VANCOUVER, May 5, 2014 /PRNewswire/ - TAG Oil Ltd. (TSX:
TAO) and (OTCQX: TAOIF) announces that the Gisborne District
Council has granted TAG consent to drill the Waitangi Valley-1 well
(TAG 100%), located in Petroleum Exploration Permit 38348 in the
East Coast Basin, New Zealand.
Earthwork activities are already underway to build an access road
and drilling pad, with construction expected to be fully complete
and drilling rig mobilized to the site by the end of June. Waitangi
Valley-1 will be drilled to a total depth of 3600 meters, with the
well targeting the naturally fractured Waipawa Black Shale and
Whangai source rock formations.
The Waipawa and Whangai formations are regarded as high-quality
source rocks that compare technically to successful commercial
tight-oil plays in North America,
such as the Bakken Shale and Eagle Ford discoveries. The potential
oil resource in the source rocks on TAG's acreage is significant by
world standards, with independent assessments on TAG-controlled
lands estimated at an undiscovered resource potential of
approximately 14 billion barrels of oil initially-in-place. The
mid-range P50 assessment considers approximately 20% of TAG's total
land holdings, while the source rocks are interpreted to be
widespread and, more importantly, accessible on a much greater area
of the Company's 1.5 million acres. The Waitangi Valley-1 well also
has significant conventional discovery potential within multiple
Miocene-aged formations in an area where oil has already been
discovered under significant pressure.
Waitangi Valley-1 will be the first modern deep exploration well
drilled in the Waitangi Hill area: The historical Waitangi-1 oil
discovery in 1912 produced 50 degree API sweet light crude from an
oil reservoir at approximately 300 meters depth[1]. Geotechnical
work done on oil samples taken from the Waitangi-1 well, which
still produces live oil to surface today, and nearby oil seeps and
oil samples from the five shallow Waitangi Hill wells TAG drilled
in 2011, conclusively confirmed the "oil kitchen" is working and
the underlying Waipawa and Whangai Formations are the source of
this high-quality, movable oil making these naturally fractured oil
and gas source rocks a prime unconventional exploration target.
"We are extremely pleased to receive this consent and we thank
the Gisborne District Council for their diligence leading to this
decision," said Garth Johnson, TAG
Oil Ltd. Chief Executive Officer. "The Waitangi Valley well is one
of TAG's high priority exploration prospects which was technically
validated through work in our previous joint venture with Apache,
and therefore we are very excited to drill this well. It is our
vision to establish the country's first unconventional oil
production and prove commerciality of this potentially very large
resource."
1Such information is derived from a variety of
publicly available information from government sources, regulatory
agencies, public databases or other industry participants (as at
the date stated therein) that TAG believes are predominantly
independent in nature.
TAG Oil Ltd.
TAG Oil Ltd. (http://www.tagoil.com/) is a Canadian-based
production and exploration company with operations focused
exclusively in New Zealand. With
100% ownership over all its core assets, including extensive oil
and gas production infrastructure, TAG is enjoying significant
organic value creation through exploration success and ongoing
development and appraisal drilling of several light oil and gas
discoveries. As New Zealand's
leading explorer, TAG actively drills high-impact conventional and
unconventional exploration prospects identified in the Taranaki
Basin, East Coast Basin and Canterbury
Basin that covers more than 2.7 million net acres of land,
prospective for major discovery in New
Zealand.
Resource Estimates:
The resource estimates in this document were prepared by Sproule
International Limited with an effective date of July 31, 2013, and by AJM Petroleum Consultants
with an effective date of September 1,
2008. Each is a qualified reserves evaluator in accordance
with NI 51-101 and the Canadian Oil and Gas Evaluations
Handbook.
Best Estimate is considered to be the best estimate of the
in-place volumes that will actually be present. It is equally
likely that the actual in-place volumes will be greater or less
than the best estimate. If probabilistic methods are used, there
should be at least a 50 percent probability (P50) that the in-place
volumes will equal or exceed the best estimate.
