Oil and gas producer TAG Oil Ltd says it has bought a 20 percent stake in offshore exploration permit PEP 52181, which covers 17,150 hectares, just 8km offshore from Taranaki.The permit, operated by a subsidiary of Australian-based Roc Oil Ltd, is close t
Oil and gas producer TAG Oil Ltd says it has bought a 20 percent stake in offshore exploration permit PEP 52181, which covers 17,150 hectares, just 8km offshore from Taranaki.
The permit, operated by a subsidiary of Australian-based Roc Oil Ltd, is close to existing infrastructure, which would make commercialisation of any find efficient and cost effective, the company told the Toronto Stock Exchange.
The permit area included the Kaheru Prospect and had extensive seismic data from surveys.
It had been identified as having a good chance for success, as the Miocene-aged rock in the Kaheru prospect was on the same geological structure as many significant Taranaki oil and gas fields, including Rimu, Kauri, and Manutahi immediately north, and the Tariki, Ahuroa, Waihapa and Ngaere fields further north.
Immediately to the west, the large Kupe gas-condensate field is now also in full production.
Tag chief executive Garth Johnson said the company was looking forward to developing Kaheru for exploration drilling.
L and M Energy said earlier this year that the Kaheru prospect had multiple potential reservoir targets and the potential to contain an estimated mean prospective resource of 350 billion cubic feet of gas and 10 million barrels of condensate.
In May, the then partners in the permit, Roc Oil (50 percent), Mighty River Power Gas Investments (20 percent), L and M Energy (15 percent) and Mosaic Oil NL (15 percent) said they had an option to drill an exploration well by the end of 2012.
Tag also reported production testing of the Cheal-BH-1 horizontal well continues, with the well now flowing oil, gas and fracture fluids, and once all fracture fluids and excess fracture sand had been recovered, a reliable stabilised flow rate would be achieved.
The company had achieved the highest daily oil and gas production volume in Cheal's history, said Mr Johnson.
It will re-start drilling at Cheal and Sidewinder in February.
The Canadian-listed company has said it expected to develop multiple oil and gas discoveries in the Taranaki Basin, while on the other side of the country, in the East Coast Basin, it was investigating the Waipawa Black Shale and Whangai Shale source-rock formations.
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