TAG Acquires Interest in Taranaki Basin Permit
TAG has acquired 100%-interest in Petroleum Mining Permit 38156-D, which contains the Cardiff gas/condensate discoveries located onshore in the Taranaki Basin, New Zealand. This interest was acquired from the receivers and liquidators of the previous operator of PMP 38156-D, and its joint-venture partner, the New Zealand state-owned utility.
The Cardiff structure has been identified as a large anticlinal trap, some 12 km long by 3 km wide, with a number of potential pay zones within the Kapuni Sands Formation. The Cardiff gas/condensate discovery has the potential to become a substantial onshore resource, situated on trend and among several sizable deep gas/condensate discoveries in the Taranaki Basin, including the nearby landmark Kapuni Field, New Zealand's first major onshore discovery, and the prolific Mangahewa and Pohokura gas fields.
Gas with rich condensates was discovered at Cardiff within the upper Kapuni zone, which encountered 12m of net pay and flowed at over 3 million cubic feet and 100 barrels of condensate (light oil) per day with improving rates observed on long-term testing. This zone can be identified on 3D seismic to be a prospective target across the span of the Cardiff structure. Furthermore, even greater resource potential exists in the deeper K1A and K3E zones, where strong gas shows were encountered over a gross 600m interval. This will be a primary target in future Cardiff wells.
Access to market for Cardiff gas is relatively straightforward, being situated just 3-km from a tie-in to TAG-owned gas infrastructure. This tie-in provides a link to the high-capacity LTS gas pipeline and the thriving North Island gas market. This acquisition comes at a time of strong demand, tightening supply and record-high contract gas prices in New Zealand, providing a number of commercial opportunities for developing Cardiff gas.
TAG plans to recommence development of Cardiff targeting the various gas/condensate zones with rapidly advancing horizontal-drilling and multi-stage fracturing technologies developed specifically for these types of tight-sand gas reservoirs. Porosities and permeabilities found within the multiple Kapuni Sands Formation zones encountered in the Cardiff-1 (5050m total depth), Cardiff-2 and Cardiff-2A sidetrack (4931m total depth) wells are analogous to prolific tight-sand formations found in Germany, Holland, the North Sea and numerous basins in the U.S. and Canada, where these technologies have been successful in achieving dramatic increases to flow rates and overall reserve recovery.
Permit PMP 38156-D resides within the same permit boundary as TAG's Petroleum Mining Permit 38156-S, where TAG is currently producing oil and gas and developing discoveries in shallower formations. This acquisition effectively ends the previous split of the permit and TAG now controls 100% of all prospective formations within Petroleum Mining License 38156.
Mr. Garth Johnson, CEO of TAG commented, "This acquisition not only positions TAG with a prime onshore gas and condensate development opportunity in close proximity to our own infrastructure, it secures 100%-control over title to the PMP 38156 production license. TAG is building its near-term cash flow through development of the shallow discoveries, and can now apply our highly efficient business model to exploiting the extensive multiple-zone hydrocarbon potential within this Taranaki Basin permit."
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