TAG to Sell Interest in the Cardiff Deep Gas Prospect

TAG Oil has signed a letter of intent (LOI) with New Zealand-based Genesis Energy to sell its 15.1% interest in PEP 38738-D and PMP 38156-D containing the Cardiff deep gas prospect for a combination of cash and a 1% royalty on any future production from both permits.

The LOI is conditional to a formal agreement being signed as well as consents required under the joint venture operating agreement and the Ministry of Economic Development in New Zealand.

"The decision was made to sell the interest in Cardiff after considering the risk profile associated with the project and the possible need to commit significant additional capital," said Garth Johnson, TAG Oil CEO. "As a result of TAG's review of Cardiff, the board felt it was prudent to mitigate the financial risk of Cardiff while still participating in the prospect's upside through a royalty."