New Zealand oil and gas producer, TAG Oil Ltd. announced that the Company has been awarded a 100% interest in a 61,900-acre permit extension to the Company's PEP 38349 permit, located in the southern portion of the onshore East Coast Basin, New Zealand.
When combined with the original PEP 38349, this extension creates a combined 1,695,266-acre exploration area and a total 100% controlled position of 2,399,714 acres within the basin. This acquisition further solidifies TAG's first-mover position in this oil shale frontier at a time of rapidly increasing interest by Asian-based and international investors in New Zealand's petroleum sector. This growing focus has been fueled by New Zealand's recent major discovery announcements, and the recent chain of significant transactions spreading across unconventional technology-driven shale plays around the world.
"Kawakawa is an attractive new play area for TAG and will be a keen focus within our East Coast prospect portfolio. Strong oil indications have been recorded in the immediate area from both outcrop and seeps and geochemical analysis indicates conclusively that this oil was generated either solely from Waipawa Black Shale or from a combination of Whangai Shale and the Waipawa Black Shale formations," commented Garth Johnson, TAG's Chief Executive Officer.
This acquisition secures the entire extent of the Kawakawa exploration area, which straddled the southern boundary of TAG's original PEP 38349 permit. The elongate Kawakawa Anticline, 8 km long N-S and over 7,500 acres in aerial extent, is a reverse fault structure at depth that has potentially "double stacked" both the Waipawa Black Shale and Whangai Shale formations, effectively bringing the potential formations thickness to as much as 2000 feet of fractured oil shale.
"Kawakawa can be drilled at reasonable drilling costs due to the relatively shallow depths," Mr. Johnson added. TAG plans to complete additional geological and geochemical mapping over the area before adding Kawakawa-1 to the Company's multi-well East Coast drilling campaign that includes Boar Hill-1 and Waitangi Hill-1, all targeting the shale formations.
"The East Coast Basin represents a compelling long-term growth area for TAG. Not only does TAG enjoy the benefits of a politically stable country, more importantly; the East Coast basin is an excellent geological environment for fractured shale exploration. Combined with TAG's growing production operations, development activities and lower risk exploration opportunities in the proven Taranaki Basin, this East Coast acreage further solidifies TAG's longer term upside in this under-explored country," Mr. Johnson further commented.
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