Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Yes it was.
Interesting that they have taken a low key approach to releasing this information. Is this the new TAG ???
Where did you find this ? I can't find it anywhere ?
News ???
Cheal B6, B7 & B8 must be drilled by now. B7 spud on January 11th or 13th so B8 cannot be far from finished. Testing of B6 & B7 was to commence after B7 was drilled so by the time they finish testing those 2 they should be able to move straight into B8.
We must be getting real close to some news !!!!
NZ Energy spiked big time today. It is nice to have 2 stocks with such good growth going at the same time :) (TAO & NZ).
Cabel - bet your glad you came along for the ride.
Dana1
dough
In case you missed it there are 2 very good updates posted today on stockhouse for NZ. We should be hearing something early in February on CM02 & Ranui 2.
As for TAG, things sure seem to be lining up for a robust and exciting February.
Cheal B6 & B7 should be tested and flow rates.
Cheal B8 should commence drilling in early Feb and maybe even Cheal B9.
Financial Statements & MD&A due for Dec 31/11. Should get an update on Sidewinder & Cheal Fields, however, it does appear that Sidewinder is producing at full capacity.
Go TAG Go !!!!
Neil Ritchie - NZ Year in Review
Mr. Ritchie talks about TAG and the Sidewinder Production Station, indicating they are operating at full capacity and producing 30 million cubic feet of gas per day.
This is certainly good news and should generate close to $150k revenue per day.
B6 which is drilled and being cased and & B7 which spud yesterday are to be tested together so some serious results and potential gain in stock price lie ahead in the very near future.
Interview with Garth Johnson (posted on Stockhouse) indicates that B6 has been drilled and B7 is about to spud. Once drilling on B7 is complete then B6 & B7 will be tested at the same time.
There will be no news on B6 until B7 is drilled. Patience is a virtue and hopefully the market will continue to support a market price of $8+ without any flow rates, which won't likely happen now until early February.
Stockhouse interview is a good read.
Dana
ariadnddough
There is not doubt that right now TAG is the safer and more established play and I am in no way suggesting anyone dump their TAG shares for NZEC. I am only bringing this to the attention of those who might be looking at an add-on.
What I like about NZEC is that they do have one producing well (580 BOPD)Copper Moki 1 (CM1) and are currently drilling CM2 with CM3 to immediately follow. All wells are being drilled from the same platform so potential is for similar results as CM1.
Secondly, they are currently drilling Ranui 2 on the East Coast which is right next door to TAG. If this hits, this will take not only this stock but TAG into the next level as if they are successful then surely TAG/Apache will be also.
3rdly, they have infrastructure in place to handle all the oil for CM1, CM2 and CM3. If they get enough gas then yes they will have to put in infrastructure to bring the gas to market. Right now they are producing mostly oil and generating cash flow at a higher rate than TAG did until earlier this year.
I did ask the question about raising funds and they felt that they would do so after they see the success of their current drilling program, which they have the money for. It seems like they are leaning initially towards debt versus share dilution, but I'm sure that decision will be made by people smarter than me.
580 BOPD is over $1.7 million per month cashflow so raising money will not be their immediate problem unless they plan a major drilling program and need to fund. If CM2 & CM3 hit they could double or triple their current cashflow.
I have no idea what it might take to bring East Coast production on-line but I wouldn't be too surprised to see a farm out agreement like TAG has with Apache.
One final thing is that NZ has more permitted land than TAG. Who knows how good it is but, it just seems to me like there is potential here.
Dana1
Sitting back, enjoying the ride. B6 has hit target depth so we should be getting some news soon. B7 to spud on Jan 10th and very likely B8 & B9 to follow.
New Rig is not arriving until February so previous announcement of drilling Sidewinder 5 & 6 will not likely happen until it arrives. The rig will then be shipped east to commence drilling in April at Boar Hill.
On another note, I received confirmation the other day from IR at NZEC that they have started drilling their Copper Moki 2 well and hope to have it complete by the end of January and of more importance Ranui2 on the EAST Coast which will be complete by the 1st or 2nd week of February. If either of these wells hit, especially, the East Coast, then expect things to continue to ramp up on TAG.
