TAG's Cheal Oil Field P&P Reserves Estimated at 2.783MM BOE
TAG Oil Ltd. has announced the filing of the Company's audited consolidated financial statements and the accompanying management's discussion and analysis, reserves statement and independent evaluator's report on reserves for the year-ended March 31, 2008, as required pursuant to National Instruments 51-101 and 51-102.
Cheal Oil Field reserves (TAG: 30.5%):
An independent assessment of reserves conducted as of March 31, 2008 has assigned a present value to TAG's share of proved and probable reserves located at the Cheal oil field of US$28.18 million, based on year end oil prices and a 10% discount rate. The assessment has assigned gross proved and probable reserves within the Cheal oil field of 2.783 million boe.
During the 2008 fiscal year the Cheal oil field produced 169,737 gross barrels of oil; 154,240 gross barrels were sold with oil prices averaging $87 per barrel. Royalty and production costs averaged $37 per barrel,resulting in a net back per barrel of approximately $50.
TAG recorded $4.1 million in production revenue for the year which is an increase of more than 400% from the 2007 fiscal year. The net loss recorded for the year amounted to $7.98 million, primarily as a result of a
$6.56 million write-down related to capitalized property expenditures incurred in prior years and non-cash expenses such as depletion and inventory write-downs amounting to $1.55 million.
Daily production rates from plant start-up to year end averaged 465 barrels of oil gross per day; currently the field is producing approximately 450 barrels of oil per day. A cycling scheme has been initiated in the pool to minimize gas influx and optimize long term oil production.
Cheal A7 was successfully drilled earlier in July and will be tied into the Cheal Plant by early September to facilitate production testing.
TAG Oil CEO, Garth Johnson, said, "The 2008 fiscal year was a challenging yet rewarding year as we worked hard to achieve our goals. A refocusing of our exploration strategy and full-time production from the completed Cheal facility has allowed us to finish the 2008 fiscal year financially strong and approaching our goal of profitable operations. We look forward to maximizing the value of our assets through increased production, reduction in operating costs and re-investment of cash flow from the Cheal pool into our high-graded exploration and development projects."
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