TAG Oil Blog

Taranaki Basin Oil and Gas Operations Update

Posted by Denise della Santina on Oct 23, 2012 11:49:00 AM

We’ve kept you up-to-date with photos of our infrastructure upgrades, but we also wanted to keep the word out that drilling and exploration continue, even amidst the important infrastructure upgrades underway to free up behind-pipe oil and gas production.

Operationally, this year’s results have exceeded expectations, with 19 Taranaki wells drilled in a row, while simultaneously maintaining testing operations, optimization, infrastructure build, geoscience and even more drilling.

Current production is approximately 2,100 barrels of oil equivalent per day (boe), and we expect this to grow to exit fiscal year yeard (March 31) at approximately 4,000 boe. And although drilling plans need to remain flexible during our heavy infrastructure activity, the Nova-1 drill rig has spud the Cheal-B8 well, potentially followed by Sidewinder-5 and Sidewinder-6, to finish calendar 2012 strong. Cheal-B8 will be the third well drilled targeting similar geological characteristics as the high-deliverability Cheal-B5 and Cheal-B7 oil and gas wells.

And of course the ever-important infrastructure upgrades: We’re looking forward to having those fully completed in March 2013, at which point all Cheal and Sidewinder wells will be placed into full-time production. Now it’s back to work!

TAG Cheal Pool Production

Topics: Cheal Production Facility, Taranaki, Cheal Oil Field

High-impact frontier exploration in New Zealand’s East Coast & Canterbury Basins

Posted by Denise della Santina on Oct 11, 2012 11:48:00 AM

describe the imageAmong all the infrastructure upgrades underway to open the throttle on yield and production in the Taranaki Basin, we never lose sight of our major exploration potential: We have had great exploration success thus far but we still have bigger aspirations!

East Coast Basin activities with partner Apache Corp -- which has agreed to spend up to $100 million to conduct a multi-phased exploration, appraisal and potential development program -- are progressing well. If the necessary drilling consents are obtained from district and regional councils in a timely manner, TAG and Apache anticipate well-site construction to begin in the first quarter of calendar 2013, followed shortly by drilling operations.

To increase the Company’s high-impact opportunities in under-explored areas, TAG has also been actively seeking and acquiring rights to other strategic permits.

First is TAG’s summer acquisition of two new East Coast Basin permits totalling 842,000 onshore acres, which will become a focus of exploration work in the coming years.

We also recently acquired over a million acres of frontier exploration permits situated both offshore and onshore in New Zealand’s Canterbury Basin, an under-explored high potential area with geological similarities to Taranaki. In this South Island acreage, TAG is currently planning an 80 km 2-D seismic program to identify new leads and prospects.

Offshore drilling scheduled for 2013 and 2014 by majors like Anadarko, will allow TAG to focus onshore initially, while holding considerable upside related to its near-shore acreage directly updip of their scheduled deep water offshore wells.

Topics: East Coast Basin, unconventional oil, tight oil, Canterbury Basin

Credit Suisse analysis? TAG Oil is differentiated from its peers.

Posted by Denise della Santina on Oct 5, 2012 8:50:00 AM
Credit Suisse logo

Credit Suisse has initiated coverage of TAG Oil, citing the company’s “layers of success” that include its portfolio of assets, location of operations, strong balance sheet and successful track record and demonstrated ability to execute.

What they specifically highlighted:

  • The 5,000 boe/d in behind pipe production that TAG is set to bring in by Q1/13 will contribute cash flow to a strong net cash balance of C$106 million at FQ1/13. That, plus the lack of long-term debt, will enable the Company to continue to self-fund its growth.
  • 380AandF prod 2012TAG’s proven success in the Taranaki Basin, and the Basin’s multiple layers of prospective hydrocarbon zones: the shallow basin plays of Cheal and Sidewinder which are fueling growth and profitability now, as well as the deeper condensate- rich plays of Hellfire and Cardiff, which will drive midterm growth in FY 2013 and 2014.
  • The potential of long-term tight oil: As exploration with Apache Corp continues in the East Coast Basin, the value generation potential of 13 billion barrels OOIP estimated in TAG Oil’s permit assets could be significant. 
  • New Zealand operations provide a low geopolitical risk, operating and transportation costs are lower cost than many North American oil and gas producers, and there are no seasonal considerations that impede many Canadian drilling operations.
You can access contact information for the Credit Suisse research analyst covering TAG Oil here.

Topics: East Coast Basin, Cardiff, Hellfire, third-party reports, unconventional oil, Financial coverage, Taranaki, Announcements, Apache Corp, New Zealand, Cheal Oil Field, tight oil