Independent Canadian oil and gas production and exploration company TAG Oil Ltd. announced today that the Company has filed its second quarter 2008 financial statements. TAG started the 2008 fiscal year with $13.43 million in cash and cash equivalents and ended the second quarter with $6.9 million at September 30, 2007 with the decrease in cash for the quarter resulting materially from capital expenditures related to the Cheal oil field. Shareholders' equity at quarter end was $38.6 million (March 31, 2007: $40.13 million).
During the second quarter, the Cheal oil field produced 41,612 barrels of oil gross (6 months: 77,226) with 33,009 barrels of oil gross (6 months: 68,939 barrels) being sold to September 30, 2007. TAG's interest in the field is 30.5%.
Currently production is limited to approximately 360 barrels per day utilizing the two A site wells as the B site wells remain shut-in until approximately December 15, 2007 when the permanent tie-in of these wells to the Cheal Production Station is expected to be completed.
The loss recorded for the quarter was $673,384 ($0.01 per share) (6 months: $1,585,597) ($0.02 per share) and included production revenue of $789,655 (6 months: $1,683,154) and production costs and royalties amounting to $302,547 and $45,918 (6 months: $564,135 and $86,656), respectively.
"We are looking forward to the completion of the tie-in of the Cheal B wells to the Cheal Production Station in December that will allow for stable production rates and cash flow that will enable the joint venture to prepare to drill additional wells at Cheal and maximizing the production capabilities of the field," said CEO Garth Johnson. "Having said that, we are approaching the go-forward Cheal operations cautiously due to costs to drill and the challenges that we have faced at Cheal, inclusive of the A site casing leaks that have been fixed using an interim solution."
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