Canada-listed TAG Oil Ltd. reported Wednesday that development, appraisal and step-out drilling, and field optimization work has resumed at the Company’s Taranaki oil and gas fields. Located in the main production fairway of the Taranaki Basin on the North Island, New Zealand, TAG is pursuing significant reserve growth through developing and exploiting its lightly explored discovery acreage in the shallow and high impact deep formations.
TAG anticipates that this next wave of low risk development work — focused on oil production growth in the proven Mt. Messenger (~6,561 feet or ~2,000 meters) and Urenui (~4,593 feet or ~1,400 meters) Formations — provides considerable potential for the Company to increase its high netback oil production and add new reserves for many years ahead.
As at March 31, TAG had a proved and probable reserve base in the Mt. Messenger and Urenui Formations of 5.9 million barrels of oil equivalent and approximately 477 billion cubic feet (Bcf) & 45 million barrels of undiscovered resource potential identified in Taranaki. In October, TAG achieved record monthly production of 1,990 barrels of oil equivalent (boe) (76 percent oil) per day.
Near-term Anticipated Schedule for Taranaki Operations
TAG kicks off this Taranaki drilling campaign with the Cheal-E-JV-6 well (TAG 70 percent), and the Cheal-E7 well (TAG 100 percent).
The Cheal-E site is a new pool oil discovery of particular interest, as strong production performance continues from TAG’s Cheal-E1, Cheal-E4, and Cheal-E5 wells. These wells continue to flow oil naturally from E-1 and E-4 and under artificial lift at E-5, making future development of the Cheal-E site area, as well as future drilling on TAG’s 100 percent-controlled Cheal acreage, prospective for additional high productivity wells.
Following the Cheal-E site wells, the Nova-1 drill rig is planned to move to TAG’s 100 percent-controlled Sidewinder oil and gas field to drill step out wells. These wells will target the oil potential identified from oil shows encountered in the six Sidewinder gas wells.
The Sidewinder discovery acreage borders the Taranaki Basin’s original Mt. Messenger oil field, the Ngatoro/ Kaimiro field, a close analogy to TAG’s Cheal and Sidewinder discoveries. In contrast to Cheal and Sidewinder which have been on full time production for seven and three years respectively, the Kaimiro/Ngatoro field has been producing for 31 years, and still has 7 million BOE’s of recoverable reserves remaining from a 22 million boe ultimate recovery total.
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