VANCOUVER, Nov. 14, 2013 /PRNewswire/ - TAG Oil Ltd. (TSX:
TAO) and (OTCQX: TAOIF), reports that the Company has filed its
financial results with the Canadian Securities Administrators for
the Company's September 30, 2013
second quarter fiscal 2014 year. Copies of these documents can be
obtained electronically at http://www.sedar.com, or for additional
information please visit TAG Oil's website at
http://www.tagoil.com/.
TAG Oil Quarterly Highlights
- At September 30, 2013, the
Company had cash of $61.2 million,
working capital of $62.9 million and
no debt prior to closing a $25
million bought deal financing.
- Production revenue increased to $30.58
million for six months and $15.89
million for the quarter.
- Net income of $7.43 million was
generated for six months and $2.97
million for the quarter, before the deduction of non-cash
share-based compensation.
- Daily average production for six months increased to 2,227 boe
per day (51% oil) and 2,100 boe per day (58% oil) while realizing
$113.30 per barrel of oil and
$5.18 per mcf of gas for the
quarter.
- Continued step out drilling success in the Mt. Messenger/Urenui
formations with the Cheal-E1, E2 and E3 wells substantially
extending the known oil-saturated area of Cheal. Production testing
is underway on Cheal-E1 and with E-2 and E3 ready to test. Cheal-E4
is currently drilling ahead at approximately 750m with a projected
total depth of 2234m.
- Cardiff-3 deep well has
encountered strong mudlog shows of up to 85% total gas readings in
the top sections of the Kapuni Formation. Currently drilling ahead
at approximately 4,300 meters with the thickest target, the K3E
zone expected at approximately 4700m.
- Unconventional specialists from North
America join TAG to initiate a widespread East Coast Basin
drilling campaign, and to establish New
Zealand's first unconventional oil and gas production
directly from the source rock.
Financial and Production
|
Q2 2014 |
Q2 2013 |
Production revenue |
$ |
15,884,584 |
$ |
9,616,276 |
Net income prior to share-based compensation |
|
2,970,435 |
|
1,801,250 |
Net income (loss) |
|
2,411,802 |
|
(301,296) |
Earnings per share |
|
0.04 |
|
(0.01) |
Working capital |
|
62,850,783 |
|
84,534,157 |
Total assets |
|
224,932,521 |
|
200,621,090 |
Long term debt |
|
- |
|
- |
Shareholder's equity |
$ |
198,301,759 |
$ |
184,020,105 |
TAG currently has 64,870,252 common shares outstanding and
68,578,586 common shares outstanding on a fully diluted basis.
Oil and Natural Gas Production, Pricing and
Revenue
|
2014 |
2013 |
Six months ended |
|
|
|
|
|
|
|
Q2 |
Q1 |
Q2 |
2014 |
2013 |
Daily production
volumes(1) |
|
|
|
|
|
|
Oil (bbls/d) |
1,209 |
1,075 |
738 |
1,143 |
930 |
|
Natural gas (BOE/d) |
891 |
1,279 |
1,110 |
1,084 |
854 |
|
Combined (BOE/d) |
2,100 |
2,354 |
1,848 |
2,227 |
1,784 |
|
|
|
|
|
|
Daily sales volumes(1) |
|
|
|
|
|
|
Oil (bbls/d) |
1,227 |
1,058 |
741 |
1,142 |
929 |
|
Natural gas (BOE/d) |
782 |
1,115 |
876 |
948 |
616 |
|
Combined (BOE/d) |
2,009 |
2,173 |
1,617 |
2,090 |
1,545 |
|
|
|
|
|
|
|
Natural Gas (Mmcf/d) |
4,694 |
6,690 |
5,259 |
5,687 |
3,697 |
|
|
|
|
|
|
Product pricing |
|
|
|
|
|
|
|
|
|
|
|
|
Oil ($/bbl) |
113.30 |
104.87 |
109.97 |
109.42 |
108.41 |
|
Natural gas ($/Mcf) |
5.18 |
5.72 |
4.38 |
5.50 |
4.44 |
Sales |
|
|
|
|
|
Total revenue - gross |
$15,884,584 |
$14,698,198 |
$9,616,276 |
$30,582,782 |
$21,442,201 |
Less other revenue - gross |
(861,603) |
(1,120,919) |
- |
(1,982,522) |
- |
Oil and natural gas
revenue - gross |
15,022,981 |
13,577,279 |
9,616,276 |
28,600,260 |
21,442,201 |
Oil and natural gas
royalties(2) |
(1,632,648) |
(1,473,864) |
(1,077,031) |
(3,106,512) |
(2,406,572) |
Oil and natural gas Revenue - net |
$13,390,333 |
$12,103,415 |
$8,539,245 |
$25,493,748 |
$19,035,629 |
(1) |
