VANCOUVER, Oct. 7, 2013 /PRNewswire/ - TAG Oil Ltd. (TSX:
TAO) and (OTCQX:
TAOIF), reports that the Taranaki Regional Council has granted
the
Company consent to perform a fracture stimulation on the
Cardiff-3 well
located in Petroleum Mining License 38156, should drilling results
call
for it.
Cardiff-3 was spudded on
September 2, 2013 and is presently
drilling
ahead, on-time and on-budget at a depth of 3,918 meters. It will
take
approximately 14 more days to reach its total projected depth of
4,900
meters, at which time, a decision will be made whether to complete
the
well. Economic factors for completion, which would likely include
a
hydraulic-fracture stimulation, will consider total meters of net
gas
pay, indicative in situ permeability, and the interpreted volume
of
original gas in place that could be accessed with this well
bore.
It is anticipated that in the event of a success at Cardiff-3, three
wells would be needed to fully develop prospective resources
estimated
at 160 BCF and 5.49 million barrels of condensate on a P50
basis.
Cardiff-3 is the first of three
back-to-back deep wells being drilled
100% by TAG Oil, all targeting Taranaki's successful deep
Kapuni
Formation. TAG's "mid case" (P50) prospective resources of the
three
deep Kapuni prospects total 476 BCF of natural gas and 18
million
barrels of condensate.
Careful study has shown the formations being targeted for
potential
hydraulic fracturing at Cardiff-3
to be completely sealed by over 4 km
of impermeable rock. If hydraulic fracturing is required, new
generation plant-based fracking fluid will be used and all fluids
and
water will be contained in a closed system.
Cardiff Background
The Cardiff structure is a large
anticlinal trap, some 12 km long by 3
km wide, and is a prospective target across the span of the
structure.
Gas and condensates were discovered in the Cardiff-1 (Shell-1991) and
Cardiff-2A (Austral-Pacific 2002)
wells: Cardiff-2 encountered
12
meters of net pay within the uppermost McKee Formation of the
Kapuni
Group sands, and flowed over 3 million cubic feet and 100 barrels
of
condensate per day (without fracture stimulation) on short-term
testing. More significant prospective resources exist in the deeper
K1A
and K3E zones - the primary targets in the Cardiff-3 well - where
strong gas shows were encountered over a gross 600 meter interval
in
the Cardiff-2A well. These went
untested due to mechanical problems the
operator experienced while drilling the well, but these lower
Kapuni
Group formations are the primary producing intervals in the nearby
1.4
TCF and 65 million barrels of condensate Kapuni Field.
Access to market for Cardiff gas
is relatively straightforward, with the
surface location of Cardiff-3
being situated directly adjacent to
TAG-owned production infrastructure. This tie-in provides a link to
the
strong North Island gas market, providing a number of
commercial
opportunities, including clean power generation.
For further information regarding TAG Oil's deep drilling program
please
visit:
http://www.tagoil.com/20130917-TAG-Oil-Deep-Drilling-Targets-Large-Onshore-Gas-Condensate-Resource-Taranaki.asp.
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% ownership over all its
core assets, including extensive oil and gas production
infrastructure,
TAG is enjoying substantial oil and gas production and reserve
growth
through development of several light oil and gas discoveries. TAG
is
also actively drilling high-impact conventional and
unconventional
exploration prospects identified across more than 2,669,780 net
acres
of land in New Zealand.
The resource estimates in this news release were prepared with
an
effective date of July 31, 2013. The
estimates for Cardiff have
been
externally prepared by Sproule International Limited and the
remaining
estimates were prepared internally by TAG professionals, both of
which
are qualified reserves evaluators in accordance with NI 51-101 and
the
Canadian Oil and Gas Evaluations Handbook.
Prospective resources are defined as those quantities of
petroleum
estimated, as of a given date, to be potentially recoverable
from
undiscovered accumulations by application of future development
projects. Prospective resources have both an associated
chance of
discovery and a chance of development.
Exploration for hydrocarbons is a speculative venture
necessarily
involving substantial risk. TAG's future success in exploiting
and
increasing its current reserve base will depend on its ability
to
develop its current properties and on its ability to discover
and
acquire properties or prospects that are capable of commercial
production. However, there is no assurance that TAG's future
exploration and development efforts will result in the discovery
or
development of additional commercial accumulations of oil and
natural
gas. In addition, even if further hydrocarbons are discovered,
the
costs of extracting and delivering the hydrocarbons to market
and
variations in the market price may render uneconomic any
discovered
deposit. Geological conditions are variable and
unpredictable. Even if
production is commenced from a well, the quantity of
hydrocarbons
produced inevitably will decline over time, and production may
be
adversely affected or may have to be terminated altogether if
TAG
encounters unforeseen geological conditions. TAG is subject to
uncertainties related to the proximity of any reserves that it
may
discover to pipelines and processing facilities. It expects that
its
operational costs will increase proportionally to the remoteness
of,
and any restrictions on access to, the properties on which any
such
reserves may be found. Adverse climatic conditions at such
properties
may also hinder TAG's ability to carry on exploration or
production
activities continuously throughout any given year.
The significant positive factors that are relevant to the
resource
estimate are:
Proven production in close proximity;
Proven commercial quality reservoirs in close proximity;
and
Oil and gas shows while drilling wells nearby.
The significant negative factors that are relevant to the
resource
estimate are:
Tectonically complex geology could compromise seal potential;
and
Seismic attribute mapping in the two, deep, liquids'-rich gas plays
can
be indicative but not certain in identifying proven
resource.
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. Such statements can
be
generally, but not always, identified by words such as
"expects",
"plans", "anticipates", "intends", "estimates", "forecasts",
"schedules", "prepares", "potential" and similar expressions, or
that
events or conditions "will", "would", "may", "could" or "should"
occur.
All estimates and statements that describe the Company's
objectives,
goals, production rates, optimization, infrastructure capacity and
or
future plans with respect to the drilling in the Taranaki Basin
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 and production, geological risks, marketing and
transportation, the risk associated with estimating
undiscovered
original initially-in-place described above, availability of
adequate
funding, volatility of commodity prices, imprecision of reserve
estimates, environmental risks, competition from other producers,
and
changes in the regulatory and taxation environment. Actual results
may
vary materially from the information provided in this release,
and
there is no representation by TAG Oil that the actual results
realized
in the future will be the same in whole or in part as those
presented
herein.
Other factors that could cause actual results to differ from
those
contained in the forward-looking statements are also set forth
in
filings that TAG and its independent evaluator have made,
including
TAG's most recently filed reports in Canada under NI 51-101, which can
be found under TAG's SEDAR profile at www.sedar.com.
TAG undertakes no obligation, except as otherwise required by law,
to
update these forward-looking statements in the event that
management's
beliefs, estimates or opinions, or other factors change.
SOURCE TAG Oil Ltd.