VANCOUVER, May 31, 2011 /PRNewswire/ - TAG Oil Ltd.
(TSXV: TAO) and (OTCQX: TAOIF) is
pleased to announce that completion and flow testing operations on
the Cheal-B4ST discovery well located in PML 38156, Taranaki Basin,
New Zealand, have been completed,
and the well has now been placed on permanent production into TAG's
100%-owned Cheal Production Facility.
The Cheal-B4ST vertical exploration well was drilled to a total
depth of 1821m (5973 feet), encountering net pay in both the Urenui
and Mt. Messenger Formations. Flow rates averaged 400 barrels of
oil equivalent (BOE) per day (360 barrels of oil + 240 thousand
cubic feet gas) after the first week of production.
The Cheal-B4ST well encountered 17 meters (56 feet) of net pay
within the Urenui (~1400m) and Mt. Messenger (~1700m) zones. These
Miocene-aged zones were isolated and tested separately, confirming
oil and gas flow rates from both zones. The final completion
co-mingles the two zones.
TAG Oil CEO Garth Johnson
commented, "The Cheal-B4ST well represents a significant milestone
for the Cheal oil and gas field and opens the door for substantial
reserve growth. Prior to this year, all our Cheal reserves were
assigned solely to the Mt. Messenger Formation, but with
Cheal-B4ST, we now have three wells producing oil from the Urenui
Formation as well. Given these excellent results, further
development of the widespread Urenui Formation will be a top
priority."
TAG also reports that the Company is expanding the capabilities
of the artificial lift systems at the Cheal Production Facility to
accommodate the new wells drilled in the last nine months. At
present, the Plant is producing approximately 1000 barrels of oil
equivalent per day with approximately 350 barrels of oil equivalent
per day that is shutin, awaiting completion of the expansion. The
expansion work is scheduled to be complete by September 2011 at a nominal cost.
The Cheal oil and gas field is located in Petroleum Mining
Permit 38156 in the Taranaki Basin New Zealand. For further
information on the Cheal Oil and gas field please visit
http://www.tagoil.com/operations.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% 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 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 oil-rich, 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 and development of TAG Oil's Cheal oil and gas
field and specifically the Cheal-B4ST light oil and gas discovery
in the Taranaki Basin of New
Zealand. 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 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.