VANCOUVER, Jan. 16, 2018 /CNW/ - TAG Oil Ltd. (the "Company" or "TAG Oil") (TSX: TAO and OTCQX: TAOIF) is pleased to provide the following update on its operations in New Zealand and Australia.
New Zealand Exploration Drilling
TAG Oil and its joint venture partner (Melbana Energy - 30% WI) have begun operations on the Pukatea-1 exploration well. The Nova-1 drill rig is expected to be mobilized to the drilling pad by mid-January, with drilling expected to commence on or around January 25, 2018 from the existing production pad. The Puka permit (PEP 51135, 70% TAG Oil) covers an area of approximately 85km2 (21,000 acres) and is located close to existing infrastructure and several low-cost alternative development paths.
The primary objective of the Pukatea-1 well will be the deep Tikorangi Limestone formation, which will be drilled to a total depth of ~3,170m. The Pukatea-1 well is adjacent to the Waihapa oil field that has produced more than 23 MMbbl from the Tikorangi Limestone and where individual wells produced up to ~5,000 bbl/d. In addition to the high impact Tikorangi Limestone exploration opportunity, TAG Oil has identified a secondary objective to intersect in the shallower Mt. Messenger formation while drilling on the way to the deeper target. This has resulted in some technical adjustments to the drilling plan, which include adding an additional wireline logging run for data gathering and an additional casing string to isolate the Mt. Messenger formation.
The updated design for the wellbore path is expected to intersect the Mt. Messenger sands approximately 150m east of the Puka-2 wellbore (currently shut-in and awaiting a work-over). The Puka-2 well tested 719 bbl/d of oil over a 12-hour period on a 22/64" choke back in April 2013.
New Zealand Production
TAG Oil expects to exit fiscal 2018 at March 31, 2018 in New Zealand with production of ~1,300 boe/d. Between now and fiscal year-end, the Company is planning a number of well clean-outs, pump changes, and workovers. In addition, TAG Oil will focus a moderate amount of time and capital on optimizing the waterflood program.
TAG Oil's waterflood program is continuing, with water injection rates of ~1,400 bw/d at the Cheal permit (PMP 38156, 100% TAG Oil) and ~800 bw/d at the Cheal East permit (PEP 54877, 70% TAG Oil). Based on injection rates and pressure data in the main Cheal permit field, current expectations are that a more definitive uplift of production and recovery factors will likely be seen by mid-2018.
In Australia, production from the Bennett field is approximately 20 bbl/d of light, sweet crude following improvements to the surface facilities at PL-17 and a pump change on the Bennett-4 well. Further, TAG Oil is encouraged by the continued steady production from the field despite it having been on production for approximately 50 years. The current mapping (ahead of the interpreted 3D seismic data) indicates the potential for further upside. TAG Oil will continue its work on enhancing production from the existing wells on the block.
TAG Oil's interpretation and processing of the first modern 3D seismic recently acquired over of the core of the PL-17 acreage is nearing completion. The 70km2 of 3D seismic will provide an enhanced subsurface understanding of the Bennett and Leichardt fields and allow various drilling targets to be identified, with future drilling likely occur in late calendar 2018 or 2019.
Toby Pierce, TAG Oil's CEO commented, "I am excited that Pukatea-1 is about to commence drilling. Along with the significant potential in the Tikorangi Limestone, we also have a secondary target in the Mt. Messenger formation that is expected to be part of the existing Puka field. Further, with the significant increase in Brent Oil prices over the last few months (~50% in six months) TAG Oil will generate more cashflow per barrel of oil produced and may see an appreciation in its equity value as the stock market starts to appreciate the strengthening fundamentals in the market. Finally, I'd like to highlight the fact that our waterflood is starting to work on the Cheal East pool with an increase in pressures month over month, and we expect pressures and production to continue to rise accordingly from all four of our waterflood projects through 2018."
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 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 TAG Oil's plans relating to operations, including the Cheal permit, Cheal East permit, Puka permit, and PL-17 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.
TAG Oil has adopted the standard of six thousand cubic feet of gas to equal one barrel of oil when converting natural gas to "boes" that may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 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.
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 protected], Website: http://www.tagoil.com/, Blog: www.tagoil.com/media-center/tag-oil-blog/