TAG Oil Blog

Launching FY 2014 from a great platform

Posted by Denise della Santina on Jul 8, 2013 12:48:00 PM

Here are a few excerpts from TAG Oil’s 2013 year-end conference call, conducted by Chief Executive Officer Garth Johnson, and Chief Operating Officer Drew Cadenhead on 28 June. You can listen to the full podcast here, see details and financials in the year-end press release here, and access the Company’s MD&A / Annual Report here. But these excerpts have some pretty interesting pieces of information shared by Garth and Drew.

The transcript is from Thompson Reuters, and the subheads are ours for your scanning convenience. Needless to say, we’re chomping at the bit to get our next phase of exploration underway!

Drew on TAG’s reserve estimates….

“With a lean team of only about a dozen professionals handling all the operations down here in New Zealand, we knew that focusing on a major infrastructure build-out project as we did would result in a minor slowdown of drilling operations. Now, we still managed to drill six new wells in Taranaki this year, all successful, and our first ever unconventional tight oil test on the East Coast Basin, and I'll be discussing these projects in more detail later in this conference call.

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As far as how our reserve situation looks, we are pleased to announce a moderate growth in 2P reserves even though we concentrated most of the year on successfully completing this major infrastructure project. We produced a total of 641,000 BOEs during the year on an average or an average of about 1,750 as Garth said. Taking that production into account, we managed about a 4% increase in 2P reserves to 6.1 million BOEs, and we maintained our NPV10 at a little over $200 million. It's noteworthy that 88% of our 2P reserves are oil.

We feel timing didn't help us with the actual optics of this year's reserve report. With a fiscal year end of March 31 and then project start-up date of March 27, we didn't have time to bring a lot of our behind pipe production on-stream to provide sufficient data to Sproule for this year's report. As a result, Sproule is mandated by the rules of National Instrument 51-101 to volumetrically estimate proven and probable reserves in newly drilled areas. 

Now, the original discovery wells in Cheal have now been producing since August 2007. So, we have nearly six years of production data on some of our wells now to help us determine how our new wells will behave and produce over time. What we know for sure is all our wells produce far greater ultimate reserves than what was historically predicted using early volumetric data.

A great example of this is Cheal-B3, which after the first year of production was volumetrically assigned ultimate recoverable reserves of 70,000 barrels. Now, after only five years — don't forget most of these wells will have a 15-year to 20-year reserve life — that particular well has produced about 400,000 barrels. Once we get a few years of production history under our belts for each pool, Sproule can revert to using a decline analysis to determine ultimate recoverable reserves. That analysis more accurately reflects the nature of our drainage areas for these Miocene turbidite reservoirs.

The seismic sees the sweet spot that's where we drill, but the ultimate drainage occurs over a much larger area than just that sweet spot. That's the situation we find ourselves in this year with a number of our new wells: Sproule doesn't have enough production history to use a decline analysis yet, so instead they map the sweet spot volumetrically and assign what we think are very conservative reserve numbers. This is particularly evident at Sidewinder, where our new wells, as Garth mentioned, Sidewinder-A5 and Sidewinder-A6 were volumetrically assigned a total of approximately 0.5 Bcf of ultimate recoverable reserves between the two wells in this year's report.

In the first 90 days of production since fiscal year-end, those two wells have now surpassed that reserve allotment, and they show no signs of slowing down. There will obviously be reserve upgrades next year, but the result of this overly conservative reserve assessment in all our new wells definitely separates what we estimate internally for TAG reserves from what Sproule has assigned us this year.

At Sidewinder, this discrepancy has resulted in an impairment on the property this year given
we have the long consenting delay in getting these new wells drilled, as Garth mentioned002 earlier, and then only a few weeks' production data before our fiscal year-end. We're actually considering commissioning a mid-year reserve report update this year, which given the production data we have achieved since the cut-off for this year's report, we are certain will materially affect the reserves we're disclosing at this time.

One thing I would like to mention with respect to our reserves is that 80% increase in 2P original oil in place Sproule has assigned to our core producing formation in Taranaki, the Mt. Messenger formation. This increase in recognized 2P original oil in place can be attributed to Sproule's recognition of the extent to which bearing sands must be contributing to production from individual wells. It stems back to the comment I just made on volumetric reserve determination versus decline analysis earlier.

