Onshore Taranaki oil discovery for Tag

Thursday 30th September 2010

Tag Oil, a listed Canadian exploration company, has found commercial quantities of oil exceeding expectations in its 100%-owned onshore Broadside exploration permit, PEP 38748, in the Mt Messenger region north of New Plymouth.

The discovery, by Tag’s Sidewinder-1 exploration well, drilled to a total depth of 1,601m, and encountered 14 metres of netoil-bearing sandstones in the Mt. Messenger Formation, the same producing formation as the offsetting Ngatoro and Kaimiro oil and gas fields.

“Electric logs indicate excellent reservoir qualities, with average porosities of 22.5% and oil saturations of 60%,” TAG said in a statement to the Toronto Stock Exchange.

No indications were given of the possible size of the resource, but Tag says it will complete well for production.

“We'll commence flow testing immediately after completing the fracture stimulation of the Cheal B-3 well, located in our 100%-owned Cheal mining permit,” the company said.

"We are extremely pleased to achieve oil pay in excess of what we had anticipated. These results also increase the likelihood of additional discoveries and the prospectivity of the Broadside permit.”

The drill rig will now move to the Cheal permit to initiate drilling of the Cheal-BH-1 horizontal well. With a total measured depth of 2,325 metres, including a 600 metre horizontal section, will be drilled into the proven producing area of the Cheal A block, and will target turbidite fan deposits identified in the Mt. Messenger Formation. Cheal-BH-1 will be completed with a multi-stage fracture treatment along the horizontal section.

Businesswire.co.nz

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