VANCOUVER, May 31, 2011 /CNW/ - TAG Oil Ltd. (TSXV: TAO) and (OTCQX: TAOIF) is pleased to announce that completion and flow testing operations on
the Cheal-B4ST discovery well located in PML 38156, Taranaki Basin, New
Zealand, have been completed, and the well has now been placed on
permanent production into TAG's 100%-owned Cheal Production Facility.
The Cheal-B4ST vertical exploration well was drilled to a total depth of
1821m (5973 feet), encountering net pay in both the Urenui and Mt.
Messenger Formations. Flow rates averaged 400 barrels of oil equivalent
(BOE) per day (360 barrels of oil + 240 thousand cubic feet gas) after
the first week of production.
The Cheal-B4ST well encountered 17 meters (56 feet) of net pay within
the Urenui (~1400m) and Mt. Messenger (~1700m) zones. These
Miocene-aged zones were isolated and tested separately, confirming oil
and gas flow rates from both zones. The final completion co-mingles the
TAG Oil CEO Garth Johnson commented, "The Cheal-B4ST well represents a
significant milestone for the Cheal oil and gas field and opens the
door for substantial reserve growth. Prior to this year, all our Cheal
reserves were assigned solely to the Mt. Messenger Formation, but with
Cheal-B4ST, we now have three wells producing oil from the Urenui
Formation as well. Given these excellent results, further development
of the widespread Urenui Formation will be a top priority."
TAG also reports that the Company is expanding the capabilities of the
artificial lift systems at the Cheal Production Facility to accommodate
the new wells drilled in the last nine months. At present, the Plant is
producing approximately 1000 barrels of oil equivalent per day with
approximately 350 barrels of oil equivalent per day that is shutin,
awaiting completion of the expansion. The expansion work is scheduled
to be complete by September 2011 at a nominal cost.
The Cheal oil and gas field is located in Petroleum Mining Permit 38156
in the Taranaki Basin New Zealand. For further information on the Cheal
Oil and gas field please visit http://www.tagoil.com/operations.asp
TAG Oil Ltd.
TAG Oil Ltd. (http://www.tagoil.com/) is a Canadian-based production and exploration company with operations
focused exclusively in New Zealand. With 100% control over all its core
assets, including oil and gas production infrastructure, TAG is
anticipating substantial oil and gas production and reserve growth
through development of several light oil and gas discoveries. TAG is
also actively drilling high-impact exploration prospects identified
across 2,712 sections of land in the onshore Taranaki and East Coast
Basins of New Zealand's North Island.
In the East Coast Basin, TAG Oil is pursuing the significant
unconventional resource potential estimated in the fractured shale
source-rock formations that are widespread over the Company's acreage.
These oil-rich, naturally fractured and thermally mature source-rock
formations have many similarities to North America's Bakken Shale
source-rock formation in the successful Williston Basin.
"BOE"s may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6Mcf: 1 Bbl is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
Cautionary Note Regarding Forward-Looking Statements Statements contained in this news release that are not historical facts
are forward-looking statements that involve various risks and
uncertainty affecting the business of TAG Oil. These statements are
based on certain factors and assumptions including those related to the
exploration and development of TAG Oil's Cheal oil and gas field and
specifically the Cheal-B4ST light oil and gas discovery in the Taranaki
Basin of New Zealand. Actual results may vary materially from the
information provided in this release. As a result, there is no
representation by TAG Oil that actual results realized in the future
would be the same in whole or in part as those presented herein.
Factors that could cause actual results to differ from those contained
in the forward-looking statements are set forth in, but are not limited
to, filings that the Company and its independent evaluator have made,
including the Company's most recent reports in Canada under National
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE TAG Oil Ltd.
For further information:
Dan Brown or Garth Johnson, TAG Oil Ltd. 1-604-682-6496