VANCOUVER, May 18 /PRNewswire/ - TAG Oil Ltd. (TSX-V:
TAO) and (OTCQX: TAOIF) reports that an independent
assessment of reserves has been completed as of March 31, 2011 on TAG Oil's 100%-owned Cheal
Mining Permit (PMP 38156) and Sidewinder Exploration Permit (PEP
38748), located in the Taranaki Basin, New Zealand. Sproule International Limited,
one of Canada's largest petroleum
engineering consulting companies prepared the report in accordance
with definitions, standards and procedures contained in the
Canadian Oil and Gas Evaluation Handbook (COGE Handbook) and
National Instrument 51-101, Standards of Disclosure for Oil and Gas
Activities.
The reserves reported for the 2011 fiscal year relate primarily
to the Cheal oil and gas field due to fiscal year-end 2011 cut-offs
required under NI-51-101. Due to the timing of operations occurring
after March 31, 2011, the Sidewinder
reserve assessment was completed with information related only to
the Sidewinder-1 well and does not include the now-completed
Sidewinder-2, Sidewinder-3 and Sidewinder-4 wells.
The assessment of reserves has assigned net proved and probable
reserves ("2P") remaining of 1,360,000 barrels of oil (2010 =
651,000 bbls) and 1,864 million cubic feet ("mmcf") of associated
gas (2010 = 258 mmcf). This reserves report, on a 2P basis, amounts
to 1,677,000 barrels of oil equivalent ("BOE") assessed within a
reserves area covering just 475 acres of the 7,487-acre Cheal
permit and just 107 acres of the 7,910-acre Sidewinder permit.
After considering production during the 2011 fiscal year, the
1,677,000 BOE in proved and probable reserves represents a 221%
increase over the March 31, 2010
year-end independent reserve assessment. The key factors for the
increase in reserves for fiscal 2011 are as follows:
- One new well drilled and completed
- Establishment of commercial production from a bypassed
discovery
- Increased recovery factors
- Upward revision to projected future well performance
During the 2011 fiscal year, TAG focused primarily on optimizing
the production from the producing Cheal wells. This resulted in an
increase in the recovery factors being assigned to the Mt.
Messenger Formation. In addition, TAG was successful in
establishing the first-ever commercial production from the bypassed
Urenui Formation oil discovery, using two historical wells drilled
at Cheal by the previous operator. Having successfully completed
these operations, Cheal now produces from both the Urenui and Mt.
Messenger Formations at approximate depths of 1400m (~4600 feet)
and 1800m (~5900 feet), respectively.
TAG Oil's Chief Executive Officer, Garth
Johnson, commented, "We are very pleased to follow fiscal
2010's reserve increase with another large increase in fiscal 2011,
even after having produced ~160,000 barrels of oil during the year.
This report has established initial reserves within the Sidewinder
discovery area, where the majority of our operations occurred after
year-end and could not be considered for fiscal 2011 reserves. The
commercialization of the Urenui oil discovery has also allowed us
to book initial reserves and is another low-risk opportunity to
build reserves in Taranaki from this widespread formation
identified at Cheal."
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 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 2,712 sections of land in
the onshore Taranaki and East Coast Basins of New Zealand's North Island.
In the East Coast Basin, TAG Oil is pursuing the significant
unconventional resource potential estimated in the fractured shale
source-rock formations that are widespread over the Company's
acreage. These naturally fractured and thermally mature source-rock
formations have many similarities to North America's Bakken
Shale source-rock formation in the successful Williston
Basin.
"BOE"s 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.
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. These statements are
based on certain factors and assumptions including those related to
the exploration, development and reserves of TAG Oil's Cheal and
Sidewinder oil and gas fields and the Company's drilling plans
going forward in the Taranaki Basin of New Zealand. 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.
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
51-101.
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.