Sproule is now starting to concede that much larger areas of gross sands have to be contributing to the production from our wells in order to balance existing well performance with volumes in place. The alternative is to assign unlikely recovery factors greater than 60% or 70% to the existing areas to account for what we've already produced. Now what this all means is a very positive outlook for continued additions of proven and probable reserves in the future of our core properties.

Now, I know original oil in place doesn't have any bearing on our NPV now, what it does mean is an independent third-party recognizes the extent of the oil accumulations within our properties and it is only up to TAG to keep drilling and shift those original oil in place numbers to proven reserves.

To date, we have drilled up less than 25% of the Cheal Mining License and 10% of Sidewinder. We've just increased that acreage further with a successful 2012 blocks offer award more than doubling again our acreage right adjacent to these proven areas. So, we're looking forward to many years of continued drilling on this core shallow cash flow machine that we have established now in Taranaki.”

Garth on projects in this year’s pipeline…

“TAG shareholders will be participating in a program that's never been seen in New Zealand before, never been done before, with the potential for some very significant results.

005We've contracted four rigs to be working simultaneously to drill a minimum of nine shallow Taranaki wells, two deep Kapuni wells in Taranaki, and at least one more East Coast unconventional well in the next six to nine months with a cost to TAG of approximately $39 million. It is fully funded using cash flow on our strong balance sheet.

I think this ability to commit to such a program is what separates TAG from any other junior explorers, and we are doing so with confidence that we'll — that what we drill stands up technically and can be done safely, methodically to obtain the best results possible.

We have established low risk baseline production and cash flow at Cheal and Sidewinder, got many more years to drill there. We have an understanding now regarding the relatively low declines associated with the shallow production. We've maintained a respectable capital structure with less than 60 million shares outstanding. We have got a strong balance sheet, no debt, 100% of our infrastructure is owned, and the infrastructure is built to meet our needs for the future.

A lot of other companies are scrambling and needing to dilute to carry out their programs, to complete acquisitions, and doing so with probably three to four times more people on the payroll. So, we are pretty proud of what we've resulted and the foundation that we built that would carry us into the future.

Fiscal year 2014 provides our shareholders with a number of new drilling catalysts and success in one or all of the plays that we are going to be drilling inclusive of the deep Kapuni plays, the East Coast unconventional, and possibly even Canterbury. It will get TAG the opportunity to become a much larger producer and a reserve-based company.

We look at the nine shallow Taranaki wells to be drilled by the end of calendar 2013 as an opportunity to increase our reserves, maintain and possibly grow our baseline production and cash flow, and continue this for many, many years at relatively low risk. It also allows us to add deep drilling and more focus to our East Coast operations, and we have brought in a JV partner in East West Petroleum to our shallow Taranaki program that allows to focus on the deeper and the East Coast plays, and we also have a carry on those initial Taranaki plays up to $10 million, which mitigates a little bit of risk on that shallow play.”

Drew on the Heatseeker deep prospect…

“Now after Cardiff comes the play that probably excites me the most, Heatseeker is a classic explorer's prospect. Picture this: a massive anticline feature, almost a perfect upside down mixing bowl sitting on a table. That's what the 1.5 Tcf Kapuni field looks like on seismic. That pool was discovered in the '50s, has only 18 wells into it, but has drained over a Tcf of gas, 65 million barrels of condensate to-date, and it keeps on spewing hydrocarbons today.

Now, picture right beside that upside down bowl on the table, what looks like an identical upside down bowl sitting right beside it. The only problem is someone has erected a wall, so you can only see three quarters of that bowl. That's Heatseeker, three-way dip closure is clearly seen on existing seismic, but the fourth and critical direction of dip closure is situated right under Egmont National Park where Mount Taranaki, our picturesque volcano is situated. No seismic has ever or will ever be shot in this park.

The nature of the structural belt in this area suggests that there will be that critical fourth direction of closure, but there is only one way to find out and that's to drill a well. We've got a deep rig contracted. We have a service access agreement signed. We'll move the rig on right after Cardiff and find out. As Garth said earlier, any one of these deep plays has the potential to really transform TAG if we're successful.”

Drew on the East Coast Basin…

“We can't give up too much detail at this stage as there is a critical land sale occurring in New Zealand later this year, bid deadline is September 26, and there are few blocks up for bid offsetting us within the East Coast Basin. But I can tell you, we are extremely proud of the operational job we did in the drilling of our first deep test on the East Coast.

