TAG Oil Flows Gas from SuppleJack South-1a

TAG Oil says that its usage of under-balanced perforation techniques on the SuppleJack South-1a well has yielded gas, a significant improvement over prior results achieved by the two original partners on the project, which yielded only water.

After numerous flow and shut-in test periods over the last couple of weeks, downhole gauges are currently monitoring buildup pressures in the well, which will determine commerciality. The sole risk testing achieved a major objective, which was to determine if TAG Oil could successfully apply its knowledge to the project while minimizing capital exposure. The results have not only provided TAG Oil with critical information on the impact and application of new technologies related to certain completion techniques, they have confirmed the importance of controlling damage to these reservoirs during the drilling phase of operations.

Drew Cadenhead, CEO of TAG Oil, stated: "We continue to leverage operational techniques now common in North America, techniques that local operators were wary of testing here in New Zealand. We have gained useful knowledge at the SuppleJack South-1a well, including substantive proof that operators have not been employing optimal drilling and completion techniques while testing these easily damaged Miocene formations. Although no substantial fluid losses were reported during the drilling of this zone, we have recovered over 100 barrels of invasion fluids along with the gas, leading us to believe this type of formation damage has likely occurred in all similarly drilled zones. We are building up to a multi-well, multi-formation commercial gas project at SuppleJack, and we will apply the knowledge gained at SuppleJack South-1a to our continuing explorations."

Cadenhead also added, "The results at SuppleJack South-1a confirm the complex nature of the Miocene reservoirs in the Taranaki Basin. We are focusing on the SuppleJack area as we believe we are in a rich hydrocarbon migration pathway with follow-up prospects in the immediate vicinity ready to be drilled. What we are learning with minimal capital exposure such as the sole risk operation at SuppleJack South-1a, will help TAG move forward on higher working interest projects in the future. We're going to be involved in a number of these types of wells in the next year, and the more we learn in this under-drilled basin, the closer we get to successfully exploiting these prospects."