TAG Oil Targets Higher Output at Cheal

TAG Oil, which now controls 100% of the Cheal oil and gas field onshore Taranaki, has begun optimization work aimed at increasing daily production and increasing its reserve base in the secondary Urenui Formation.

TAG said it plans to fracture stimulate its Cheal-A7 well with downhole completion equipment reconfigured to increase oil flow. The company said reservoir modelling has indicated the fracture stimulation could increase daily production from Cheal-A7 by 60% to 80%. The well is currently flowing approximately 75 barrels of oil per day.

TAG will also re-enter a suspended wellbore, Cheal-1, and target the bypassed Urenui Formation approximately 400 m shallower than the main producing Mt. Messenger zone.

The Urenui Formation currently has no assigned reserves at Cheal, though at Cheal-1 the Urenui zone was tested at approximately 50 barrels of oil and more than 1 mmcf of gas per day. Downhole heating and other wax reduction technology will be installed to re-test Urenui at a depth of about 1,400 m.

TAG said the Urenui Formation has consistently demonstrated oil and gas shows in all 11 Cheal wells drilled, but was bypassed to focus on production from the deeper Mt. Messenger Formation.

The program would cost under $2 million and be a catalyst for future technology-driven development of the Cheal pool.

TAG said the Cheal oil field had produced more than 500,000 barrels of oil to date, with remaining proven and probable reserves of approximately 530,000 barrels of oil equivalent.