Natural gas production converted at 6 Mcf:1BOE (for BOE
figures) |
(2) |
Includes a 7.5% royalty related to the acquisition of a
69.5% interest in the Cheal field |
(3) |
Other revenue is electricity revenue related to
OHL. |
Drilling Campaign Targeting Large Conventional &
Unconventional Reserves
TAG is executing the most diverse and extensive exploration
endeavour and drilling campaign in the Company's history. TAG
currently has two drilling rigs operating with a third rig planned
to be operating on the East Coast in the near future. The Company's
extensive acreage position, which has been high-graded over many
years in the Taranaki, East Coast and Canterbury basins, with development wells,
step out wells and exploration wells on-going that provides for
risk-managed exploration, and continued exposure to world-class
upside potential and opportunity for continued significant organic
value creation for many years to come.
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.
Six month drilling plan includes:
- a minimum of nine conventional step out wells targeting the
Urenui and Mt. Messenger Formation, across three new onshore
Taranaki Basin permits near to TAG's main Cheal discovery.
- a minimum of two 100%-owned (Cardiff-3 and Heatseeker-1) high-impact deep
Kapuni Formation gas-condensate wells in the onshore Taranaki
Basin;
- at least one unconventional well in TAG's Waitangi Hill acreage
in the East Coast Basin prior to an anticipated widespread
unconventional drilling campaign.
Taranaki Basin Drilling Update
Urenui/Mt. Messenger Formation Wells (Shallow ~2000m)
TAG has drilled, completed and is currently testing the first three
conventional step-out wells (Cheal-E1 to E3) and has spudded the
Cheal-E4 well (TAG 70%). The results from these wells are
particularly important as they have substantially extended Cheal's
known oil saturated area. TAG has also expanded its extensive
Taranaki production infrastructure into the Cheal-E site, so that
all of these wells can be immediately placed into permanent
production.
To ensure more reliable production forecasting on future wells
in this emerging Urenui/Mt. Messenger play, the Cheal-E site wells
will be initially tested individually, with each well flowing for
approximately 15 days, and then shut in temporarily to conduct
pressure and temperature analysis. During this shut-in period, the
next well will be placed on a 15-day production test until all new
wells at the site have been individually tested and proper build-up
analysis completed.
To date the Company has tested the Cheal-E1 well for 5 days with
an average production rate of 600/BOE's per day (94% oil) with a
naturally flowing tubing head pressure of approximately 600 psi.
The well has been restricted with a 1/4" choke until further oil
storage facilities are added to the site, following greater than
anticipated initial flush production rates.
Kapuni Formation Wells (Deep ~5000m)
The Cardiff-3 well, targeting the
deep Eocene-aged Kapuni Formation, is drilling ahead at
approximately 4,300 meters after encountering numerous
hydrocarbon-bearing zones within the McKee and K1A Sands.
Significantly elevated gas peaks have been recorded above
background gas levels throughout the Kapuni section drilled to
date.
The Company expects to drill through the remainder of the Kapuni
Formation target zones —including the K3E Sands, the main objective
in the Cardiff-3 well — in
November and, at that time, will make a decision whether to
complete and production test the well. If supported by interpreted
data, initial un-stimulated testing of Cardiff-3 will commence in December for a
minimum 30-day flow period. The well will then be shut in for a
pressure / temperature build-up, at which time a further fracture
stimulation of the well will be planned and executed, likely in Q1
of 2014.
