TAG Oil eyes 10 prospects as Taranaki development hots up
Dec. 1 (BusinessDesk) – Canadian-listed oil and gas explorer TAG Oil Ltd is planning to drill exploration wells in as many as 10 prospects identified in its 100%-owned Cheal onshore Taranaki oil and gas field.
TAG posted a C$508,823 net loss in the three months to Sept. 30 as it steps up investment in the area.
“TAG is anticipating substantial near and long-term growth in Taranaki through development of multiple oil and gas discoveries within the company’s 100% controlled Taranaki Basin assets,” said in a statement.
“The company plans to drill up to 10 prospects identified on 3-D seismic coverage, commencing in early 2011.”
These will involve development and step-out wells within Cheal, and further exploration wells in the Sidewinder project area, where TAG is moving to production from the successful Sidewinder-1 well.
“Production forecast modelling has focused initially on gas to date and results indicate the initial flow rates anticipated from Widewinxder-1 to be greater than 10 million cubic feet of gas per day, declining over 36 months to rates still in excess of five million cubic feet of gas per day.”
Oil is expected to contribute more significantly to flow rates “over time”.
“Sidewinder’s close proximity to existing gas and oil infrastructure, combined with New Zealand’s low royalties and oil and gas prices that are substantially higher than in North America, development of the Sidewinde4r discovery will be cost-effecitve, efficient and commercially attractive,” says TAG.
A workover on the Cheal B-3 production well has improved flow rates from 156 barrels of oil equivalent daily to 330 BOE, with total production from the Cheal field currently logging 570 BOE per day.
Production testing on the Cheal-BH-1 is due to commence on Dec. 5.