VANCOUVER, Feb. 14, 2018 /CNW/ - TAG Oil Ltd. (the "Company" or "TAG Oil") (TSX: TAO and OTCQX: TAOIF) reports its third quarter results for the interim period ending December 31, 2017, highlighted by a 6% increase in revenues and a 40% increase in operating netbacks from the previous quarter.
Toby Pierce, TAG Oil's CEO, commented "I am very pleased with both the increase in operating netbacks and the revenues quarter-over-quarter despite the modest declines in production. With temporary production issues experienced in Q3, which are being addressed, we anticipate increased production in the next quarter. Furthermore, with stronger netbacks TAG Oil is fully capable of self-funding itself both on our existing as well as our future operations. Finally, the waterflood program continues to progress at Cheal with increased production volumes likely expected in calendar H2/18."
Q3 2018 FINANCIAL AND OPERATING HIGHLIGHTS
- At December 31, 2017, the Company had $3.3 million (September 30, 2017: $2.7 million) in cash and cash equivalents and $9.8 million (September 30, 2017: $8.7 million) in working capital.
- Average net daily production decreased by 9% for the quarter ended December 31, 2017, to 1,043 boe/d (79% oil) from 1,151 boe/d (78% oil) for the quarter ended September 30, 2017.
- Revenues generated from oil and gas sales increased by 6% for the quarter ended December 31, 2017, to $6.4 million from $6.0 million for the quarter ended September 30, 2017.
- Operating netbacks increased by 40% for the quarter ended December 31, 2017, to $43.21 per boe compared with $30.95 per boe for the quarter ended September 30, 2017.
- Capital expenditures totalled $1.3 million for the quarter ended December 31, 2017, compared to $6.8 million for the quarter ended September 30, 2017.
- On November 27, 2017, New Zealand Petroleum and Minerals approved the application to extend the duration of exploration for the Company's 70% working interest of Cheal East permit (PMP 54877) for an additional five year term, commencing December 11, 2017.
On January 30, 2018, Mr. Alex Guidi resigned as Chairman and a Director of the Company.
TAG Oil spudded the Pukatea-1 exploration well on January 24, 2018, which is located in TAG Oil's operated Puka permit (PEP 51135, 70% TAG Oil) in the Taranaki Basin of New Zealand. The well will be drilled to a total depth of ~3,170m and is expected to reach the high impact Tikorangi Limestone target in approximately 10-days time. The Pukatea prospect is on trend and adjacent to the Waihapa oil field, which was discovered in the early 1990's and has produced more than 23 MMbbl from the Tikorangi Limestone formation, where individual wells produced as much as 5,000 bbl/d.
On February 12, 2018, TAG Oil reported that the well encountered potential oil pay in the Mt. Messenger formation of ~10.4m of true vertical thickness (~13.7m measured) gross sandstone within the formation at a depth of ~1,618m measured depth. Electric log data analysis indicates that there is at least one potentially oil-charged zone with movable hydrocarbons with excellent porosity and permeability. Maximum total gas reached 19.2%, good oil fluorescence was observed, and clean sand similar to the Puka-2 well was also observed by the wellsite geologist.
Going forward, management will continue to employ its disciplined approach and remain focused on production, appraisal and exploration opportunities, and TAG Oil will continue to work towards achieving the following goals:
- Maximizing the value of its operations in its producing fields by maintaining enhanced oil and gas recovery techniques to optimize production and lower per barrel production costs;
- Establishing additional proved reserves and commercializing its oil and gas exploration properties;
- Reviewing potential acquisitions of overlooked/undervalued opportunities in New Zealand and Australia; and
- Managing its operating cash flows and balance sheet as effectively as possible to minimize costs while focusing on shareholder returns.
About TAG Oil Ltd.
TAG Oil (http://www.tagoil.com/) is an international oil and gas explorer with established high netback production, development and exploration assets, including production infrastructure in New Zealand and Australia. TAG Oil is poised for significant reserve and production growth with several oil and gas fields under development and high-impact exploration in proven oil and gas fairways. TAG Oil is debt-free and currently has 85,282,252 shares outstanding.
Cautionary Note Regarding Forward-Looking Statements and Disclaimer
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. Such statements can generally, but not always, be identified by words such as "expects", "plans", "anticipates", "intends", "estimates", "forecasts", "schedules", "prepares", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. All estimates and statements that describe the Company's plans relating to operations are forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties. Actual results may vary materially from the information provided in this release, and 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.
Other factors that could cause actual results to differ from those contained in the forward-looking statements are also set forth in filings that TAG Oil and its independent evaluator have made, including TAG Oil's most recently filed reports in Canada under National Instrument 51-101, which can be found under TAG Oil's SEDAR profile at www.sedar.com. TAG Oil undertakes no obligation, except as otherwise required by law, to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors change.
Disclosure provided herein in respect of boe (barrels of oil equivalent) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Certain information in this release may constitute "analogous information" as defined in NI 51-101, including, but not limited to, information relating to areas with similar geological characteristics to the lands held by the Company. Such information is derived from a variety of publicly available information from government sources, regulatory agencies, public databases or other industry participants (as at the date stated therein) that the Company believes are predominantly independent in nature. The Company believes this information is relevant as it helps to define the reservoir characteristics in which the Company may hold an interest. The Company is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor and in accordance with the COGE Handbook. Such information is not an estimate of the reserves or resources attributable to lands held or to be held by the Company and there is no certainty that the reservoir data and economics information for the lands held by the Company will be similar to the information presented therein. The reader is cautioned that the data relied upon by the Company may be in error and/or may not be analogous to the Company's land holdings.
SOURCE TAG Oil Ltd.
For further information: Chris Beltgens, Vice President, Corporate Development, Phone: 1-604-682-6496, Email: email@example.com, Website: http://www.tagoil.com/, Blog: www.tagoil.com/media-center/tag-oil-blog/