TAG Oil Snaps Up Remaining Interest in Taranaki Basin Acreage

Oil and gas producer and explorer, TAG Oil announced that the Company's binding offer to acquire Austral Pacific Energy's (in receivership) 66.67% interest in the 7,910 acre exploration permit PEP 38748 has been accepted by the Receivers appointed to Austral Pacific Energy Ltd. Combined with TAG's current 33.33% operated interest the permit, TAG will control 100% of this Permit.

The consideration to be paid by TAG for these assets includes:

  • US $50,000 in cash; and
  • an initial 5% overriding royalty on any future net oil sale revenue per barrel on PEP 38748 for the first 200,000 barrels of oil produced (reduced to 2.5% for the life of the field after 200,000 barrels of oil have been produced); and
  • certain permit work commitments to be completed in the next 20 months.

Garth Johnson, TAG Oil CEO, commented, "We are pleased to acquire the remaining interest in this strategically located onshore acreage situated in the heart of the Taranaki discovery fairway. A number of drillable prospects have been identified by 3D seismic that indicates the potential for significant upside. This high-grade exploration asset is highly complimentary to our Cheal production permit by providing exploration opportunities with a reasonable risk profile."

The offer is subject to certain standard conditions precedent being satisfied for a transaction of this nature.