VANCOUVER, Sept. 2, 2011 /CNW/ - TAG Oil Ltd. (TSX: TAO and OTCQX: TAOIF) is pleased to report that it has entered into a farmout agreement
("Agreement") with Apache Corporation ("Apache") to explore and
potentially develop oil and natural gas resources in the East Coast
Basin of New Zealand.
Apache has agreed to conduct a multi-phased exploration, appraisal and
potential development program within TAG's East Coast Basin exploration
permits PEP 38348, PEP 38349 and PEP 50940 ("the Permits"). The
Permits comprise in excess of one million prospective acres of onshore
oil and gas opportunities located on the southeast portion of the North
Island. TAG currently holds a 100% working interest in the properties.
Apache has agreed to pay for a portion of TAG's direct costs incurred to
date, as well as providing TAG a full carry on three phases of
operations to a maximum agreed cost in each phase. If the agreed cost
is exceeded in any phase, or if additional operations are conducted,
Apache will pay a majority share of any drilling or seismic costs in
the specified percentages set out in the Agreement.
Each phase of operations will include an aggressive program of both 2D /
3D seismic and drilling with Apache earning an increasing interest in
the Permits as follows:
Phase 1: Apache will earn a 50% interest in 5,120 acres of the Permits
after operations are conducted and by committing to Phase 2.
Phase 2: Apache will earn a 25% interest in the Permits after
operations are conducted and by committing to Phase 3.
Phase 3: Apache will earn a 50% interest in the Permits after operations
are conducted and by committing to Phase 4 operations.
Subject to certain conditions, the planned exploration work program will
be conducted over the next four years. Seismic operations will start in
2011 with drilling to commence in 2012.
Apache will be the Operator for all activities undertaken pursuant to
the Agreement, excluding the initial four vertical wells of the work
program that TAG will operate with Apache's assistance. Apache will
spend up to $100 million upon completion of Phase 3 to earn a 50%
interest in the Permits. At the end of Phase 3 operations TAG will
remain as operator of the Permits. If Apache commits to Phase 4
operations, all costs will then be shared equally between Apache and
TAG going forward.
TAG Oil CEO, Garth Johnson, commented, "TAG Oil is excited and honored
to partner with Apache in the East Coast Basin to achieve a common goal
of converting the potential of the East Coast Basin to proven reserves
with integrity, respect and excellence in a safe and environmentally
responsible manner. We are planning an aggressive exploration program
with Apache with a starting date of September 2011 to initiate seismic
acquisition with drilling to begin in early 2012".
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within
the meaning of Canadian securities laws. All statements contained in
this news release that are not historical facts are forward-looking
statements. Forward-looking statements typically contain statements
with words such as "anticipate", "believe", "plan", "will", "may",
"should" or other similar words suggesting future outcomes. In
particular, in this press release, all estimates and statements that
describe the Company's objectives, goals, or future plans relating to
the seismic and drilling program related to the Agreement are
forward-looking statements under applicable securities laws and
necessarily involve risks and uncertainties including, without
limitation: risks associated with oil and gas exploration, development,
exploitation, production, marketing and transportation, volatility of
commodity prices, imprecision of reserve estimates, environmental
risks, competition from other producers, and changes in the regulatory
and taxation environment. These forward-looking statements are based on
certain factors and assumptions, including factors and assumptions
regarding the management's views on the oil and gas potential in the
Permits, the success of any individual phase of the Agreement, Apache's
electing to commit to each phase of the Agreement, and the costs
necessary to complete the various phases of the Agreement, and the
Company's ability to share in any cost over-runs relating to each phase
of the Agreement. Consequently, the Company's actual results may vary
materially from the information provided in this release and 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.
Additional risk factors and uncertainties 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 Annual Information Form and its most recent reports in Canada
under National Instrument 51-101.
The forward-looking statements contained in this press release are made
as of the date hereof and the Company disclaims any obligation to
update or revise such statements, except as required by applicable law.
SOURCE TAG Oil Ltd.
For further information:
Dan Brown or Garth Johnson
TAG Oil Ltd., 1-604-682-6496