VANCOUVER, April 22, 2013 /PRNewswire/ - TAG Oil Ltd. (TSX: TAO) and (OTCQX: TAOIF), is pleased to announce that drilling of the Ngapaeruru-1 exploration well is now underway in TAG's 100% controlled Petroleum Exploration Permit 38349, located in the East Coast Basin of New Zealand. The Ngapaeruru-1 exploration well, spudded at 4:30am on April 22 nd, 2013 is targeting the Waipawa Black Shale and Whangai source rock formations at an anticipated depth of 1,800 meters, and will test the unconventional discovery potential in this portion of the Basin.
The Waipawa Black Shale and Whangai formations are high-quality source rock formations present throughout most of TAG's million-acre East Coast Basin land holdings. These oil-and gas-rich source rocks are comparable in total organic carbon content and oil and gas maturity levels to successful tight oil and gas plays such as North Dakota's Bakken shale in the prolific Williston Basin.
Garth Johnson, TAG Oil's CEO commented, "Our strategy has always been to build reserves, production infrastructure, and cash flow from our lower risk conventional assets, leveraging these successes to intelligently pursue high-impact opportunities such as the East Coast Basin. With TAG's continued success in the Taranaki Basin - and our successful commercialization of these discoveries - we continue to deliver on the first part of this plan. Drilling Ngapaeruru-1 is another step in delivering on our business plan: pursuing these higher risk, higher impact exploration wells from a very strong financial position."
Live oil recovered from shallow wells drilled by TAG in 2011, as well as oil sampled from seeps in the East Coast Basin, confirm that the source of the high-quality oil was generated from the Waipawa Black Shale and Whangai formations. Extensive geotechnical work on TAG's East Coast acreage, including proprietary 2D and 3D seismic, have confirmed that the source rock parameters in TAG's East Coast Basin play compare favorably to commercial unconventional plays throughout the world.