Canada's East West Petroleum Corp., an international oil and gas producer, reported Tuesday that it has been informed by TAG Oil Ltd., the operator of the Cheal East discovery site (TAG 70 percent / EW 30 percent) in the Taranaki Basin of New Zealand, that a pipeline connecting the Cheal East site to TAG’s main production facilities (TAG 100 percent) has been completed and is operational.
The TAG-owned pipeline is an important milestone as it generates additional revenue through the sale of E-site natural gas, it eliminates the flaring of the gas and the associated flaring costs, and it provides the required infrastructure for future development of the target-rich Cheal East discovery area. East West’s share of current estimated gas production at Cheal-E is approximately 540 million standard cubic feet per day (90 barrels of oil equivalent per day) net to EW.
David Sidoo, president and CEO of East West commented, “We are very pleased to monetize our natural gas production in New Zealand, which provides an immediate contribution to East West’s cash flow when added to the existing high netback oil production from Cheal East discovery area. East West remains cash flow positive from its operations and is fully funded to pursue its planned capital expenditure programs. On behalf of East West, I would like to extend my thanks and congratulations to TAG Oil Ltd. for completing the pipeline on budget and ahead of schedule.”
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