TAG Oil Increases Interest in Canterbury Basin

TAG Oil has increased its interest in the onshore Canterbury Basin Project in New Zealand from 10% to 35%.

The Canterbury Basin is lightly explored with modern technology; it's potential for commercial discovery is supported by several factors including four wells drilled by British Petroleum and Shell that resulted in two gas/condensate discoveries in the offshore area. These accumulations found in offshore wells confirm that generation, migration and entrapment of hydrocarbons do in fact occur in the basin.

In addition, the basin holds very similar geological characteristics to the producing basins of Taranaki and South Australia, which formed at the same time and were adjacent before Cretaceous rifting. Although the onshore Taranaki Basin (600,000 acres) is a much smaller area than the Canterbury Basin, several hundred million barrels of oil equivalent have been discovered, with new discoveries being reported regularly.

According to TAG Oil's President Drew Cadenhead, "Not only is the Canterbury Basin categorized as one of the few remaining oil and gas frontiers in the world, it also borders the city of Christchurch, which is a completely untapped natural gas market. Although this project has a higher degree of risk than our Taranaki portfolio, it provides a rare and exciting opportunity to participate in a frontier with tremendous upside."

TAG's permit area covers approximately 690,000 acres which is considered to be the most prospective area onshore. Current exploration focus is to highlight a drilling location on the South Chertsey Prospect, which covers an area of 12,000 acres and acquire further seismic over the Salmon lead.