Ngapaeruru-1 was drilled without a hitch in about three weeks. We anticipated and encountered extreme overpressures. We encountered swelling mud stones and a few other nasty drilling obstacles that have been a nemesis of past drillers in this tricky basin. But again, our combination of Kiwi experience and North American technology allowed us to drill our well easily, collect all the critical data we intended to, and not have a single environmental health or safety issue.

The small minority of anti-fossil fuel opposition we had before we spudded the well barely had time to organize a protest before we were gone. The vast majority of our neighbors there, all of the regulatory bodies like local and regional councils couldn't believe what a professional operation it turned out to be. Drilling is new to these people. I think they were expecting wooden derricks and a spindle top blowout or something.

The results of this first well were encouraging, to say the least. In order to keep that over pressuring in check, we took no chances and used extremely heavy mud weights while drilling. Despite that, we went from over 1,000 meters of zero oil and gas shows through the over burden to instantaneous strong shows once we entered our target zone. Those shows continued unabated for 155 meters before they instantly disappeared to absolutely no shows again until TD, and that tells us a couple of things.

Number one, the seal looks to be working as no shows were seen above the zone. The zone itself definitely has hydrocarbons in it, but of course that was expected. We knew these source rocks were working from the quality and quantity of oil and gas seeps in this basin, but probably most important is that there seems to be permeability associated with the zone. That's the only way we would see the shows we did even given the high mud weights we were using.

We collected a lot of core, we shot Schlumberger's logs I've never even heard of before focusing on unconventional parameters and we collected live samples of liberated gas from the drilling mud itself. All of this data is now in various labs, mainly in New Zealand and Australia, where we're working with specialists from around the globe to interpret and plan the next step to be taken with the play, and in particular this wellbore.

What I can tell you is, we would definitely be completing this well, probably not for at least three to four months until we get all the data back from the labs and it's all interpreted, but Ngapaeruru-1 was not a red light, it was not an orange light, it is definitely a green light from what we have seen so far.“

Conversation with analyst David Phung about production numbers…

David Phung:  “So, current production is about 2,660s and you still have two wells behind pipe. What do you expect the production to be after you bring those wells on? …. I remember last time you were expecting yield the second half of this year, you'll be averaging around that 3,000, do you need to bring that down a little bit considering that you are going to be at 3,000 already once you bring these wells on?”

Drew Cadenhead:Yes, we've got a couple of wells behind pipe still to tie in. We also have two of our key wells just undergoing regular maintenance, wax-cutting right now. So, given that we've tested all these wells, we do expect production once all wells are on shortly here to be at about 3,000 BOEs a day.  …  Most of the wells we brought on now are — have moved into that stabilized production flow, that really slowed decline section of our curve now, and we're still optimizing wells as we move forward here. Part of our biggest push in the last month or two here is to go well by well and look at our pumping procedures. And each well we do, we're making a little bit of improvement on each one, a little bit of gains. So at this time, I think we'll leave guidance as we said in that 2,500 to 3,000 barrel range for the rest of the year, and if that changes, we'll certainly let you know.“

Discussion of Cheal C3 becoming an oil well after its initial gas flow…

David Phung:…You're saying that the Cheal-C3 well, you are seeing an increased oil rate over time and you're needing to install oil pumping equipment there. Is that the only well where you're experiencing that and what are the before and after oil [cap]?”

Drew Cadenhead: “You're breaking up a little bit there, David, but I think I've got most of that question. Cheal-C3’s starting to look like it's more like an oil well, and do we have any other wells like that? We have one other well like that; it's Cheal-A8, which originally on initial 15-day test showed itself as a pure gas well. We built facilities to assume that.

Same thing with C3, we have built facilities to assume that, but on further production from those wells, we noted that they very quickly turned to predominantly oil producers.

So, obviously, a streak of gas sand within these multilayer turbidite sands, but the rest of them being oil: gas is obviously going to flow preferentially to oil first. So once that initial streak of the gas sand had spewed out, the oil started coming afterwards. So we're shifting two wells that we previously thought were going to be gas wells, Cheal-A8 and Cheal-C3, into Cheal oil producers with our regular pumping configurations.”

David Phung:Okay. So it's not, the gas is from a different interval then, it's not really a mini gas cap of any sort, right?”