As previously noted, keep your eyes on NZEC as I believe it has just as good of potential as TAG and your entry point is $1.30 right now.
Happy Investing.
The Report lays out the development plan as follows:
Phase 1 (completion date January 2013) - drill & test 4 wells - 2 at Boar Hill & 2 at Waitangi plus complete 130 kms 2D Seismic.
Phase 2 (completion date April 2014) - drill & test 2 horiztontal wells in either North or South permit depending on success in Phase 1. Also complete 3D Seismic.
Phase 3 (completion date early 2015) Drill & test 4 more wells in either permit depending on success of P1 & P2, continue with 2D Seismic.
Phase 4 will be when drilling really ramps up starting in 2015 depending on successes of P1, P2 & P3.
NOTE: - Apache can withdraw at the end of any phase if they are not happy with the results.
There are only 10 wells planed to be drilled over the next 3 years, unless of course Apache & TAG make changes to the plan.
Looking forward to April & of course the Ranui 2 well currently being drilled by NZEC on the East Coast. By mid year we should have some sort of idea how successful the East Coast is going to be.
NOt off topic at all.
Many analysts are predicting oil is the place to be over the next couple of years and more so if Iran does play these silly games.
So TAG and the B field are coming along at a good time.
Drill baby drill and bring on the oil :)
Cheal B6 to Spud today or tomorrow.
Cabel posted an article on Stockhouse dated Dec 23/11 confirming that Cheal B6 was just about to spud (late 23rd or 24th) with completion in early January.
The article also states that Cheal B7 & possibly B8 & B9 will follow.
The are targeting the same shallow Urenui formation and deeper Mount Messenger formation that Cheal B5 hit the 1870 BOPD.
Disappointing that they didn't spud on the 16th as planned but at least things are finally confirmed as moving forward.
Merry Christmas & Happy New Year !!!
And another thought.
I don't think management has the same baggage hindering them that Garth Johnson & Alex Guidi did with TAG. There might be a little less resistance & skepticsm when News Releases come out.
Don't get me wrong, I am a firm believer in TAG and have a significant investment here, but I have been in it long enough to know that the market has not been kind to management.
They have done a great job in getting TAG to this level and hopefully we will hit a home run with this stock starting in 2012.
NZEC does seem to have the same potential as TAG and I like the fact I can gather shares at a much lower price than I did with TAG.
Cheers.
Also, just another thought. Everytime TAG announces something positive, NZEC seems to go up as well. Someone else out there thinks there is a positive correlation in activity.
And if NZEC is successful on the East Coast, I bet that TAG's share price will jump as they are targeting similar formations.
Apache has also been very front and center in the news and their latest newspaper report suggests they believe the East Coast will represent a "Significant Prize" moving forward.
Just my uneducated thoughts and reasoning.
GLTA & Merry Christmas.
Have been following this for the past few months. Read a good article (grahamanalytics.com) Titled "NZEC - what you know and who you know" dated Dec 13, 2011. which gives a pretty good history of the company and the potential.
My buyin on TAG started a little later at a higher price and right now I am thinking that at $1.06 NZEC is looking pretty good. I have been buying on the lows over the past few weeks and if they have any good results, it will be much easier getting a double or triple out of this.
Of Moki 2 has similar results (ie 550 BOPD), then the company will have over 1,000 BOPD on just 2 wells.
Investor relations also confirmed that Moki 3 will be drilled as soon as Moki 2 is complete and that they have identified 6 other drill ready sites (3 wells each) that are believed to be similar to Moki 1,2 & 3.
Using Keith Schaffers method of valuation the stock price would jump to over $1.20 without any consideration for potential of either the East or West Coast.
1,000 BOPD X $70k per flowing barrel divided by shares (57 million)= #1.22.
Based on the success that TAG and others have had in the Taranki basin, I feel this stock is no more risk than TAG was when they started up. JMHO.
Dana
I agree 2012 is going to be exciting & I don't think that we will have to wait very long for the momentum to start.