Undiscovered Resources:
Undiscovered Oil
Initially-In-Place (equivalent to undiscovered resources) is that
quantity of petroleum that is estimated, on a given date, to be
contained in accumulations yet to be discovered. The recoverable
portion of undiscovered petroleum initially in place is referred to
as "prospective resources," the remainder as "unrecoverable."
Prospective resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future development
projects. Prospective resources have both an associated
chance of discovery and a chance of development. There is no
certainty that any portion of the resources will be
discovered. If discovered, there is no certainty that it will
be commercially viable to produce any portion of the resources.
Exploration for hydrocarbons is a speculative venture
necessarily involving substantial risk. TAG's future success in
exploiting and increasing its current reserve base will depend on
its ability to develop its current properties and on its ability to
discover and acquire properties or prospects that are capable of
commercial production. However, there is no assurance that TAG's
future exploration and development efforts will result in the
discovery or development of additional commercial accumulations of
oil and natural gas. In addition, even if further hydrocarbons are
discovered, the costs of extracting and delivering the hydrocarbons
to market and variations in the market price may render uneconomic
any discovered deposit. Geological conditions are variable
and unpredictable. Even if production is commenced from a well, the
quantity of hydrocarbons produced inevitably will decline over
time, and production may be adversely affected or may have to be
terminated altogether if TAG encounters unforeseen geological
conditions. TAG is subject to uncertainties related to the
proximity of any reserves that it may discover to pipelines and
processing facilities. It expects that its operational costs will
increase proportionally to the remoteness of, and any restrictions
on access to, the properties on which any such reserves may be
found. Adverse climatic conditions at such properties may also
hinder TAG's ability to carry on exploration or production
activities continuously throughout any given year.
The significant positive factors that are relevant to the
resource estimate are:
- Proven production in close proximity;
- Proven commercial quality reservoirs in close proximity;
and
- Oil and gas shows while drilling wells nearby.
The significant negative factors that are relevant to the
resource estimate are:
- Tectonically complex geology could compromise seal potential;
and
- Seismic attribute mapping in the two, deep, liquids'-rich gas
plays can be indicative but not certain in identifying proven
resource.
Analogous Information:
Certain information in the Information Materials may constitute
"analogous information" as defined in NI 51-101, including, but not
limited to, information relating to the areas in geographical
proximity to the lands held by TAG. Such information is derived
from a variety of publicly available information from government
sources, regulatory agencies, public databases or other industry
participants (as at the date stated therein) that TAG believes are
predominantly independent in nature. TAG believes this information
is relevant as it helps to define the reservoir characteristics in
which TAG may hold an interest. TAG is unable to confirm that the
analogous information was prepared by a qualified reserves
evaluator or auditor or in accordance with the Canadian Oil and Gas
Evaluator Handbook. Such information is not an estimate of the
reserves or resources attributable to lands held or to be held by
TAG and there is no certainty that the reservoir data and economics
information for the lands held by TAG will be similar to the
information presented therein. The reader is cautioned that the
data relied upon by TAG may be in error and/or may not be analogous
to TAG's land holdings.
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. Such
statements can be generally, but not always, identified by words
such as "expects", "plans", "anticipates", "intends", "estimates",
"forecasts", "schedules", "prepares", "potential" and similar
expressions, or that events or conditions "will", "would", "may",
"could" or "should" occur. All estimates and statements that
describe the Company's objectives, goals, and or future plans with
respect to the drilling in the East Coast Basin 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
and production, geological risks, marketing and transportation,
availability of adequate funding, volatility of commodity
prices, environmental risks, competition from other
producers, and changes in the regulatory and taxation environment.
Actual results may vary materially from the information provided in
this release, and there is no representation by TAG Oil that the
actual results realized in the future would be the same in whole or
in part as those presented herein.
Other factors that could cause actual results to differ from
those contained in the forward-looking statements are also set
forth in filings that TAG and its independent evaluator have made,
including TAG's most recently filed reports in Canada under NI 51-101, which can be found
under TAG's SEDAR profile at www.sedar.com.
TAG undertakes no obligation, except as otherwise required by
law, to update these forward-looking statements in the event that
management's beliefs, estimates or opinions, or other factors
change.
SOURCE TAG Oil Ltd.