Electric log analysis of these wells indicates high-quality oil pay in the targeted Mt. Messenger and Urenui Formations. A pumping unit is currently being mobilized to the field for extended well testing. The Company is also pleased to announce the spudding of the Cheal-B5 appraisal / development well, which will target the same reservoir horizons.
Cheal C2 Cheal-C2, the first well in TAG's current ten-well Taranaki drilling program, targeted the Mt. Messenger Formation and was drilled to a depth of ~2,130 meters from the Cheal C drilling pad. This well encountered "free oil" and the highest mudlog gas peak ever recorded at Cheal from multiple sandstone intervals. Cheal-C2 was a "step-out" from the Cheal-C1 oil discovery announced on June 6, 2011. For more information on Cheal-C1 discovery please see our June 6, 2011 Press Release.
In addition, TAG has recently completed drilling of the Cheal-A8 well, the second well in the ten-well drilling campaign, which targeted the Urenui Formation from the Cheal A drilling pad. The well was drilled and cased to a depth of ~1,585 meters with "free oil" encountered from multiple sand stone intervals.
Garth Johnson, TAG Oil CEO, commented,"We are very pleased at the results to date in our current Taranaki drilling program with both wells exhibiting what appears to be excellent oil pay in several intervals. We are also undergoing a field optimization project including water flooding and workover / recompletion of existing older wells to enhance the field productivity."
The Cheal oil and gas field, 100%-controlled by TAG Oil, is located in Petroleum Mining Permit 38156 in the onshore Taranaki Basin, New Zealand.
About TAG Oil Ltd
TAG Oil Ltd. (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 2,600 sections of land in the onshore Taranaki and East Coast Basins of New Zealand's North Island.
In the East Coast Basin, TAG has partnered with Apache Corporation to pursue the significant unconventional resource potential estimated in the fractured shale source-rock formations. These oil-rich and naturally fractured formations have many similarities to North America's Bakken Shale source-rock formation in the successful Williston Basin.
"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.
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. All estimates and statements that describe Cheal waterflood and Cheal-C1, Cheal-C2 and Cheal-A8 as well as the Company's objectives, goals, or future plans, including the drilling, completion and flow testing plans related to the Company's ten well program at Cheal and Sidewinder located in the Taranaki Basin of New Zealand, are forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, and changes in the regulatory and taxation environment. These forward-looking statements are based on certain factors and assumptions. Consequently, the Company's 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.
Additional risk factors and uncertainties 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 Annual Information Form and its most recent reports in Canada under National Instrument 51-101.