Cheal B6 should be drilled or close to it by now if it spud on Dec 16th as planned. If this tests out anywhere near B5 we could be looking at another 1000 BOPD+ well of naturally flowing oil.
New Zealand Energy (NZEC) Investor relations (their neighbour on both the East & West) has confirmed to me they are planning on spudding Moki 2 and their East Coast well prior to Christmas and after a short Christmas break finalizing both drills early in the New Year. The East Coast could be extremely exciting for TAG if it is successful. Keep your eye on this stock too. I think it is another TAG, just a litte further behind. IMO.
Moki 2 could announce quickly if they do like they did with Moki 1 and only run a 2 day test.
In addition to Cheal B6, TAG has indicated they will quickly follow with B7 & B1 & 2 as part of their drilling program, as well when the new drill arrives in January they plan on drilling Sidewinder 5 & 6 prior to sending it East to drill for Apache in April.
This is only part of what we know. Management consistently surprises us with changes to drilling programs and they might go after Moki or Hellfire or something we aren't expecting.
Commercialization of Cheal C gas will be important so looking forward to that happening (I think they said by the end of March 2012).
By the time we get any East Coast results from Apache, this thing could be showing a significant up tick in SP, so anything from there could be a real bonus.
Hang onto your shares & have a very Merry Christmas & a prosperous New Year.
Corporate Presentation - AGM Dec 8/11
Had a good read of this and can only wonder why more people haven't grabbed onto this stock.
The presentation confirms the following:
1. All Sidewinder wells in production by Dec 15/11 (pg 9)
2. Cheal C2 (2333 IP boepd)to be in full production by Mar 2012 (pg 12)
Drilling Plans: (Taranaki Basin)
18 wells @ Cheal (pg 4)- Cheal B6 to Spud Dec 16 (tomorrow)
Cheal B6, B1 & B2 to be in production by Mar 2012 (pg 12)
10 wells at Sidewinder (drilling to start Q1 2012 (pg 9) not sure if they meant January 2012 as previous announcements have indicated they will drill Sidewinder 5 & 6 with the new drill rig secured and arriving in January 2012.
Drill Cardiff Deep Prospect (pg 4)
Deep Gas Hellfire drill to take place Q3-4 2012 (pg 4,9)
East Coast Basin
4 wells with drilling to commence April 2012
Vague references to drill 20 shallow wells at Waitangi Hill (50-150 BOPD). As I read it, this would be a TAG project alone as Apache is not sharing in these costs.
Current product sits at approx 4000 BOPD with an exit rate for 2011 of 5000 BOPD (60/40 oil/gas) (pg 3)
There is much more in here, but a great read and when you start doing the math ... WOW !!!! Even without the East Coast this is a winner.
GLTA for 2012 - The Stock Price will trend upwards as production and drilling unfold.
Cheal C Gas
Will be very interested to find out what it will take and when the gas will be commercialized. This is huge cash flow for the company.
On another note it is good to see that there will be no appeal against TAG's 18 well drilling program. That being said Cheal B6 should spud on December 16th. I imagine they will finish this prior to Christmas with some sort of announcement to follow early in 2012.
An update on the Sidewinder production station would also be nice. Is this asking Santa for too much ???
Merry Christmas all.
Dana1
Ca$h !!
Would settle for either or though, but ca$h would probably attract more interest and keep dilution down. With all the spare cash TAG has on deposit now and with the revenue they are generating now, I can see that it won't be too far down the line that they may have to consider dividends anyway!!
What a nice problem to have ... too much cash !!
Cabel ... Glad your still around. Always enjoyed your input and take on things.
Starting to get really excited once again and just hoping that we don't get another disaster or negative surprise that will hold this stock back. It seemed like we were ready to take the next step (ie $10+) just before the Europe fallout and drilling delays & bad press.
Hopefully with things seeming to stabilize and if we can get decent flow rates out of wells drilled then I think we are off and running again.
Not sure but I think we could be in for a pleasant surprise on Cheal C2 as I believe there is some upside potential for significant oil flows. That would be awesome and if they could get the gas into production it is more $$$$ every day.
