VANCOUVER, Jan. 31, 2013 /PRNewswire/ - TAG Oil Ltd. (TSX:
TAO and OTCQX:
TAOIF) announced today that the Company's 100% owned New Zealand
subsidiaries have concluded an agreement with Apache New
Zealand
Corporation LDC, which results in an early termination of the
Farmout
Agreement dated September 1, 2011.
This agreement relates to
exploration in Petroleum Exploration Permits 38348, 38349 and
50940
located in the East Coast Basin of New
Zealand.
Main Highlights of the Agreement:
Apache has paid TAG Oil a lump sum payment to satisfy its
obligations
related to funding Phase 1 operations under the Farmout
Agreement.
TAG Oil will retain all assets developed under the Agreement,
including
all seismic and technical work completed by the Joint Venture.
TAG retains its 100% interest in the subject East Coast Basin
permits,
including the Waitangi Hill shallow oil discovery.
TAG Oil CEO Garth Johnson commented,
"Although we are disappointed that
Apache's shift in corporate strategy resulted in a refocusing of
their
international holdings, we do understand that tough decisions
sometimes
need to be made. TAG remains highly enthusiastic about the future
of
these prospects: All the work completed to date as a result of our
JV
Phase 1 activities strengthens our beliefs in the potential of
TAG
Oil's East Coast Basin holdings. We're also pleased to have
full
control back over the project with funding in place."
TAG intends to utilize the lump sum payment received by Apache to
fund
the drilling of up to four East Coast Basin wells as planned in
the
Apache-agreed Phase 1 work program. These wells will test
several
high-impact play objectives including the Waipawa and Whangai
source
rocks that have independently been confirmed to be generating 50
degree
API oil. Additionally, these naturally fractured, high-quality
source
rocks are believed to be widespread across TAG's acreage.
Independent
assessments have concluded that there are approximately 14
billion
barrels of undiscovered original oil in place potential, within
less
than a fifth of TAG's total land holdings on the East
Coast.
Drilling of the first East Coast wells is expected to commence in
late
March/April 2013, subject to receipt
of the necessary consents from
regional government. TAG will utilize conventional vertical
drilling
techniques similar to those used by TAG Oil over many years in
its
successful Taranaki Basin operations.
Mr. Johnson concluded: "It was a pleasure to have had the
opportunity to
work closely with Apache. Our work together provided important
geotechnical and operational related work, which has confirmed
our
belief in the major potential of this project, and advanced it
to
drill-ready status. Furthermore, TAG's cash flow and assets have
grown
dramatically since we first signed the agreement with Apache. So
the
Company can now fund further drilling operations and
exploration
activities from a place of strength and greater
flexibility."
TAG Oil Ltd.
TAG Oil Ltd. (http://www.tagoil.com/) is a Canadian-based
production and exploration company with operations
focused exclusively in New
Zealand. With 100% ownership over all its
core assets, including extensive oil and gas production
infrastructure,
TAG is enjoying substantial oil and gas production and reserve
growth
through development of several light oil and gas discoveries. TAG
is
also actively drilling high-impact exploration prospects
identified
across more than 2,953,810 net acres of land in New Zealand.
In the East Coast Basin, TAG is pursuing the major
unconventional
resource potential believed to exist in the tight oil
source-rock
formations that are widespread over the Company's acreage.
These
oil-rich and naturally fractured formations have many similarities
to
North America's Bakken source-rock
formation in the successful
Williston Basin.
Important information:
It is equally likely that the actual remaining quantities recovered
will
be greater or less than the best estimate. Undiscovered
Oil
Initially-In-Place (equivalent to undiscovered resources) is
that
quantity of petroleum that is estimated, on a given date, to be
contained in accumulations yet to be discovered. There is no
certainty
that any portion of the undiscovered resources will be discovered
or
that, if discovered, it will be economically viable or
technically
feasible to produce.
Exploration for hydrocarbons is a speculative venture
necessarily
involving substantial risk. TAG's future success in exploiting
and
increasing its current reserve base will depend on its ability
to
develop its current properties and on its ability to discover
and
acquire properties or prospects that are capable of commercial
production. However, there is no assurance that TAG's future
exploration and development efforts will result in the discovery
or
development of additional commercial accumulations of oil and
natural
gas. In addition, even if further hydrocarbons are discovered,
the
costs of extracting and delivering the hydrocarbons to market
and
variations in the market price may render uneconomic any
discovered
deposit. Geological conditions are variable and
unpredictable. Even if
production is commenced from a well, the quantity of
hydrocarbons
produced inevitably will decline over time, and production may
be
adversely affected or may have to be terminated altogether if
TAG
encounters unforeseen geological conditions. TAG is subject to
uncertainties related to the proximity of any reserves that it
may
discover to pipelines and processing facilities. It expects that
its
operational costs will increase proportionally to the remoteness
of,
and any restrictions on access to, the properties on which any
such
reserves may be found. Adverse climatic conditions at such
properties
may also hinder TAG's ability to carry on exploration or
production
activities continuously throughout any given year.
The significant positive factors that are relevant to the
resource
estimate are:
proven production in close proximity;
proven commercial quality reservoirs in close proximity;
and
oil and gas shows while drilling wells nearby.
The significant negative factors that are relevant to the
resource
estimate are:
tectonically complex geology could compromise seal potential;
and
seismic attribute mapping in the two deep liquids-rich gas plays
can be
indicative but not certain in identifying proven resource.
Important information:
Cautionary Note Regarding Forward-Looking Statements:
Statements contained in this news release that are not historical
facts
are forward-looking statements that involve various risks and
uncertainty affecting the business of TAG. Such statements can
be
generally, but not always, identified by words such as
"expects",
"plans", "anticipates", "intends", "estimates", "forecasts",
"schedules", "prepares", "potential" and similar expressions, or
that
events or conditions "will", "would", "may", "could" or "should"
occur.
All estimates and statements that describe the Company's
objectives,
goals or future plans are forward-looking statements under
applicable
securities laws and necessarily involve risks and uncertainties
including, without limitation: risks associated with oil and
gas
exploration, development, exploitation, production, marketing
and
transportation, undiscovered original oil in place, availability
of
adequate funding, volatility of commodity prices, imprecision
of
reserve estimates, environmental risks, competition from other
producers, and changes in the regulatory and taxation
environment.
Actual results may vary materially from the information provided
in
this release, and there is no representation by TAG that the
actual
results realized in the future will be the same in whole or in part
as
those presented herein.
Other factors that could cause actual results to differ from
those
contained in the forward-looking statements are also set forth
in
filings that TAG and its independent evaluator have made,
including
TAG's most recently filed reports in Canada under National Instrument
51-101, which can be found under TAG's SEDAR profile at
www.sedar.com. TAG undertakes no obligation, except as otherwise
required by law, to
update these forward-looking statements in the event that
management's
beliefs, estimates or opinions, or other factors change.
SOURCE TAG Oil Ltd.