Drew Cadenhead: “No. These reservoirs are not single volumes, turbidite reservoirs are a series of  — in a 20-meter section, there might be 30 different sands separated with shales that are 0.5 meter thick each. And oddly in these sands, once in awhile, we just get one of those sands that has oil or gas or even water, once in awhile in it, and the rest of them all oil, and they don't need  — particularly need — to be at the top, they could be in the middle, they could be at the bottom.

It's a very strange physical phenomena, but well proven in these Mt. Messenger and Urenui reservoirs. So, it is not a gas cap situation where we've blown off the energy from the pool. It's single lens of sand within the overall net package of sands that happen to be gas bearing, but the rest are oil bearing, it appears now.”

David Phung:Okay. And maybe just a little bit more detail on Cardiff there. How many intervals are you planning to fracture stimulate, and can you talk about in a little bit more detail on how you plan on stimulating those zones?

Drew Cadenhead:Right. There are three main zones in the Kapuni Sands that we're going to be looking at Cardiff. The top zone is called the McKee Sands, then the K1A Sand, and then the K3 Sand, the deepest one. The deepest is the thickest. Second one is the middle one and the top one is the thinnest. All three sands have been produced and tested, gas and condensate in the past in sub-economic rates. …  We'll have a clean set of logs across all three of those zones, and from those logs and from the information we gather while we are drilling, we'll plan our fracking procedure. We've got our fracking consent already in to the local regional councils here: we do plan on fracking all three zones.

We'll start at the bottom zone, the thickest zone, the K3A and take that one definitively itself first, so we will frac that, we will test it, we will give it a chance to make a definitive decision on it before if it's not economic for us, and then we will move up to the second one and the same thing, test that definitively and then move up to the final McKee sand and test that one.

So at the end of the day, we may well have a continuing completion operation going on there for the next 10 or 15 years; as one zone depletes off we'll go up to the next one, but initially we want to have a fair chance at all three, we don't want a chance any interflow between the three, we want to test each one individually and get definitive answers for each one.”

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Topics: Cheal Production Facility, Financials, Financial coverage, Announcements, Cheal Oil Field, oil and gas production, Cardiff Deep Gas, tight oil

New Zealand awards TAG acreage in the Taranaki discovery fairway

Posted by Denise della Santina on Dec 12, 2012 9:39:00 AM

2012 Block Offer Imagery 21A very pleased Garth Johnson (TAG Oil CEO) poses for a photo with New Zealand Minister of Energy and Resources Phil Heatley at the 2012 Block Offer awards ceremony.

At the ceremony, TAG Oil was awarded four onshore Taranaki Basin exploration blocks, expanding our acreage by another 37,000 gross acres. More importantly, it’s acreage that sits in the main Taranaki oil and gas discovery trend. TAG has extensive 2D and proprietary 3D seismic over much of the acreage, which indicates several new prospects that we look forward to drilling. The awards initially add at least 10 drilling prospects plus the numerous leads in close proximity to the producing Cheal oil field and infrastructure.

TAG will operate the new permits and JV partner East West Petroleum will fund four wells within PEP 54876, 54877 and 54879 in 2013, earning East West a 50% interest in PEP 54876 and PEP 54879 and a 30% interest in PEP 54877.

PEP 54873 (100% TAG) provides several shallow drilling leads along with significant exploration upside via a drill-ready deep gas and condensate prospect that has similar geological features to the adjacent Kapuni gas/condensate field.

Topics: Taranaki, Announcements, Kapuni gas/condensate, Cheal Oil Field

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

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

Cheal A, B and C sites have new photos and new progress

Posted by Denise della Santina on Sep 25, 2012 11:07:00 AM

Cheal A is bustling, with more than 100 guys working at the site at present. We’ve poured the concrete foundations for the new Cheal gas processing plant, A-11 is nearing completion, and the final hook-ups on the new power fluid pump drives (we’re pretty excited about our Schlumberger Variable Speed Drive) will be running soon.   

Cheal-C is also being transformed, and rigs are now in place at Cheal B-5. Some photos are below, and we look forward to reporting the results of these new optimizations soon.