I think a bigger bang would have been achieved had TAG announced a dividend versus the share buyback. JMHO.
I confess. It is my post.
The other big IF I forgot to mention is
D) Europe doesn't implode and take the world down with it.
Here's hoping.
GLTA
Dana
Where is Cabel ?
Have been missing your input and insight on TAG. Hopefully you didn't get discouraged and bail.
I think we are finally ready to go to the next level.
2012 looks really promising !!!
From the New Zealand Herald
20% chance of good oil in Hawkes Bay
By Patrick O'Sullivan 5:30 AM Thursday Dec 8, 2011
Oil company Apache says it has a 20 per cent chance of finding oil in commercial quantities in Hawkes Bay.
Apache has entered into a joint venture with Tag Oil, which has extensive exploration permits onshore in the East Coast Basin.
Apache has agreed to spend $100 million to explore and appraise the potential development programme in return for a share of any profits.
The work is planned to take place over the next four years with seismic surveying already under way.
Apache senior project adviser Alex Ferguson said the company had received permission from most land owners and local iwi consulted.
A commercial oil or gas find on the East Coast would be a major shift for the Taranaki-based petroleum industry.
Consultant geologist David Francis said Apache's 20 per cent assessment was above the industry norm of 10 per cent, helped by Apache's experience and new technology.
"Apache is bringing a whole new technique to New Zealand, which is to explore shale reservoirs as well as the conventional sandstone," he said.
"The shale formations in the East Coast Basin are very similar to those that produce oil and gas in North America."
Ferguson said the next stage of the exploratory mapping phase will be the detonation of small charges in 12-15m holes in January, with the resulting data recorded for analysis.
"We are keen to know if there is oil there - can we unlock the secrets 2km down.
"We're looking for something between 2000m and 3000m because the pressure will be pretty good," he said.
Deep under the surface are deposits of carbon-rich mudstones, which generate both gas and oil. There are hundreds of naturally occurring gas and oil seeps visible on the surface.
From the beginning of the last century to the late 1980s a hospital near Gisborne was heated using seeping natural gas.
By Patrick O'Sullivan
GREAT NEWS !!!
Now bring on the flow rates from Cheal C1, C2 & A8 along with an update on Sidewinder 2 & 4.
Keep your fingers crossed for no appeal so Cheal B6 can commence drilling on Dec 16th.
Looking better every day !!!
Over $100 million in oil revenues alone is absolutely huge.
As you said, this does not factor in the other wells that are currently being tested (Cheal C1 & C2, CA8), plus there are 4 other A wells being worked over which in the past have seen increases of about 200 BOPD per well.
IF Cheal B6 & B7 show the same kind of flow rates as CB5, then the sky is the limit, without the east coast.
LOOKING REALLY GOOD !!!!
Some very much needed and welcome news for this stock.
1700 BOPD of OIL is probably about 1,300 more than the market was expecting based on past Cheal drill results. This bodes very well for B6 & B7 which are the next drill targets. Also assuming that they can get drilling without any appeal on the most recent decision.
Hopefully Cheal A8, Cheal C1 & C2 flow rates are solid as well. Any kind of good news regarding flow rates will put TAG well over 3000 BOPD of just oil production. This does not take into account any gains from the 4 wells currently being worked over in the A field.
Starting to feel a little better about this stock but sure wish the price would get back to where it belongs.
Cheers.
Sounds like drilling could ramp up big time in very short order. 2 drill rigs = lots of news
Tuesday, 29 November 2011
Neil Ritchie, New Zealand
NEW Zealand-focused Canadian junior TAG Oil will soon have two rigs working on opposite sides of the North Island, including the VR500 rig being imported next January.
Vancouver-headquartered TAG announced overnight that it had concluded an agreement giving the company exclusive rights to use the state-of-the-art drilling rig that is due to arrive at Port Taranaki, from American Augers in Ohio, US.
Under the terms of the agreement with Petra Drilling, a 100%-owned subsidiary of Wellington-based Webster Drilling and Exploration, TAG will provide secured financing for Petra to acquire and deliver the fully automated rack and pinion, top-drive drill rig to New Zealand.
