011, NZEC paid US$500,000 to Discovery Geo as partial
    payment of the purchase price for the Ranui Permit. On August 24, 2011,
    the Corporation paid the remaining US$500,000 and initiated the issuance
    of 1,000,000 common shares for final consideration to of the Ranui
    Assignment Agreement.

--  On August 24, 2011, the Corporation announced that the Copper Moki-1
    well was production tested earlier in August over a 48-hour period and
    flowed 41.8 API oil at the consistent rate of 1,100 barrel per day along
    with 855 mcf per day of natural gas. The well will be placed on an
    extended production test to determine the reservoir size and flow
    conditions and NZEC has entered into a contract to sell its test volumes
    of oil at a premium to the Brent reference price.



PROPERTY REVIEW

Within the Taranaki Basin, the following PEPs have been, or are in the process
of being, acquired:




1.  On March 3, 2011, New Zealand's Minister of Energy granted an assignment
    of the Eltham Permit to NZEC. The Eltham Permit covers approximately
    92,467 acres (374 km(2)) of which approximately 31,877 acres (129 km(2))
    are offshore in shallow water.  
    
2.  On June 24, 2011, NZEC entered into the Alton Agreement with AGL
    pursuant to which the Corporation will acquire a 50% interest in the
    Alton Permit and associated joint venture with L&M, which owns the other
    50% of the permit. The Alton Permit is adjacent to the Eltham Permit and
    covers approximately 119,203 acres (482 km(2)).



Within the East Coast Basin, located on the east coast of New Zealand's North
Island, the following PEPs have been, or are in the process of being, acquired:




1.  On November 24, 2010, the Minister of Energy granted the Castlepoint
    Permit to NZEC. The Castlepoint Permit covers approximately 551,042
    onshore acres (2,230 km(2)). 

2.  On February 22, 2011, NZEC entered into a permit acquisition agreement
    with Discovery Geo, pursuant to which Discovery Geo has agreed to assign
    its 100% interest in the Ranui Permit to NZEC upon completion of certain
    conditions. The Ranui Permit is adjacent to the Castlepoint Permit and
    covers approximately 223,087 acres (903 km(2)). The Corporation must
    undertake certain geophysical and geochemical studies prior to re-
    entering a suspended well on the property. 

3.  On September 3, 2010, NZEC applied to the Minister of Energy for the
    East Cape Permit. The application is uncontested and the Corporation
    expects the East Cape Permit to be granted to NZEC upon completion of
    Crown Mineral's review of the application. The East Cape Permit covers
    approximately 1,067,495 onshore acres (4,320 km(2)) on the northeast tip
    of the North Island.



PETROLEUM PROPERTY ACTIVITIES, OPERATIONS AND CAPITAL EXPENDITURES FOR THE
SIX-MONTH PERIOD ENDED JUNE 30, 2011


Taranaki Basin

During the six-month period ended June 30, 2011, the Corporation incurred
$3,413,195 in capitalized exploration and development costs relating to the
Eltham Permit. Of the costs incurred during the period, $110,131 related to
asset retirement costs, $353,172 was recorded for consulting services and
$2,716,191 for well development. As a result of funding and drilling the Copper
Moki-1 discovery well, reprocessing 438 km of 2D seismic data and carrying out a
number of other technical studies to the satisfaction of the Ministry of Energy,
the Corporation earned a 100% interest in the Eltham Permit which was assigned
to NZEC on March 3, 2011. Total expenditures incurred as of June 30, 2011
relating to the Eltham Permit amounted to $3,421,462.


As of June 30, 2011, the Corporation paid $1,104,952 as deposit toward the
acquisition of the Alton Permit pursuant to the Alton Agreement. 


East Coast Basin

During the six-month period ended June 30, 2011, the Corporation incurred
$46,624 in capitalized exploration costs on the Castlepoint Permit. Total
expenditures incurred as of June 30, 2011 relating to the Castlepoint Permit
amounted to $115,111. 


In February 2011, the Corporation entered into the Ranui Assignment Agreement
with Discovery Geo, pursuant to which Discovery Geo agreed to assign to NZEC its
100% interest in the Ranui Permit. Upon satisfaction of the conditions of
assignment, NZEC will pay Discovery Geo US$1,000,000 and will issue 1,000,000
common shares to Discovery Geo. As of June 30, 2011, the Corporation incurred
$16,533 in capitalized acquisition costs relating to the Ranui Permit. On August
3, 2011, NZEC paid US$500,000 to Discovery Geo as partial payment of the
purchase price for the Ranui Permit. On August 24, 2011, the Corporation paid
the remaining US$500,000 and initiated the issuance of 1,000,000 common shares
for final consideration to of the Ranui Assignment Agreement. 


During the six-month period ended June 30, 2011, the Corporation did not
capitalize any exploration or acquisition costs relating to the East Cape
Permit. 


