TAG Oil announced today that the Company has completed the acquisition of a 20% interest in offshore exploration Permit PEP 52181, which covers a 42,379-acre area in the main Taranaki oil and gas discovery fairway.
PEP 52181, operated by a subsidiary of Australian-based Roc Oil Limited, is located just 8km from shore and is in close proximity to existing infrastructure, making commercialization in the event of discovery efficient and cost effective.
The Permit, which contains the Kaheru Prospect and numerous other leads, has extensive 2-D and 3-D seismic coverage, and has been identified to have high-impact exploration potential with a good chance for success. Kaheru is a Miocene-aged prospect on the same successful thrust belt play fairway as many significant Taranaki oil and gas fields, including: Rimu, Kauri, Manutahi immediately north, as well as the Tariki, Ahuroa, Waihapa and Ngaere ("TAWN") fields further north. Immediately to the west, the large Kupe Gas-Condensate field is now also in full production.
TAG Oil CEO Garth Johnson commented, "This new acquisition is an excellent addition to our Taranaki Basin prospect portfolio. The Kaheru Prospect brings TAG a significant amount of resource potential, and an opportunity to enter a new permit with a proven international offshore operator. We look forward to working with Roc Oil Limited and the other joint venture partners with a view to advancing Kaheru to the drilling phase."
TAG is also pleased to report that production testing of the Cheal-BH-1 horizontal well continues, with the well now flowing oil, gas and fracture fluids. The Company anticipates that once all fracture fluids and excess fracture sand have been recovered, a reliable stabilized flow rate will be achieved. "TAG is very encouraged by the testing of the horizontal well thus far, as well as all of the results from workover operations on existing Cheal wells. This has resulted in TAG recently achieving the highest daily oil and gas production volume in Cheal's history." continued Mr. Johnson.
You can find more information on TAG's oil and gas production online at http://tagoil.com/production.asp.
The Company will recommence drilling at Cheal and Sidewinder in February 2011. The program includes development and step-out drilling, as well as exploration drilling targeting high-impact prospects defined on 3-D seismic, all within the Company's 100%-controlled Taranaki Basin portfolio.
TAG Oil Ltd.
TAG Oil Ltd. is a Canadian-listed company (TSX-V: TAO) with operations in New Zealand. With 100% control over all its core assets, including production infrastructure, TAG is anticipating production growth through development of multiple oil and gas discoveries in the Taranaki Basin and through high-impact exploration drilling on prospects identified over 3,500 sections of land.
In the East Coast Basin, TAG is pursuing the major unconventional resource potential that has been demonstrated in the Waipawa Black Shale and Whangai Shale source-rock formations that are widespread across the Company's acreage. The geological characteristics of these oil-rich, naturally fractured, thermally mature formations compare favorably to fractured shale formations such as the Bakken Shale in the Williston Basin and Liassic Shale in the Paris Basin.
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