In exchange, TAG secured a fixed price for future drilling, as well as the first right of refusal on use of the rig until all financing has been repaid.
“This is a great opportunity for TAG Oil and the New Zealand oil and gas industry,” chief executive Garth Johnson said.
“The VR500 rig is safer, more efficient, highly cost-effective and most importantly, it is environmentally friendly with a significantly smaller footprint on the area where drilling operations take place.”
Chief operating officer Drew Cadenhead told Energy News Bulletin in New Plymouth this morning that although the VR500 would be arriving in Taranaki, it was destined to work on the east coast.
“The main point of bringing in this big rig is for the east coast, where we are planning four wells, two in the north and two in the south, during the first and second quarters of 2012.”
The wells, the first TAG will be drilling in conjunction with Apache Corporation, will test conventional and unconventional petroleum plays.
Cadenhead said the wells would be drilled to depths of about 1500m to 2500m.
“They will be testing conventional and the unconventional but not shales,” he said.
“This is different from what is happening in North America. They will be testing oil plays in siltstone and mudstone reservoirs.”
Apache is earning up to 50% stakes in TAG’s three onshore east coast leases by contributing up to $US100 million over the next four years.
However, Cadenhead said TAG was intending to use the VR500 rig to drill perhaps two shallow appraisal wells at its onshore Taranaki Sidewinder oil and gas field – “to blow out any cobwebs, check things out and get any necessary work done by Taranaki’s energy support service companies”.
TAG would then move the rig to the east coast.
As well, TAG received all the necessary resource consents – from the Taranaki Regional Council and the Stratford District Council – to drill up to 18 wells at its onshore Taranaki Cheal oil and gas field.
An independent commissioner, appointed by the SDC, recently granted the consents after affected landowner Sarah Roberts requested a hearing, holding up TAG’s plans to start drilling immediately.
Earlier this month, Ensign International made about 42 rig and associated staff redundant, primarily because Roberts’ appeal gave no certainty of future work for perhaps several months, given the Christmas-New Year holiday break.
There were fears that some of those redundant workers could head to Australia if no guarantees were made about a quick resumption of drilling.
However, given the commissioner’s approval, TAG plans to resume drilling at Cheal, utilising the Ensign Rig 19, as soon as possible after the December 15 deadline has lapsed, if no appeals have been filed by then.
“We can only hope that if we can get drilling by mid-December, we will not have lost any of the experienced rig workers to Australia,” Cadenhead told ENB.
“If they are still here, we’ll put them back to work in time for Christmas.
“We definitely will be drilling Cheal-B6 next, possibly B7, B8 and B9 to follow immediately afterwards.”
Johnson said his company was very pleased to have received the commissioner’s consents.
“Consent was granted after an independent review of all pertinent information and therefore I trust that common sense will prevail and an appeal will not be filed,” he said.
Click here to read the rest of today's news stories.
I think the best news here is that TAG has secured consistent access to a drill rig.
It seems that the only way this stock is going to gain any momentum and keep it, is for continual drilling activity to take place. The market does not seem to want to reward potential, so it is "SHOW ME RESULTS".
Drill baby drill !!!
We need some flow results on the drilled wells confirming OIL. This stock is being penalized as the market does not like natural gas and TAG has lagged in oil production (less than 1000 BOPD).
We need to new wells to get flowing and hooked up and producing oil.
It is nice to see management respond to this issue and clarify the work that is going on including the wells being reworked.
They did however contradict previous announcments wherein they said they would be drilling Cheal B6 & Cheal A9. In this announcement they said it would only impact Cheal B6.
I am really hoping that they will come forward with some flow rates SOON on the new wells and a further update on flow rates for the Sidewinder Production facility. I know it takes time, however, in these crazy market times, anything they can do to calm the waters would go a long way.