Initial Undiscovered Resource Potential Estimated in Taranaki
Drilling Program
Permit # |
TAG
Interest |
Resources Category |
Low Estimate
(p90)(1) |
Best Estimate
(p50)(2) |
High Estimate
(p10)(3)
|
38156
Cardiff |
100% |
Undiscovered Gas
Initially-in-Place |
67.89 Bcf |
159.88 Bcf |
381.57 Bcf |
38156
Cardiff |
100% |
Undiscovered Condensate
Initially-in-place |
2.04 mmbls |
5.49 mmbls |
15.15 mmbls |
54873
Heatseeker |
100% |
Undiscovered Gas
Initially-in-Place |
83.1 Bcf |
197.3 Bcf |
468.58 Bcf |
54873
Heatseeker |
100% |
Undiscovered Condensate
Initially-in-place |
2.50 mmbls |
7.9 mmbls |
18.75 mmbls |
38748
Hellfire |
100% |
Undiscovered Gas
Initially-in-Place |
52.9 Bcf |
119.5 Bcf |
269.72 Bcf |
38748
Hellfire |
100% |
Undiscovered Condensate
Initially-in-place |
1.59 mmbls |
4.78 mmbls |
10.79mmbls |
54877
Cheal North
East |
70% |
Prospective Resources |
5.06 mmbls |
11.31 mmbls |
25.41 mmbls |
54876
Cheal Southern
Cross |
50% |
Prospective Resources |
1.035 mmbls |
2.205 mmbls |
4.60 mmbls |
(1) Low Estimate is considered to be a conservative estimate of
the quantity of the in-place volumes. It is likely that the actual
in-place volumes will exceed the low estimate. If probabilistic
methods are used, there should be at least a 90 percent probability
(P90) that the in-place volumes will equal or exceed the low
estimate. |
|
(2) Best Estimate is considered to be the best estimate of the
in-place volumes that will actually be present. It is equally
likely that the actual in-place volumes will be greater or less
than the best estimate. If probabilistic methods are used, there
should be at least a 50 percent probability (P50) that the in-place
volumes will equal or exceed the best estimate. |
|
(3) High Estimate is considered to be an optimistic estimate of
the in-place volumes. It is unlikely that the actual in-place
volumes will exceed the high estimate. If probabilistic methods are
used, there should be at least a 10 percent probability (P10) that
the actual in-place volumes will equal or exceed the high
estimate. |
Conference Call Information
TAG Oil will host a discussion of its Q2 2014 financial results
and forward program on Thursday November 14,
2013 at 1:00 pm Pacific Time.
Please call in ten minutes before the conference call starts and
stay on the line (an operator will be available to assist you
should you have questions of management during the call). In
addition, questions can be forwarded by e-mail in advance to
info@tagoil.com.
Interested parties may access the conference
call using the information below: |
Date |
November 14, 2013 |
Time |
1:00 pm Pacific Time |
Toll-Free Dial-in # |
1-866-318-8619 |
Secondary Dial-in # |
1-617-399-5138 |
|
|
Conference Passcode |
81930031 |
|
|
E-mail questions to: |
info@tagoil.com |
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 significant
organic value creation through exploration success and ongoing
development and appraisal drilling of several light oil and gas
discoveries. As New Zealand's
leading explorer, TAG actively drills high-impact conventional and
unconventional exploration prospects identified in the Taranaki
Basin, East Coast Basin and Canterbury
Basin that covers more than 2,669,780 net acres of land,
prospective for major discovery 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 Sproule and TAG professionals are qualified reserves
evaluators in accordance with NI 51-101 and the Canadian Oil and
Gas Evaluations Handbook.
TAG Oil has adopted the standard of six thousand cubic feet of
gas to equal one barrel of oil when converting natural gas to
"BOEs." BOEs may be misleading, particularly if used in isolation.
A BOE conversion ratio of 6Mcf: 1 Bbl is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.
Undiscovered Petroleum Initially-In-Place (equivalent to
undiscovered resources) is that quantity of petroleum that is
estimated, on a given date, to be contained in accumulations yet to
be discovered. The recoverable portion of undiscovered petroleum
initially in place is referred to as "prospective resources," the
remainder as "unrecoverable."
Prospective resources are 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. There is no
certainty that any portion of the resources will be
discovered. If discovered, there is no certainty that it will
be commercially viable to produce any portion of the resources.
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 and East Coast Basins 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.