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.
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