The good news from this announement is that they are reworking 5 existing wells which could improve production (based on previous success)by 150-200 BOPD per well. This could see production from Cheal more than double current levels (800 BOPD)
Oil productions could be as follows:
Existing field 800 BOPD
Workover wells conservative 750 BOPD - possibly 1000 BOPD
Cheal A8 & B5 - 300 BOPD each best guess (CB4 & CA7 over 300)
Cheal C1 & 2 - unknown as mostly gas but could reach 300 BOPD
Sidewinder oil - 160 BOPD (40 per well)
We should be well over 2000 BOPD in oil production plus gas (5000 BOE) by the end of the year.
Surely this is going to make the SP more than a mid $5 stock ???
2 down ... 8 to go.
Really good news !!!
If TAG continues to have positive drill results, it seems like the only thing that is going to keep this stock from moving up is total world disaster (maybe that's just around the corner).
My biggest question with Cheal C1 & C2 is what is it going to take to get the gas to market ? Will they run a pipeline into their Cheal Facility or will they have to build another processing station ?
The oil is easy as they can bring it to the surface, store and truck as this is the standard for New Zealand.
I would think the Cheal A8 could be brought to market quickly but it would be good to know when we can expect to see these new wells producing, especially after how long it has taken for Sidewinder wells to come on stream (2 still to come this month).
By the time we get the September 30th financials (due end of November), all 4 Sidewinder wells should be in production and 1 maybe 2 more wells drilled. The management report should be very positive and exciting even if the cash flow won't begin to reflect until Q3 financials are release next February.
It really is time for this stock to see some sustained growth. We are still below Dec 31/10 levels, which is hard to believe considering all the positive developments of the past 10 months.
Warrants:
Are the outstanding warrants negatively impacting the share price?
Can't say as I understand what impact they might be having on the market. I would have thought with the announcement of 2 more successful wells drilled, that it would have had more of an impact, especially on a day when the markets are up.
Any wisdom out there ??
Another somewhat lame announcement.
It is great the facility is up and running but the flow rates posted are too vague as they don't identify which wells are connected and how long the flow rates are for.
When you say you are producing between 6 & 12 million ft per day that is a big difference and the market is going to lean towards the bottom number when projecting value.
This announcement could be seen as negative in the market as the wells might not be seen to be able to producing what was originally thought. IMO.
What we really need now is some positive drill results. They have been drilling for over a month now and should have completed Cheal C2 & quite possibly Cheal A8 or A9.
Hopefully by the time we get June 30th financials (end of Nov), we will have a management update on flow rates with all 4 wells connected.
It's time for some news !!
Regardless of the fact that TAG is holding up reasonably well in uncertain markets, the lack of news is hurting investor confidence in this company. On a day when both the TSX & Dow were up, TAG drops another nickel.
TAG appears to have hooked up Sidewinder 1 and is testing, so why not let the market know something ?
TAG has drilled Cheal C2 and has probably spud Cheal A8 by now, so why no news ?
Hopefully next week !!!
Something is leaking out - which would likely be why the stock showed some increased trading interest and a little upward movement in price today.
According to my friend IR suggested that drilling had concluded on Cheal C2 and that the service rig would be brought in after an additional 3 wells were drilled in the Cheal field, so they will begin testing them one after another as they did with Sidewinder 2, 3 & 4.
If TAG goes according to their recent announcement they should be setting up to drill Cheal A8 or A9 right now so this will probably be done within the next couple of weeks. It is possible they are drilling now or close to starting. It would be nice to have eyes on the ground but NZ is a long ways away.
IR also indicated to my friend that plans were to complete the 10 well drilling program November 30, 2011. Not sure if that is possible but if it is we are in for a lot of news over the next 60 days or so.
I can't see any way the stock can stay down if their drilling program proves successful. Each successful new well has to bring anywhere from 50 cents to a $1 per well in share value.
Drill baby drill :)
Also, we must be getting real close to an announcement on production from the Sidewinder facility. The pictures (dated Oct 3/11) and comments on their BLOG indicate final stages of testing and Sidewinder 1 hookup. 2, 3 & 4 cannot be too far behind. Not sure how long it takes them to fully test their plant, but we must be getting close.
Go TAG Go !!!!
Where have all the posters gone ?
This board is too quiet these days. Someone must have something positive to post ???
Try to cheer me up :)
Sidewinder Production Facilty
TAG has updated their Blog with photo's showing the various components being tested prior to production.
