TAG Oil Ltd. has acquired a 70% working interest and operatorship of the PEP 51153 (Puka) onshore permit in the Taranaki Basin of New Zealand. TAG’s joint venture partner in the Puka permit is MEO Australia Limited (30%). The Puka permit covers an area of approximately 85 square km (21,000 acres) and is located to the east of TAG’s producing Cheal field. Three wells have been drilled since the Puka oil field was discovered in 2012, with the Puka-1 and Puka-2 wells producing 100 bbl/d from the Mt. Messenger formation before being shut in due to low oil prices and mechanical issues.
In addition to Miocene-aged Mt. Messenger drilling opportunities, the Puka permit also contains the Shannon prospect, a deeper Tikorangi Limestone target situated directly below the Puka oil pool. The production capability from the Tikorangi Limestone has been well proven at the adjacent Waihapa oil field, which has produced in excess of 23 MMbbl to date. The Douglas-1 well drilled in 2012 at the edge of the Shannon prospect encountered a 145m of reservoir interval and oil shows in a down-dip location, with more than 350m of up-dip potential estimated.
TAG has acquired operatorship and a 70% interest in the Puka permit in return for a cash payment of NZ$250,000 to Kea Petroleum Limited, a company currently in liquidation. The acquisition and transfer of operatorship has been approved by New Zealand Petroleum and Minerals.
TAG and its joint venture partner, MEO, will hold a meeting imminently to discuss the work program for the remainder of 2016 and go forward plans for the acreage. It is anticipated that TAG’s portion of the fiscal 2017 work program on the Puka permit will be approximately NZ$75,000 and focus on the collection of gravity data and seismic interpretation. The joint venture is also committed to drilling one well on the Puka permit by FQ4/18 at a location and depth to be determined.
Toby Pierce, CEO commented, “We are very pleased to have completed the opportunistic acquisition of the Puka permit at such competitive terms out of liquidation. With proven production and several exploration targets identified, we see this as a complimentary addition to our portfolio where the TAG team can apply its extensive technical and operations experience in the Taranaki Basin. We are continuing to look for further opportunities to take advantage of our strong balance sheet and we are looking forward to working with our new partner, MEO.”
