VANCOUVER, March 5, 2012 /PRNewswire/ - TAG Oil Ltd. (TSX: TAO and OTCQX: TAOIF), is pleased to report that TAG's Cheal-B7 discovery well has been flow tested and is naturally flowing at an average rate of more than 1,100 barrels of light oil per day plus associated gas. The Cheal-B7 well is located within TAG's 100%-owned Cheal oil and gas field, located in Petroleum Mining Permit 38156 in the Taranaki Basin of New Zealand.
The Cheal-B7 well was drilled to a total depth of approximately 2,100 meters and encountered a total of 18 meters of high-quality oil-and-gas bearing sands within the targeted Urenui and Mt. Messenger Formations, located to the northeast and up-dip of TAG's recent Cheal-B5 oil well discovery.
With the Cheal-B7 well, TAG is currently producing more than 4,000 BOE's per day with light oil contributing approximately 70% to that daily production figure. In addition, TAG has another 3,500 BOE's per day of production, which is drilled and sitting behind pipe awaiting the expansion of the Company's infrastructure, which will allow this "behind pipe" production to be brought onstream.
These production figures do not include any production arising from the successful drilling of the Cheal-B6, Cheal-A9 and Cheal-A10 wells, which are currently being production tested. The Cheal-B6 well encountered 14 meters of oil-and-gas bearing sands within the Urenui and Mt. Messenger Formations while the Cheal-A9 and Cheal-A10 wells encountered 10.5 meters of net pay and 13 meters of net pay respectively within the targeted Urenui Formation.TAG CEO Garth Johnson commented, "TAG's Taranaki drilling continues to achieve very significant results, which now stands at 14 consecutive successful wells. The Cheal-B6, A9 and A10 wells will be tested over the next few weeks, and with another 10-wells planned in Taranaki this year, along with workovers to certain existing wells, we will continue to build our reserve base and oil and gas production. In order to facilitate the anticipated new oil and gas production, further expansion to the Cheal Production Facility, is now underway, which will ensure that all current and future Cheal wells can be produced concurrently." 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 more than 1,300 sections of land in the onshore Taranaki and East Coast Basins of New Zealand's North Island. In the East Coast Basin, TAG has entered into a farm-out agreement with Apache Corp to explore and potentially develop the major unconventional resource potential estimated in the tight oil source-rock formations that are widespread over the Company's acreage. These oil-rich and naturally fractured formations have many similarities to North America's Bakken source-rock formation in the successful Williston Basin. Important Information: "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.
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