Looks like we are getting close to some Cashflow :)
Wow ... What a melt down !!!!
Hopefully this world carnage will end soon, so we can get back to normal markets.
The fundamentals of this company have not changed, only the stock price. Assuming positive drill results on Cheal C2, and the recent Apache announcement, things are actually better than they were before this.
We do need some good news to come out of TAG soon to help offset some of the panic and fear going on right now. Can't believe there are so many people willing to sell shares at such low prices. Wish I had more to invest.
Some announcements on Sidewinder Production facility and hookups etc. would help, but in the end it is only going to be new drill results that will make any meaningful impact.
Hard to believe we are $1 below 2010 stock price after all the good the company has generated in 2011.
Production Station nearing completion. See new pictures posted on Tag's Blog.
Drilling Program Update
TAG preps Taranaki drilling program
--------------------------------------------------------------------------------
Monday, 19 September 2011
Neil Ritchie, New Zealand
NEW Zealand-focused Canadian junior TAG Oil is planning to appraise its oil and gas discovery in the onshore Taranaki area previously known as Cardiff, as well as drilling four more development wells in the nearby Cheal oil field.
Chief operating officer Drew Cadenhead told EnergyNewsBulletin in New Plymouth this morning that TAG was moving the Ensign Rig 19 to the Cheal C wellsite just south of Stratford and hoped to spud Cheal-C2 next weekend.
This followed the successful drilling and testing of the initial Cheal-C1 exploration well, in its 100%-controlled exploration lease PEP 38156, earlier this year.
Cheal-C1 intercepted oil and gas-bearing sands in the Miocene-aged Mount Messenger Formation and the well subsequently flowed 1.5-3 million cubic feet per day of clean dry gas during testing.
There were also “substantial volumes” of light oil produced during swab testing but Cadenhead said at that time that it was difficult to measure volumes of oil produced due to the waxy crude solidifying.
However, TAG estimates production capabilities from Cheal-C1 to be similar to the nearby sidetracked Cheal-B4ST well that flowed 360 barrels of oil plus 240 thousand cubic feet of gas per day.
Today Cadenhead told ENB that Cheal-C2 would target both the Mt Messenger and the shallower Miocene-aged Urenui Formation but not the deeper Moki Formation, where Cheal-C1 encountered strong oil shows within a 73m-thick sandstone section, as this zone proved non-commercial on testing.
“This is going to be a fair stretch in directional drilling work; the well will have a total measured depth of about 2200 metres but a true vertical depth of only about 1800 metres.”
TAG's technical interpretation indicated that Cheal-C1 penetrated a "transitional zone" where oil migrated through the contacted zone into a large structural closure, updip from the Cheal-C1 penetration.
It is believed Cheal-C2 will target this updip structure.
Operator Shell New Zealand drilled the original Cardiff-1 well in 1992 and encountered hydrocarbon shows in both the Urenui and Mount Messenger formations.
Cadenhead also said that after Cheal-C2 had been completed, the rig would move to the nearby Cheal field, in mining lease PMP 38156, to start the first of four development appraisal wells – Cheal-A8 and 9, and Cheal-B5 and 6.
“We are marching out from the present producing discovery areas and hope to discover more pools we can commercialise.”
TAG was looking to test only the Urenui sands with the Cheal-A8 and 9 wells, but both the Urenui and Mt Messenger with Cheal-B5 and 6, and hoped to finish this latest Cheal campaign by Christmas.
Click here to read the rest of today's news stories.
$7.51 Close - good finish to an otherwise non-eventful week.
Good to see the stock holding steady at over $7.25. Not sure what caused the last hour jump in price, hopefully we are going to finally get some meaningful news out of TAG.
Still no word on the Q1 financials, which as an ex-banker always raises questions as to why, especially when they have a track record of filing on time.
Looking forward to news on the Sidewinder Production Station and on any possible drilling that might be going on. Sure wish management would advise when they have spud a new well. They have a great web-site & blog and it would be so easy to post a picture of the rig and date when they start drilling.
Maybe next week !!!