TAG Oil Blog

Drilling Deep in the Taranaki Basin

Posted by Denise della Santina on Sep 19, 2013 8:27:00 AM

The team spudded the Cardiff-3 well on September 2nd, and we expect it will take six weeks total to reach its projected depth of 4,900 meters. As of yesterday, we were at about 1,000 meters.

This is the kickoff to our high impact, deep drilling campaign in Taranaki, which will run over the next six months, and it’s the first well to target one of our Kapuni Formation prospects. 

Kapuni, below the surface

The Kapuni Formation, comprised of the deep Oligocene and Eocene strata, is responsible forScreen Shot 2013 09 18 at 5.43.50 PM several major discoveries where 2P (proven and producing) reserves of 6.9 TCF gas and 372 mmbls oil/condensate have been discovered so far. This includes Shell’s nearby Kapuni Field, which has produced 1.5 TCF gas and 65 million barrels of condensate to date.

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.

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. And 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 the Cardiff-3 well.

And the big picture above the ground

More as this well, and our expanded Taranaki program as a whole, progress. We’ve got two drill rigs actively operating, and a third rig that will begin operating on our permit shortly, all within Taranaki’s main discovery fairway.

Things are rocking and rolling, and we’ll do our best to keep you informed!

Cardiff-3 deep well

Topics: Cardiff, Taranaki, Kapuni gas/condensate, Cardiff Deep Gas

Prepping for a 12-well kickoff

Posted by Denise della Santina on Aug 15, 2013 9:52:00 AM

This coming weekend marks the kickoff of our 12-well drilling campaign, fully funded with income from the sale and production of TAG Oil's own Taranaki oil and gas, and the Company's strong balance sheet.

We'll start with the Cheal E-1 well, which continues TAG's shallow drilling program, and our first high-impact, deep gas well, Cardiff-3. should spud about four weeks later. Let's see if our unprecedented streak can continue. More reports soon as events unfold....

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Topics: Taranaki, Cheal Oil Field, Cardiff Deep Gas

Praise and mutual respect at the Ngaere Cheal Plant Opening

Posted by Denise della Santina on Jun 15, 2013 12:11:00 PM

New Zealand Prime Minister John Key officially opened TAG Oil’s expanded gas production plant at the Cheal-A site last Friday. About 100 others joined the festivities, including government ministers, representatives of Taranaki's Ngati Ruanui, North American analysts, principals from local elementary and high schools, landowners, and regional organizations who may soon be hosting other explorers, as New Zealand expands its search for oil and gas.

Prime Minister Key flew to Taranaki to show the government’s full support of TAG Oil and New Zealand’s commitment to its energy sector: "Taranaki is a magnificent example of the energy industry's potential to create employment and income. The region shows that if you get it right, there's huge potential for a safe, environmentally sensible and highly productive way of bringing wealth to New Zealand."

Debbie Ngarewa-Packer, South Taranaki's Ngati Ruanui iwi chief executive, was equally positive, thanking TAG for "investing in this nation and for investing in Ngati Ruanui." She continued with her praise of TAG’s open communication with both the Taranaki iwi and Cheal’s neighboring farmers from the start. 

As TAG Oil COO Drew Cadenhead expressed at the opening, we in turn are fully appreciative of our neighbors, our valued local workers and the New Zealand government for their support. We’ve been in the business long enough to never take trust and mutual respect for granted.

Image 7 resized 600After the breakfast and speeches, New Zealand Prime Minister John Key sent the gas production plant into full production with a few mouse clicks, and then toured the facility.

Image 6

Cheal Plant opening ceremonies graced by
a Ngati Ruanui dance.

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PM John Key etches his initials into the ice on the gas refrigeration unit.

Topics: Cheal Production Facility, Taranaki, Announcements, New Zealand, oil and gas production

TAG Oil as Taranaki Basin corporate citizen

Posted by Denise della Santina on Jan 3, 2013 12:08:00 PM

One way TAG Oil is pleased to support our community is by helping to refurbish Ngaere School’s Lowgarth Hall with a $5,000 a year award for the next five years. This year’s grant went towards upgrading the lighting and heating systems. Though New Zealand is in the midst of summer, they’re looking ahead, and this work will make the Hall much more comfortable for the many groups that use it year-round. In addition, the upgrades will reduce the amount of energy used, and the school’s power bills.

TAG Oil as Taranaki Basin corporate citizenIn other community news, TAG awarded its first annual scholarship to Matt Simpson, a senior at Stratford High School. Matt was selected to receive the scholarship out of a worthy field of candidates based on his impressive academic career as well as his interest in pursuing an engineering or sciences degree. He’s spending his summer working at TAG Oil’s Cheal A site, gaining some first-hand oil and gas experience prior to going to the University of Canterbury.

Whether you’re rounding the bend towards shorter nights and warmer days, or celebrating your longest day of the year in the southern hemisphere, happy holidays and all the best for your new year.

Topics: Taranaki, Announcements, New Zealand

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. 

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

tag oil new gas plant alberta 92512

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

Sidewinder Facility: updating TAG Oil’s gas-processing capacity

Posted by Denise della Santina on Jun 27, 2012 10:29:00 AM

With the number of oil and gas wells TAG has online, waiting to come online, and yet to be drilled, we’ve been upgrading the infrastructure of our Cheal and Sidewinder oil and gas production facilities to ensure that we have the capacity to handle existing and future production.

Sidewinder’s compression unit has been installed and is now operational at full capacity with only two of four wells maintaining this capacity. These high deliverability reserves are being conservatively produced at approximately 8-10mmcf/d with the single compressor to ensure many years of profitable operations from the Sidewinder Production Facility. The Production Station has been purposely built in modules that will allow further expansion should drill results (we hope) warrant. 

TAG 004 sidewinder jun12
Sidewinder Production station entrance with beautiful Mt. Taranaki in the background.
TAG006 compressor jun12
Here’s the new compressor being fine-tuned. This is the unit that should increase field production to 8 to 10 million cubic feet of gas per day in the near future.
TAG 002 geymouth jun12
An interesting shot that shows our neighbor Greymouth Petroleum and the Tiger-1 drilling rig in the background; gives you a feel for how close they’re drilling to TAG‘s property.

Topics: Taranaki, Sidewinder Production Facility, oil and gas production