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TAG Oil picks up failed Kea's Puka prospect for $250,000

Tuesday 7th June 2016

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Canadian-listed Taranaki oil and gas producer TAG Oil has picked up a 70 percent interest in the Puka onshore oil and gas exploration permit for $250,000 following the liquidation of the previous owner, Kea Petroleum.

The 85 square kilometre area covered by Petroleum Exploration Licence 51153, known as Puka, is located east of TAG's Cheal field, where it is producing oil and gas. Three exploration wells have been drilled in the prospect since the Puka field was discovered in 2012.

The Puka-1 and Puka-2 wells produced 100 barrels of oil equivalent per day from the Mt Messenger formation before being shut in due to low oil prices and mechanical issues, TAG said in a statement to the Toronto Stock Exchange.

Also in the Puka licence area is the Shannon prospect, a deeper Tikorangi Limestone target below the Puka oil pool. The Tikorangi formation "has been well proven at the adjacent Waihapa oil field", TAG said. 

TAG has forged a new partnership in the prospect, with MEO Australia taking the remaining 30 percent in the prospect, with a commitment to drill one well by the fourth quarter of 2018.

“We are very pleased to have completed the opportunistic acquisition of the Puka permit at such competitive terms out of liquidation," said chief executive Toby Pierce.

TAG's share price peaked at C$10.50 in September 2012, before the global oil price slump, and traded most recently 86 Canadian cents.

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