This takes the Calgary-based TAG Oil's New Zealand portfolio to nine permits.
The Calgary-based company said it had reached an agreement to earn up to a 70% working interest in the onshore portion of the PEP 38260 in the northern part of the Canterbury Basin.
TAG said it had made the agreement with New Zealand-based Green Gate Ltd, to earn a 30% working interest and assume operatorship of the onshore permit in northern Canterbury by acquiring a 2-D seismic program at a cost of US$400,000 over the Kate anticline prospect.
TAG has the option to earn an additional 40% working interest by drilling one exploration well based on the seismic data acquired over the 15 sq km Kate anticline.
TAG also retains an option to pay back costs to Green Gate and acquire a 15% working interest in the adjacent 680,000 acre offshore portion of the same permit. Green Gate Ltd will be acquiring a minimum of 200 km of offshore 2-D seismic in this portion of the permit to follow up on previously identified promising offshore structures.
TAG Oil president Drew Cadenhead said the interest in PEP 38260 was the company's third Canterbury Basin permit. It also has a 54% interest in the onshore Canterbury PEP 38256 and a 25% interest in the offshore Canterbury PEP 38258, both of which are operated by Austral Pacific Energy.
The company has also raised the number of its onshore Taranaki permit interests to six with the acquisition of a 16.6% interest in Bridge Petroleum Ltd operated PEP 38745.
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