VANCOUVER, March 30 /CNW/ - New Zealand oil and gas producer and explorer TAG Oil Ltd. (TSX-V: TAO) announced today that the first stratigraphic well in TAG's initial three-well Waitangi Hill program has been drilled to a total depth of 171m. The results, including "free oil" in core samples, further indicate Waitangi Hill as an area of active oil and gas generation and expulsion. The Waitangi Hill-2 well is located within TAG's 530,000-acre permit area in the northern East Coast Basin of New Zealand, where TAG is pursuing both conventional and unconventional fractured oil shale prospects.
The objective of these Waitangi Hill stratigraphic wells is to begin collecting the modern data needed to enhance the Company's ability to appraise a conventional development of the historical Waitangi Hill shallow oil discovery, and more importantly, to further assess the viability of the underlying Waipawa Black Shale and Whangai Shale source rock formations as unconventional targets.
TAG Oil Chief Executive Officer Garth Johnson commented, "We are extremely encouraged by the positive results of this well, which has now proven the Waitangi Hill area has an active light oil and gas generating system in place. It has further de-risked and validated the prospectivity and significant potential of the underlying unconventional fractured oil shale play."
The Waitangi Hill-2 well experienced a strong "oil-wet" gas kick combined with significant pressure at 149m, which was addressed prior to continuance of drilling. Drilling then continued to 171m, where a conventional sandstone reservoir was encountered and core was retrieved that exhibited streaming "free oil."
To see video footage of the Waitangi Hill-2 drilling, please click the following link: http://tagoil.com/tag-oil-tv.asp?vd=9
Considering the significantly pressured "oil-wet" gas kick encountered and the core confirmation of light gravity oil generation at this location, the well was suspended at 179m for safety reasons. Gas, oil and core samples retrieved while drilling have been sent to labs for further analysis prior to planning the next two Waitangi Hill wells, which will use equipment more capable of handling these anomalously pressured shallow oil and gas zones.
"At each stage of exploration thus far, we have continued to confirm the key attributes that support a significant unconventional oil-shale play within the Waipawa Black Shale and Whangai Shale source rocks," Mr. Johnson further commented.
Key Attributes of the Waipawa Black Shale and Whangai Shale Source Rocks:
- High-quality light sweet crude has been generated and is being
- The 50-degree API oil has been geochemically typed to these shales;
- The shales are naturally-fractured; they are mature; and they are
accessible at shallow depths due to recent uplifting;
- A smectite-rich clay formation located immediately above the shales
exhibits all the attributes of a competent seal;
- Over-pressures have been noted in the East Coast Basin due to both
competent seals and rapid uplift in this area;
- Oil and gas seeps throughout TAG's 2.4 million acres confirm the
Waipawa Black Shale and Whangai Shale formations are widespread.
"We are pursuing the unconventional fractured oil-shale play through phased operations designed to de-risk the play safely and cost-effectively." Mr. Johnson added.
For additional information on TAG's fractured shale project please click the following link: http://tagoil.com/fractured-shale.asp#.
TAG Oil Ltd.
TAG Oil Ltd. is a Canadian-based company with operations in New Zealand. The Company holds an extensive drill-ready prospect inventory in the Taranaki Basin, including a 100% interest in the Cheal oil and gas discovery now under appraisal and development. TAG is positioned to build near-term production through optimization of the existing producing wells, and through further development and exploration of the Cheal Mining License and exploration acreage in close proximity to it in the Taranaki discovery fairway.
In the East Coast Basin, the Company intends to exploit the potential undiscovered resources that have been demonstrated in the Waipawa Black Shale and Whangai Shale source-rock formations, using technologies that are commonplace in North America but not yet employed in New Zealand. In addition, TAG is appraising a shallow historical light oil discovery, as well as testing high-impact conventional prospects across a 2.4 million-acre holding.
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. Actual results may vary materially from the information provided in this release. As a result there is no representation by TAG Oil that the actual results realized in the future will be the same in whole or in part as those presented herein. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. 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 Instrument 51-102.
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: For further information: Garth Johnson or Dan Brown, TAG Oil Ltd., (604) 682-6496, Website: http://www.tagoil.com/