TAG Oil Acquires Exploration Permits in Taranaki
TAG Oil has secured 20% interest in two onshore blocks, PEP 38723 and PEP 38741. These blocks are situated in what is considered prime exploration acreage for the discovery of shallow Mt. Messenger oil pools. The potential for Mt Messenger discovery is clearly demonstrated by the nearby Goldie, Ngatoro and Kaimiro discoveries that have combined reserves of approximately 8.85 million barrels of oil equivalent. PEP 38723 and 38741 also include large deep gas prospects and leads which are becoming increasingly valuable in light of New Zealand's impending gas supply shortfall and market growth.
TAG Oil's strategy is to participate in an 80-sq. km. 3D seismic program over these permits with its partners in early 2003. This program is expected to generate numerous prospects for follow-up and an ongoing drilling program in 2003 and 2004. These new permits are strategically located in a proven oil system and infrastructure and ideally suited to making profitable discoveries.
The Company's other interest, a 25% stake in PEP 38480, is located offshore, adjacent to Shell's recent Pohokura gas-condensate discovery. Pohokura is a major new field with an estimated 1 trillion cubic feet of gas and 53 million barrels of condensate. Two similar but smaller targets have been identified in PEP 38480 from existing seismic and well control. Specialized techniques will be applied to the seismic data to delineate these targets and assess their potential for future drilling.
These interests were acquired from two affiliated companies, Indo-Pacific Energy and Gondwana Energy by way of terms in line with industry standards.
With only 183 wells drilled to date, the Taranaki Basin is relatively immature and is only lightly explored. Despite the low drilling activity, over 455 million barrels of oil and condensate and 7 trillion cubic feet of gas have been discovered. Importantly, limited 3D seismic data has been acquired onshore to date but where it has been utilized it has been employed with success rates as high as 50% in the Mt. Messenger Sandstones.
Recent exploration successes in the Taranaki Basin have resulted in increasing international recognition and growing awareness within the petroleum industry. We have concluded that the basin is reaching a critical turning point in its evolution and believe that the Mt. Messenger project will play a pivotal role in this development. Our new interests are key components in our growth strategy, providing TAG Oil opportunities, now and into the future.