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Vancouver, British Columbia, Canada, 2010/09/15 - Canadian-listed, New Zealand oil and gas producer, TAG Oil Ltd. (TSX-V: TAO), reports that the Company has acquired 100%-interest in Petroleum Mining Permit 38156-D. TSE: TAO
Canadian-listed, New Zealand oil and gas producer, TAG Oil Ltd. reports that the Company has acquired 100%-interest in Petroleum Mining Permit 38156-D, which contains the Cardiff gas/condensate discoveries located onshore in the Taranaki Basin, New Zealand. This interest was acquired from the receivers and liquidators of the previous operator of PMP 38156-D, and its joint-venture partner, the New Zealand state-owned utility.
The Cardiff structure has been identified as a large anticlinal trap, some 12 km long by 3 km wide, with a number of potential pay zones within the Kapuni Sands Formation. The Cardiff gas/condensate discovery has the potential to become a substantial onshore resource, situated on trend and among several sizable deep gas/condensate discoveries in the Taranaki Basin, including the nearby landmark Kapuni Field, New Zealand’s first major onshore discovery, and the prolific Mangahewa and Pohokura gas fields.
Gas with rich condensates was discovered at Cardiff within the upper Kapuni zone, which encountered 12m of net pay and flowed at over 3 million cubic feet and 100 barrels of condensate (light oil) per day with improving rates observed on long-term testing. This zone can be identified on 3D seismic to be a prospective target across the span of the Cardiff structure. Furthermore, even greater resource potential exists in the deeper K1A and K3E zones, where strong gas shows were encountered over a gross 600m interval. This will be a primary target in future Cardiff wells.
Access to market for Cardiff gas is relatively straightforward, being situated just 3-km from a tie-in to TAG-owned gas infrastructure. This tie-in provides a link to the high-capacity LTS gas pipeline and the thriving North Island gas market. This acquisition comes at a time of strong demand, tightening supply and record-high contract gas prices in New Zealand, providing a number of commercial opportunities for developing Cardiff gas.
TAG plans to recommence development of Cardiff targeting the various gas/condensate zones with rapidly advancing horizontal-drilling and multi-stage fracturing technologies developed specifically for these types of tight-sand gas reservoirs. Porosities and permeabilities found within the multiple Kapuni Sands Formation zones encountered in the Cardiff-1 (5050m total depth), Cardiff-2 and Cardiff-2A sidetrack (4931m total depth) wells are analogous to prolific tight-sand formations found in Germany, Holland, the North Sea and numerous basins in the U.S. and Canada, where these technologies have been successful in achieving dramatic increases to flow rates and overall reserve recovery.
Permit PMP 38156-D resides within the same permit boundary as TAG’s Petroleum Mining Permit 38156-S, where TAG is currently producing oil and gas and developing discoveries in shallower formations. This acquisition effectively ends the previous split of the permit and TAG now controls 100% of all prospective formations within Petroleum Mining License 38156.
Mr. Garth Johnson, CEO of TAG commented, “This acquisition not only positions TAG with a prime onshore gas and condensate development opportunity in close proximity to our own infrastructure, it secures 100%-control over title to the PMP 38156 production license. TAG is building its near-term cash flow through development of the shallow discoveries, and can now apply our highly efficient business model to exploiting the extensive multiple-zone hydrocarbon potential within this Taranaki Basin permit.”
About TAG Oil Ltd
TAG Oil Ltd. (tagoil.com) is a Canadian-based company with international operations in New Zealand. The Company holds a drill-ready prospect inventory that covers more than 3,500 sections of land in the Taranaki and East Coast basins, including a 100% interest in the producing Cheal oil and gas discoveries now under appraisal and development.
In the East Coast Basin, TAG is planning a drilling campaign to further investigate the major unconventional resource potential that has been demonstrated in the Waipawa and Whangai fractured shale source-rock formations that are widespread across the Company’s acreage. The geological characteristics of these formations compare favourably to oil-rich shale formations such as the Bakken Shale in the Williston Basin and Liassic Shale in the Paris Basin.
Cautionary Note Regarding Anticipated Results and Forward-Looking Statements
Statements contained in this news release that are not historical facts are anticipated results and 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 actual results realized in the future would 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.
TAG Oil is involved in the exploration for, and production of, hydrocarbons, and all of its current property holdings, with the exception of the Cheal Oil Field, are in the grassroots 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 anticipated results and 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.