TAG Oil has received consent from the Taranaki Regional Council (TRC) and the Stratford District Council (SDC) to drill 18 new wells within TAG's 100%-owned Cheal Oil and Gas Field in New Zealand.
The final decision granting consent in support of TAG's drilling operations was handed down by the SDC-appointed independent commissioner after an affected landowner requested a hearing. The consent grant is subject to an appeal process that must be lodged within 15 days of the consent. TAG plans to resume drilling operations at Cheal on or about December 16, 2011 if an appeal is not filed.
Garth Johnson, CEO of TAG commented, "We are pleased to have received the commissioner's decision consenting to TAG's drilling program. Consent was granted after an independent review of all pertinent information, and therefore I trust that common sense will prevail and an appeal will not be filed. We look forward to drilling the Cheal-B6 well in the next few weeks and getting more than 40 concerned drilling employees back to work."
TAG Oil also reported an agreement has been concluded, that gives the Company exclusive rights to a state-of-art drilling unit. Under the terms of the agreement with Petra Drilling, a 100%-owned subsidiary of New Zealand-based Webster Drilling and Exploration, TAG will provide secured financing for Petra to acquire and deliver to New Zealand the fully automated VR500 rack and pinion, top-drive drill rig. In exchange, TAG has secured a fixed price for future drilling, as well as the first right of refusal on use of the rig until all financing has been repaid.
"This is a great opportunity for TAG Oil and the New Zealand oil and gas industry," Mr. Johnson further commented. "The VR500 rig is safer, more efficient, highly cost-effective and most importantly, it is environmentally friendly with a significantly smaller footprint on the area where drilling operations take place."
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