OUTLOOK 

Use of Proceeds

On August 3, 2011, NZEC closed the Offering for gross proceeds of $20,000,000.
NZEC's intended use of the net proceeds over the next 12 to 15 months is
outlined below:




----------------------------------------------------------------------------
                                     Anticipated                          
                                             use      Current       
                                     of proceeds  anticipated       Expected
                                          in the       use of     Completion
Property               Operation      Prospectus     proceeds           Date
----------------------------------------------------------------------------

Taranaki Basin:                                                             

Eltham Permit        - Drill and tie $ 6,600,000  $ 6,600,000           2013
                       in 1 well                                            
                       targeting                                            
                       Urenui/Mt.                                           
                       Messenger                                            
                       Formation                                            
                     - Complete and  
                       tie in Copper                                       
                       Moki-1 Well                                          
                     - Reprocess 3D                                         
                       seismic                                              
                       survey                                               

Alton Permit         - Drill and     $ 6,500,000  $ 6,500,000           2013
                       complete
                       Talon-1                                       
                       Well                                                 
                     - Commence      
                       drilling of                                          
                       second                                               
                       exploration
                       well                                       

East Coast Basin:                                                           

Castlepoint Permit   - Drill 2 core  $   625,000  $   625,000           2012
                       wells
                     - Technical
                       studies
                     - Reprocess 2D  
                       seismic data                                         

Ranui Permit         - Re-enter and  $ 3,175,000                           
                       evaluate                                             
                       Ranui-1 Well                                         
                     - Technical                                
                       studies,
                       seismic       $ 3,175,000                        2011
                       processing                                          
                       and core                                             
                       sampling                                            

East Cape Permit(i)  - Technical     $   290,000  $   290,000           2012
                       studies and                                          
                       surveys       
                     - Evaluate and                                         
                       analyze data                                         
                                                                            
Working capital as at June 30, 2011  $   206,000  $   442,904              
                                                                            
Other:                                                                      

Costs of the Offering (Paid)         $   400,000  $   431,700           Paid
(including legal, regulatory, audit                                         
and printing expenses)               

Agents' commission (Paid)            $   730,000  $   511,395           Paid

Reserves for acquisition             $ 2,500,000  $ 2,500,000         
 opportunities                                      
----------------------------------------------------------------------------
                                     $25,284,000  $25,333,999             
----------------------------------------------------------------------------
(i) Budget contingent on receipt of permit



As at the date of the filing of the MD&A, management does not anticipate any
significant changes to its current anticipated use of proceeds. 


RESULTS OF OPERATIONS FOR THREE-MONTH PERIOD ENDED JUNE 30, 2011

Period Expenses 

During the three-month period ended June 30, 2011, the Corporation incurred
total expenses of $1,109,045. Management fees, professional and consultant fees
recorded during the period were significant as the Corporation continued its
development activities and as a result of the Offering. Management fees were in
line with the consulting agreements entered into with J. Proust & Associates
Ltd. ("JPA") and Wexford Energy Ltd ("Wexford") as detailed in the related party
transactions recorded during the period. Travel and promotion materially related
to travel costs associated with marketing of the Offering. On February 21, 2011,
the Corporation entered into an asset purchase agreement ("IRBA Agreement") with
Ian R. Brown Associates Limited ("IRBA") pursuant to which the Corporation
acquired certain assets and agreed to offer employment to certain IRBA employee.
As a result of the IRBA Agreement, the Corporation began incurring office and
general costs for a larger office in Wellington, along with the additional
salary and wages of its in-country staff. The remaining general and
administrative costs were reflective of the Corporation's current stage of
development.


Interest Income

The Corporation earned $19,222 of interest income on its excess cash and cash
equivalent balances held during the three-month period ended June 30, 2011.


Net Loss and Funds from Operations

The Corporation generated net loss of $1,089,823 ($0.01 per share) for the
period ended June 30, 2011. 


ABOUT NEW ZEALAND ENERGY

NZEC is an oil and natural gas company engaged in the exploration, acquisition
and development of petroleum and natural gas assets in New Zealand. NZEC's
property portfolio collectively covers nearly two million acres in the Taranaki
Basin and East Coast Basin of New Zealand's North Island. NZEC holds two
petroleum exploration permits (Eltham Permit and Castlepoint Permit) and a 50%
interest in a petroleum exploration permit (Alton Permit, pending completion of
certain conditions), one pending petroleum exploration permit pursuant to an
assignment agreement (Ranui Permit), and one pending non-competitive petroleum
exploration permit application (East Cape Permit).


The Company's management team has extensive experience exploring and developing
oil and natural gas fields in New Zealand and Canada, and takes a
multi-disciplinary approach to value creation with a track record of successful
discoveries. NZEC plans to add shareholder value by executing a technically
disciplined exploration program focusing on the discovery of onshore and
offshore oil and natural gas resources in the politically and fiscally stable
country of New Zealand. The Company's strategy is to develop its existing
portfolio of assets and to pursue further exploration opportunities in other
areas with proven hydrocarbon systems. NZEC will continue to evaluate strategic
acquisitions from time to time where it views further exploration and
development opportunities exist, and may participate in future tenders offered
by the Government of New Zealand to acquire additional petroleum exploration
permits or petroleum mining permits.


On behalf of the Board of Directors

John Proust, Chief Executive Officer and Director

Forward-looking Statements

This news release 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 "anticipate", "continue", "estimate", "expect", "may", "will", "project",
"propose", "should", "believe" 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,
including without limitation, 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 cots 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 discussed under "Risk Factors" in NZEC's
Prospectus dated July 19, 2011. NZEC 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. Such forward-looking
statements included in this news release should not be unduly relied upon. These
statements speak only as of the date of this news release and NZEC does not
undertake to update any forward-looking statements that are contained in this
news release, except in accordance with applicable securities laws. In addition,
this news release may contain forward-looking statements attributed to
third-party industry sources.