VANCOUVER, Dec. 11, 2012 /PRNewswire/ - TAG Oil Ltd. (TSX: TAO and OTCQX: TAOIF), announces that New Zealand Petroleum and Minerals has awarded TAG Oil Ltd. four onshore exploration blocks offered in New Zealand's 2012 Block Offer. The permits awarded have been assigned the Petroleum Exploration Permit (PEP) numbers 54873, 54876, 54877, 54879 and are all located in the Taranaki Basin, New Zealand.
Key attributes to these awards are:
- 37,253 additional gross acres in the main Taranaki oil and gas discovery fairway;
- Extensive TAG controlled proprietary 3D seismic coverage over three of the four new permits;
- PEP's 54876, 54877, and 54879 initially add at least 10 shallow, low-risk drilling prospects plus numerous leads identified on 3D seismic in close proximity to the producing Cheal oil field;
- Joint venture created with East West Petroleum Ltd.; TAG will operate the permits and East West will fund four wells within PEP 54876, 54877 and 54879 in 2013 earning East West a 50% interest in PEP 54876 and PEP 54879 and a 30% interest in PEP 54877.
- PEP 54873 (100% TAG) provides several shallow drilling leads along with significant exploration upside via a drill-ready deep gas and condensate prospect that has similar geological features to the adjacent 1.3 TCF Kapuni gas/condensate field;
- Economically robust commercial potential: any new discoveries arising from drilling in these new blocks will be cost-effectively tied into to TAG's expanded Cheal Production Station without delay.
TAG CEO Garth Johnson commented, "We are very pleased that New Zealand Petroleum & Minerals has awarded TAG this additional acreage that is complimentary to our current Taranaki operations. Our new oil and gas production facility expansion and associated pipelines in this area unencumber all production, transportation and marketing of TAG's oil and gas, including any new discoveries from these newly awarded lands. We are also pleased to have established a joint venture with East West Petroleum according to a joint-bidding agreement entered into by our companies prior to making application in the 2012 Block Offer."
TAG's Infrastructure Expansion On Track TAG's $30 million infrastructure expansion investment continues to proceed on schedule to meet the March 31, 2013 anticipated completion date. At that time, the Company expects all current shut in discovery wells can be tied into TAG's 100% controlled facility, and daily production will exceed 5,000 barrels of oil equivalent per day as forecasted.TAG has amended its production timeline for the next two fiscal quarters after making a decision to conserve natural gas and minimize flaring during the Cheal infrastructure upgrade. In this regard, TAG will maintain its production at approximately 2,000 BOE per day until the infrastructure expansion is complete.