TAG Oil Trims Cheal Reserves, Closes Cardiff Sale in New Zealand
Canadian-based oil and gas producer and explorer, TAG Oil has received the results from the interim independent reserves review on its 30.5% interest in the Cheal Oil Pool, onshore Taranaki Basin, New Zealand.
The report was completed by Sproule International Limited, a subsidiary of Sproule Associates Limited, one of the largest and most highly regarded geological, geophysical, and petroleum engineering consulting companies in North America.
The independent report conducted as of December 31, 2008 has assigned a present value using a 10% discount rate of $3.9 million to TAG's share of proved and probable reserves located at Cheal. In addition, gross proved and probable reserves estimates of the Cheal pool have been reduced from 2.783 million boe at March 31, 2008 to 510,000 boe. These reductions in value and reserves are based on a number of factors such as:
- substantially lower oil price forecasts
- reduction in the area of proven and probable reserves as a result of new information from the A6 and A6ST wells
- revised projected future well performance
TAG Oil CEO, Garth Johnson, commented, "Although this report is based on the operators suggested work program which has not been approved by TAG at this point, we feel the report gives us an accurate view of the present value of the field based on 2008 production history and drilling results. The unfortunate outcome of the Cheal A6 and A6ST wells, combined with global economic conditions have resulted in a Joint Venture decision to carefully stage the timing of new well development plans for the pool. We feel the Cheal field has upside potential, however a new cost-effective strategy must be implemented given the new technical and reserve information."
TAG Oil also announces today that the Company completed its previously announced sale of its 15.1% interest in PEP 38738-D and PMP 38156-D ("Cardiff") to a subsidiary of New Zealand based Genesis Energy for a combination of cash and a 1% royalty on any future production from both permits.
- TAG Oil Gets Approval to Take 70% Operating Stake in NZ's PEP51153 (Jun 06)
- NZ-Focused TAG Oil Cuts Capex for Rest of FY16 Due to Low Oil Prices (Oct 15)
- TAG Prepares for NZ's Cheal East Field Development with New Pipeline Link (May 27)
Company: Genesis Energy more info
- NZOG Reports 15.3% Rise in Developed Reserves in Kupe Field Off Taranaki (Apr 21)
- Genesis Energy Upgrades O&G Reserves at Kupe Field Offshore Taranaki (Dec 09)
- Genesis Buys Enterprise Offshore Pipelines for $1.5 Billion (Jul 16)
Company: Sproule Associates more info
- TAG Oil Trims Cheal Reserves, Closes Cardiff Sale in New Zealand (Feb 16)
- Austral Pacific Revises NZ Reserves Estimates (Feb 16)
- Oilexco Increases 2P and 3P Reserves after Successful 2008 E&P Activities (Feb 13)