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TAG’s Cheal-A site neighbors go on about their business, unaffected by our oil and gas production. 

tag oil cheal c site 92512

TAG now lines all its pits for extra environmental protection. Here are the skimmer pits for rainwater run-off from the Cheal C-Site. 

tag oil ensign rig 92512

The Ensign Rig #6 is loaded up and heading over to Cheal-B5, having finished its work at Cheal C-4.

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Pouring concrete foundations for TAG's new gas plant (which is being built in Alberta) at the Cheal A-Site.

Topics: Cheal Production Facility, Taranaki, Cheal-C site, Cheal Oil Field, oil and gas production

Improvements are good for TAG Oil and the neighborhood

Posted by Denise della Santina on Sep 5, 2012 10:33:00 PM
We’ve added attenuators (mufflers) on top of the power units for Nova-1 No more flaring to dirt pits for TAG! This is one of our new "flare stacks" with built in containment

(Top) No more flaring to dirt pits for TAG! This is one of our new "flare stacks" with built in containment. Though commonplace in Canada, this is a first in New Zealand. Other New Zealand operators are very interested to see how these work, as are the regulatory bodies in New Zealand.

(Left) We’ve added attenuators (mufflers) on top of the power units for Nova-1. These cut the rig noise almost in half, appreciated by neighbors and our team alike.

Cheal Production Station flare, which will be sold once the infrastructure upgrade is finished.

Cheal Production Station flare, which will be sold once the infrastructure upgrade is finished.

enjoying the winter sunshine

Here’s Jesse, a Cheal operator, enjoying the winter sunshine as TAG tankers "fill'er up."


Topics: Cheal Production Facility, Mt. Messenger, Taranaki, Cheal-C site, New Zealand, pipeline, Cheal Oil Field, oil and gas production

Tracking TAG Oil’s production, development and infrastructure

Posted by Denise della Santina on Mar 8, 2012 7:52:00 AM

We put together a simple table to bring you up to speed on TAG’s Taranaki Basin oil and gas producing and drilling activity. The table includes producing oil and gas wells, wells in development (some awaiting workover operations as well as improvements in production infrastructure, to bring additional production that’s currently sitting behind pipe, on-stream), and our next condensate targets to be drilled. Status will change quickly, but here’s a snapshot of how TAG Oil's drilling and workover program stands now.

Taranaki Shallow Drilling and Workover Program

Cheal A

A1

Behind pipe awaiting infrastructure expansion

 

A2

Waterflood workover

 

A3X

Producing

 

A4

Waterflood workover

 

A7

Behind pipe awaiting workover

 

A8

Behind pipe awaiting infrastructure expansion,

 

A9

Drilled, awaiting test

 

A10

Drilled, awaiting test

 

A11

To be drilled

 

A12

To be drilled

Cheal B

BH1

Producing

 

B1

Behind pipe awaiting workover to initiate Urenui Production

 

B2

Behind pipe awaiting workover to initiate Urenui Production

 

B3

Producing

 

B4ST

Producing

 

B5

Flowing 800 to 1300 bbls/day

 

B6

Testing

 

B7

Flowing 800 to 1075 bbls/day

Cheal C

C1

Producing; oil being trucked to the Cheal Production Station

 

C2

Excellent flow test results, behind pipe awaiting workover

 

C3

To be drilled

 

C4

To be drilled

Sidewinder 

SW1 - SW4

 

Producing 2 to 3 million cubic feet of gas per day (350–500 boe/day), and 30 to 50 barrels of light oil / day. Permanent tie-in completed. Anticipate 8 to 10 million cubic feet of gas per day once compression installed.

 

SW5

To be drilled

 

SW6

To be drilled

Topics: Cheal Production Facility, exploration well, Mt. Messenger, Urenui, Taranaki, Cheal-C site, Sidewinder Production Facility, Cheal Oil Field, Sidewinder Discovery, drilling

Keeping infrastructure apace with oil and gas discoveries

Posted by Denise della Santina on Mar 6, 2012 11:16:00 AM

Cheal Production FacilityTAG Oil’s drilling success has surpassed its facility capabilities, so we’re investing in infrastructure expansion to help us bring all production on stream. The expansion will also help to commercialize future discoveries without delay.

