TAG Oil’s Cardiff-3 Deep Well Drilling Update and Fracking Consent Granted
VANCOUVER, Oct. 7, 2013 /PRNewswire/ – TAG Oil Ltd. (TSX: TAO) and (OTCQX:
TAOIF), reports that the Taranaki Regional Council has granted the
Company consent to perform a fracture stimulation on the Cardiff-3 well
located in Petroleum Mining License 38156, should drilling results call
Cardiff-3 was spudded on September 2, 2013 and is presently drilling
ahead, on-time and on-budget at a depth of 3,918 meters. It will take
approximately 14 more days to reach its total projected depth of 4,900
meters, at which time, a decision will be made whether to complete the
well. Economic factors for completion, which would likely include a
hydraulic-fracture stimulation, will consider total meters of net gas
pay, indicative in situ permeability, and the interpreted volume of
original gas in place that could be accessed with this well bore.
It is anticipated that in the event of a success at Cardiff-3, three
wells would be needed to fully develop prospective resources estimated
at 160 BCF and 5.49 million barrels of condensate on a P50 basis.
Cardiff-3 is the first of three back-to-back deep wells being drilled
100% by TAG Oil, all targeting Taranaki’s successful deep Kapuni
Formation. TAG’s “mid case” (P50) prospective resources of the three
deep Kapuni prospects total 476 BCF of natural gas and 18 million
barrels of condensate.
Careful study has shown the formations being targeted for potential
hydraulic fracturing at Cardiff-3 to be completely sealed by over 4 km
of impermeable rock. If hydraulic fracturing is required, new
generation plant-based fracking fluid will be used and all fluids and
water will be contained in a closed system.
The Cardiff structure is a large anticlinal trap, some 12 km long by 3
km wide, and is a prospective target across the span of the structure.
Gas and condensates were discovered in the Cardiff-1 (Shell-1991) and
Cardiff-2A (Austral-Pacific 2002) wells: Cardiff-2 encountered 12
meters of net pay within the uppermost McKee Formation of the Kapuni
Group sands, and flowed over 3 million cubic feet and 100 barrels of
condensate per day (without fracture stimulation) on short-term
testing. More significant prospective resources exist in the deeper K1A
and K3E zones – the primary targets in the Cardiff-3 well – where
strong gas shows were encountered over a gross 600 meter interval in
the Cardiff-2A well. These went untested due to mechanical problems the
operator experienced while drilling the well, but these lower Kapuni
Group formations are the primary producing intervals in the nearby 1.4
TCF and 65 million barrels of condensate Kapuni Field.
Access to market for Cardiff gas is relatively straightforward, with the
surface location of Cardiff-3 being situated directly adjacent to
TAG-owned production infrastructure. This tie-in provides a link to the
strong North Island gas market, providing a number of commercial
opportunities, including clean power generation.
For further information regarding TAG Oil’s deep drilling program please
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 substantial oil and gas production and reserve growth
through development of several light oil and gas discoveries. TAG is
also actively drilling high-impact conventional and unconventional
exploration prospects identified across more than 2,669,780 net acres
of land in New Zealand.
The resource estimates in this news release were prepared with an
effective date of July 31, 2013. The estimates for Cardiff have been
externally prepared by Sproule International Limited and the remaining
estimates were prepared internally by TAG professionals, both of which
are qualified reserves evaluators in accordance with NI 51-101 and the
Canadian Oil and Gas Evaluations Handbook.
Prospective resources are defined as 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.
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
-- 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
-- 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.
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, production rates, optimization, infrastructure capacity and or
future plans with respect to the drilling in the Taranaki 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, the risk associated with estimating undiscovered
original initially-in-place described above, availability of adequate
funding, volatility of commodity prices, imprecision of reserve
estimates, 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 will be the same in whole or in part as those presented
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.