TAG Oil Ltd. Announces Abandonment Plans at Waitangi Valley-1 and Return to Drilling of Core Production Assets in Taranaki
Sep 16 14
TAG Oil Ltd. reported the company has agreed that after encountering extreme drilling conditions, including high pressure shallow hydrocarbon zones, in the interest of safety, the surface section of the Waitangi Valley-1 well, located in Petroleum Exploration Permit 38348, will be plugged and abandoned. The company will now mobilize the Nova-1 drilling rig and ancillary services back to Taranaki to focus on its core oil producing assets at Cheal in third quarter of fiscal year 2015 ending December 31, 2014 as previously disclosed.
East West Petroleum Corp. and TAG Oil Ltd. Announce Operational Update for New Zealand
Sep 4 14
East West Petroleum Corp. provided update on its operations in New Zealand. TAG Oil Ltd. is the operator and co-owner of all of the company's licenses in New Zealand. PEP 54879 (Cheal South), 50% East West, The Cheal-G1 well on the Cheal South permit has completed its scheduled 11-day flow test. Approximately 1,020 boe (94% oil) was produced during the test. Over the last 5 days of the test, the well averaged 127 boepd (93% oil) of steady production utilizing a jet pump artificial lift system. The well is now shut in and undergoing temperature and pressure analysis. The joint venture partners are continuing to review the prospectivity of the area accessible from the Cheal G-site to identify further drilling targets. The oil produced during the test has been comingled and sold with production from the Cheal E-site. Under the PEP 54879 joint venture agreement with TAG, East West is entitled to receive 100% of the first $2.5 million of revenue from the permit, while paying 100% of the costs to produce that revenue, in return for funding the first $2.5 million in exploration costs. After receiving the first $2.5 million in revenue, all revenues and costs will be split on a 50:50 basis between the joint venture parties. PEP 55770 (East Coast), 40% East West, East West announced that the joint operating agreement for PEP 55770 located in the East Coast Basin has been finalized with the permit operator TAG Oil Ltd. who holds a 60% interest in the permit. PEP 55770 was awarded in the 2013 New Zealand Block Offer and has a term of 10 years commencing April 1, 2014. Under the terms of the permit and JOA, the committed work includes the reprocessing of existing seismic data during the first 12 months. Post the completion of the committed work, and should the joint venture choose to continue with the permit, the next six months contingent work will entail the acquisition of 60 km of 2D seismic data followed a further contingent work period of 12 months which would include the drilling of one exploration well. Reprocessing of existing seismic data is currently underway. In addition, East West is awaiting the results of TAG's Waitangi Valley-1 well which is drilling in the nearby PEP 38348. Under the terms of the JOA and in return for funding 100% of the program mentioned above, East West will have access to all of the data and results of the Waitangi Valley-1 well, which will be combined with the reprocessed seismic to assess the prospectivity of PEP 55770 before committing to seismic acquisition in H1 2015. PEP 54877 (Cheal North), 30% East West, Production from the Cheal E-site remains stable with a low decline rate. July achieved the higher monthly average daily rate to date with 882 boepd (gross, 78% oil) produced through July from the Cheal-E1 and the E4 wells which continue to flow naturally and the E5 well which is on artificial lift with a jet pump. To date, the Cheal E-site has produced approximately 176,000 BOE (gross, 81% oil) since production started in mid-November 2013. In addition, a joint venture review of the Cheal-E2 drilling and completion operations that targeted the Urenui Formation determined that mechanical completion issues prevented commercial production from the Urenui. After comparing these results with all of the E-site drilling data now available and comparing with seismic coverage over the permit, the joint venture has decided to isolate the Urenui Formation in this well and re-complete Cheal-E2 to establish production from the Mt. Messenger Formation. Following recompletion, the E2 well will undergo flow testing and temperature and pressure analysis. The estimated net cost to East West is approximately NZD 240,000. The Nova-1 rig is scheduled to be used to drill the Cheal-E6 well on the PEP 54877 permit from the Cheal E-site prior to year end. The net costs of the Cheal-E6 well are approximately $1 million to East West and will be funded from the Company's existing cash balance. The Cheal E-site has the capacity for 12 wells to be drilled from the well pad and work continues by the joint venture partners to identifying additional E-site drilling targets for drilling in 2015.