TAG OIL
EXPLORATION WORLD
“ If we were to stop drilling here today , the oil would keep flowing for about another 10 to 15 years ,” he said . “ They ’ re nice long reserve life , index fields . They produce very well .”
Speaking about new drilling operations in the region , he added , “ These wells will cost us about $ 3 million to drill and complete and tie in and we ’ ll get a net present value out of these wells of somewhere between $ 10 to 30 million . It ’ s really a great little play for us .”
The success of smaller scale , but very stable operations in shallow plays like these , has afforded the company the ability to develop higher risk operations . With reportedly zero debt and about $ 50 million in reserve , TAG Oil is looking to explore deeper targets in the region . According to Cadenhead , there are numerous reservoirs situated at depths of between 4,000 and 5,000 meters . With larger pool sizes , he estimates the value of each of these wells would be closer to $ 20 million .
With stable cash flow from the Taranaki Basin , the company has been able to turn its attention to other regions yet to be developed , such as the East Coast Basin .
“[ The East Coast Basin ] clearly has a working hydrocarbon system ,” Cadenhead said . “ We know that because there ’ s 300 or 400 oil and gas seeps where oil and gas is actually gurgling out of the ground . So we know the kitchen is working there and we recognized that about five years ago and secured a very large land base-- nearly 2 million acres .”
He estimated it would take about three years to gather enough data and drill enough exploratory wells to prove commercial viability , but according to Cadenhead , several independent engineering assessments have indicated that the company is sitting atop reserves in the billions of barrels .
“ It just remains to be seen if it can be cracked ,” he said . “ We ’ re the only ones trying to crack it . It ’ s one of the main reasons the shareholders in TAG are keeping their fingers crossed and hoping for a hit over there , as well as the good work that we ’ re doing in the Taranaki Basin .”
The small staff size at TAG makes the company ’ s successes thus far
www . tagoil . com / default . asp 55