After drilling 14 successful oil and gas wells in a row, combined with our ongoing Taranaki drilling program, it became necessary to expand Cheal’s infrastructure, including:

  • Triple oil-lifting capacity;
  • Triple gas compression capacity;
  • Build a gas plant at Cheal capable of stripping LPG and liquid hydrocarbons from Cheal gas;
  • Build the Cheal-C site oil battery to establish permanent production from recent Cheal-C discoveries, as well as allow for future development;
  • Add new pipelines to tie the Cheal-C site to the Cheal-A site and add a new 6,000 meter pipeline from Cheal to New Zealand’s open access gas transmission line to maximize marketability of TAG’s gas production;
  • Establish TAG as a third-party gas processor in Taranaki.

Topics: Cheal Production Facility, Cheal-C site, Cheal Oil Field, third-party gas processor

TAG Oil CEO & Controller visit the field

Posted by Kris Clark on Feb 9, 2012 8:18:00 AM

On a recent trip to Taranaki New Zealand, TAG Oil CEO Garth Johnson and Controller Dan Brown snapped some photos for the blog. They were down under for meetings with the technical team and local community leaders, and of course, to experience the new developments at TAG's Cheal and Sidewinder oil and gas discovery areas first-hand. 

Ensign Rig set up to drill Cheal B7
The Ensign Rig getting set up to drill Cheal -B7, TAG's follow-up to the highly successful B5 well. Cheal-B5 had the most extensive pay interval ever recorded by a Cheal well, and the highest flow rate recorded from from a Mt. Messenger well.

Executive Assistant Dan Brown in front of B5
TAG Controller Dan Brown stands proudly in front of the Cheal-B5 wellhead. As announced December 5th, TAG perforated and flow tested 20 meters of continuous oil-and-gas pay in the Cheal-B5 well, in the 35 meters of net pay intercepted within the primary Mt. Messenger Formation. Today it’s still going strong. 

CEO Garth Johnson and Lead Engineer Jack Doyle
Lead engineer Jack Doyle and CEO Garth Johnson, in front of the Cheal-C2 discovery well. This important step-out well in TAG's C-block discovery area flow tested ~14 million cubic feet per day (~2,333 BOE/day) on a 48/64" choke, with associated condensate production increasing during testing. Located about 3.5 km's NW of TAG's Cheal-B5 well, it significantly extends the known oil-and-gas saturation area within TAG’s Cheal permit. The success of Cheal-C2 also adds another high-impact target to TAG's prospect portfolio in the Mt. Messenger and Urenui formations.

New Plymouth's Sidewinder Facility
A shot of the loading arm at the Sidewinder Facility: used to fill the oil tank in the background with oil produced from TAG’s successful Sidewinder exploration wells drilled in late 2011.  

Topics: Mt. Messenger, Taranaki, Cheal-C site, Cheal Oil Field, oil and gas production, Sidewinder Discovery

Cheal-B5 discovery well perf photos

Posted by Denise della Santina on Dec 7, 2011 5:54:00 PM

This has been a busy and exciting couple of weeks for TAG at our Cheal permit: in less than 30 days we tested Cheal-B5 (the third well in our current 10-well drilling campaign) and got it on full time production.

We didn’t know what the results would be at the time of these photos, but after perforation we flow tested 20 meters of continuous oil-and-gas pay within the 35 meters of net pay intercepted in the primary Mt. Messenger target. This is the most extensive pay interval ever recorded by a Cheal well, and includes record porosities of up to 30% and a record 60% total gas kick encountered while drilling.

Over the five-day test period, the discovery well was naturally flowing at an average rate of 1,870 barrels of oil equivalent a day, that’s 1,700 barrels of oil and 1.0 million cubic feet of gas per day flowing through a 40/64" choke. These shots are of perfing day.

Carey Davis TAG
TAG's Carey Davis kisses the firing bar for luck.
Dropping the firing bar
Dropped the bar...
Took an hour and a half for the firing bar to drop the 1700m.
Everyone grabs something metal on the rig to feel the shots fire. It took nearly a minute-and-a-half for the firing bar to drop the 1700m.
The crew waits for a pressure response.
Guns just fired…no immediate pressure response. Big gas wells almost always give immediate pressure response. Could it be oil?
A minute after perforation, pressure starts to build.
Waiting nervously for pressure response…and a minute after perforation the pressure starts to build. We knew then the news would be good.
Mt. Messenger's B-Site expansion, making room for more B wells
B-Site expansion: making room for more B wells.

Topics: Mt. Messenger, Cheal-C site, Cheal Oil Field