VANCOUVER, Sept. 26, 2011 /PRNewswire/ - Canadian-based TAG Oil Ltd. (TSX: TAO andOTCQX: TAOIF), is pleased to report that drilling operations have now resumed at the Company's 100%-owned Cheal oil and gas field, with the spudding of the Cheal-C2 well. TAG anticipates drilling five new wells at Cheal before moving the drill rig to the Sidewinder oil and gas field, both oil and gas fields are located in the onshore Taranaki Basin, New Zealand.
This next phase of development drilling will continue to target the multi-zone Miocene prospects identified on 3D seismic within the Mt. Messenger (~1800m) and Urenui (~1400m) Formations. It is anticipated that commercialization of any successful new well arising from this drilling campaign can occur rapidly through TAG's 100%-owned production facilities.
In addition to the drilling activity, TAG Oil will also initiate a water flood program at the Cheal "A" pool. This secondary recovery strategy is both good oilfield practice and can cost-effectively increase ultimate reserve recoveries, as well as increasing the net present value of the pool.
"Given the strong results of TAG's previous drilling program, including six successful exploration wells drilled in succession over a six-month time span, I'm confident this next phase of drilling will continue to yield good results," commented Garth Johnson, TAG CEO. "Now that Apache Corporation has agreed to conduct a multi-phased exploration, appraisal and potential development program within TAG's East Coast Basin exploration permits, we can utilize TAG's strong working capital position and growing cash flow to accelerate exploration and development of our high-impact Taranaki acreage."
TAG Oil Ltd.
TAG Oil Ltd. (http://www.tagoil.com/) is a Canadian-based production and exploration company with operations focused exclusively in New Zealand. With 100% control over all its core assets, including oil and gas production infrastructure, TAG is anticipating substantial oil and gas production and reserve growth through development of several light oil and gas discoveries. TAG is also actively drilling high-impact exploration prospects identified across more than 2,600 sections of land in the onshore Taranaki and East Coast Basins of New Zealand's North Island.
In the East Coast Basin, TAG has partnered with Apache Corporation to pursue the significant unconventional resource potential estimated in the fractured shale source-rock formations. These oil-rich and naturally fractured formations have many similarities to North America's Bakken Shale source-rock formation in the successful Williston Basin.
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this news release that are not historical facts are forward-looking statements that involve various risks and uncertainty affecting the business of TAG Oil. All estimates and statements that describe the Company's objectives, goals, or future plans, including the drilling, completion and flow testing plans related to the Company's ten well program at Cheal and Sidewinder located in the Taranaki Basin of New Zealand, are forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, and changes in the regulatory and taxation environment. These forward-looking statements are based on certain factors and assumptions. Consequently, the Company's actual results may vary materially from the information provided in this release and 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.
Additional risk factors and uncertainties that could cause actual results to differ from those contained in the 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 Annual Information Form and its most recent reports in Canada under National Instrument 51-101.
SOURCE TAG Oil Ltd.