The Cheal-B7 well is located within TAG's 100%-owned Cheal oil and gas field, located in Petroleum Mining Permit 38156 in the Taranaki Basin of New Zealand.
The Cheal-B7 well was drilled to a total depth of approximately 2,100 meters and encountered a total of 18 meters of high quality oil-and-gas-bearing sands within the targeted Urenui and Mt. Messenger Formations, located to the northeast and up-dip of TAG's recent Cheal-B5 oil well discovery.
With the Cheal-B7 well, TAG is currently producing more than 4,000 BOE's per day with light oil contributing approximately 70% to that daily production figure. In addition, TAG has another 3,500 BOE's per day of production, which is drilled and sitting behind pipe awaiting the expansion of the Company's infrastructure, which will allow this "behind pipe" production to be brought onstream.
These production figures do not include any production arising from the successful drilling of the Cheal-B6, Cheal-A9 and Cheal-A10 wells, which are currently being production tested. The Cheal-B6 well encountered 14 meters of oil-and-gas-bearing sands within the Urenui and Mt. Messenger Formations while the Cheal-A9 and Cheal-A10 wells encountered 10.5 meters of net pay and 13 meters of net pay respectively within the targeted Urenui Formation.
TAG CEO Garth Johnson commented,"TAG's Taranaki drilling continues to achieve very significant results, which now stands at 14 consecutive successful wells. The Cheal-B6, A9 and A10 wells will be tested over the next few weeks, and with another 10 wells planned in Taranaki this year, along with workovers to certain existing wells, we will continue to build our reserve base and oil and gas production. In order to facilitate the anticipated new oil and gas production, further expansion to the Cheal Production Facility is now underway, which will ensure that all current and future Cheal wells can be produced concurrently."
About TAG Oil Ltd
TAG Oil Ltd. (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 more than 1,300 sections of land in the onshore Taranaki and East Coast Basins of New Zealand's North Island.
In the East Coast Basin, TAG has entered into a farm-out agreement with Apache Corp to explore and potentially develop the major unconventional resource potential estimated in the tight oil source-rock formations that are widespread over the Company's acreage. These oil-rich and naturally fractured formations have many similarities to North America's Bakken source-rock formation in the successful Williston Basin.
"BOEs" 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. 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. These statements are based on certain factors and assumptions including;
A. all estimates and statements that describe the Company's objectives, goals, or future plans relating to the seismic, testing and drilling programs in Taranaki 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, well performance, the success of any operations, completing infrastructure and the costs necessary to complete the operations; and
B. those relating to TAG Oil's successful exploration and development of its oil and gas properties within the Cheal and Sidewinder project areas, the production and establishment of additional production of oil and gas in accordance with TAG Oil's expectations at Cheal and Sidewinder, well performance, the completion of new infrastructure at Cheal and Sidewinder, the increase of cash flow from new production, oil and gas price assumptions and fluctuations, foreign exchange rates, expected growth, results of operations, performance, prospects, evaluations and opportunities and effective income tax rates. While TAG Oil considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. 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.
TAG Oil is involved in the exploration for and production of hydrocarbons, and its property holdings with the exception of the Cheal and Sidewinder project areas are in the grass roots or primary exploration stage. Exploration for hydrocarbons is a speculative venture necessarily involving substantial risk. There is no certainty that the expenditures incurred on TAG Oil's exploration properties will result in discoveries of commercial quantities of hydrocarbons. TAG Oil's future success in exploiting and increasing its current reserve base will depend on TAG Oil's ability to develop its current properties and on its ability to discover and acquire properties or prospects that are producing. But, there is no assurance that TAG Oil's future exploration and development efforts will result in the discovery or development of additional commercial accumulations of oil and natural gas.
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 and its independent evaluator have made, including TAG's most recently filed reports in Canada under National Instrument 51-101, which can be found under TAG's SEDAR profile at sedar.com/.
TAG 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.