VANCOUVER, May 13 /PRNewswire-FirstCall/ - Oil and gas
producer TAG Oil Ltd. (TSX-V: TAO) is pleased to announce that the
Company has successfully completed its first fracture stimulation
at the Cheal oil and gas field since acquiring a 100% interest in
the Taranaki Basin new field oil and gas discovery in late
2009.
TAG completed a 17-ton artificial fracture stimulation into the
Mt. Messenger Formation on the Cheal A7 well. Initial flow testing
has increased daily production rates on the Cheal A7 well by
approximately 365% to 292 BOE per day. The well is expected to take
up to two weeks to fully clean-up and is currently being choked
back to minimize frac-sand flow back. Prior to the fracture
stimulation, the Cheal A7 well was producing 80 BOE per day. This
field's high-quality oil sells at a premium to West Texas
Intermediate, primarily to Australian, Korean and Japanese
refineries, and the A7 well has been tied into TAG's nearby Cheal
Production Station.
TAG Oil Chief Executive Officer Garth
Johnson commented, "These encouraging results are an example
of how TAG can deliver value by leveraging our North American
expertise and technology to under-developed New Zealand oil fields. The success of this
newly fractured Cheal A7 well provides a catalyst for future
development of the field. In addition to the increased cash flow,
these results should also increase overall recovery potential of
the field, as well as contribute to lower production and finding
costs."
TAG owns 100% of the Cheal Production Licence, which is only
lightly explored. In addition to the inherent potential within the
defined Cheal discovery area, including additional existing Cheal
production wells as fracture candidates, the Company has an
extensive inventory of follow-on prospects identified on 3D seismic
and drill-ready. TAG plans in the near future to begin a Taranaki
drilling campaign that will include horizontal drilling with
multi-stage fracturing, combined with downhole heating and advanced
recovery technologies as standard completion methodology.
"TAG is proud to be the first mover in New Zealand by taking advantage of proven
technologies that are commonplace in North America and applying them to our
developing Taranaki oil fields," Mr. Johnson noted. "TAG has built
a strong operational team that unites North American and
New Zealand expertise, and I would
like to commend all participants in these operations for a job well
done."
BOE Cautionary Statement
BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency
at the burner tip and does not represent a value equivalency at the
wellhead.
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.
Actual results may vary materially from the information provided in
this release. As a result, there is no representation by TAG Oil
that actual results realized in the future will be the same in
whole or in part as those presented herein. Actual results may
differ materially from the results predicted, and reported results
should not be considered as an indication of future performance.
Factors 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 most recent reports in
Canada under National Instrument
51-102.
TAG Oil Ltd.
TAG Oil Ltd. is a Canadian-based company with operations in
New Zealand. The Company holds an
extensive drill-ready prospect inventory in the Taranaki Basin,
including a 100% interest in the Cheal oil and gas discovery now
under development. TAG is positioned to build near-term production
through optimization of the existing producing wells, and through
further development and exploration of the Cheal Mining License and
nearby exploration acreage in close proximity to it in the Taranaki
discovery fairway.
In the East Coast Basin, the Company intends to exploit the
potential undiscovered resources that have been demonstrated in the
Waipawa Black Shale and Whangai Shale source-rock formations using
technologies that are commonplace in North America but not yet employed in
New Zealand. In addition, TAG is
appraising a shallow historical light oil discovery, as well as
testing high-impact conventional prospects across a 2.4
million-acre holding.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE TAG Oil Ltd.