TAG Oil Cases Radnor-1A and Files First Quarter Results
29 August 2006 - 8:03AM
PR Newswire (US)
Sidetrack Well Indicates Gas and Moves to the Next Phase VANCOUVER,
Aug. 28 /PRNewswire-FirstCall/ -- Independent Canadian oil and gas
exploration company TAG Oil Ltd. (TSX-V: TAO and OTCBB: TAGOF)
announced that the Radnor-1A exploration well located in PMP 38157
(TAG 33.33%, operator) New Zealand, has reached a total depth of
4395m (14,420'). After evaluating indicators in the wireline logs,
production casing will be run and a program of completion testing
will be initiated. President Drew Cadenhead commented, "Our initial
interpretation indicates approximately 16m of gross gas/condensate
pay in the McKee sand interval. The top of our zone is 31m (100')
updip from the interpreted gas-water contact at the offsetting
Stratford-1 well, which produced gas and condensate before watering
out." Radnor-1A is a sidetrack operation, re-entering the original
Radnor-1 wellbore. A whipstock plug was set in the original
wellbore at a depth of 3129m (10,265'). A new Radnor-1A side track
well bore was then directionally drilled to a total measured depth
of 4395m (14,420'), approximately 487m (1,600') to the southwest of
the Radnor-1 downhole location. Newly acquired 3-D seismic has been
utilized to target a new location across a fault from Radnor-1 and
updip of another nearby well, Stratford-1, both of which produced
gas and condensate before watering out. Says Cadenhead, "We're
optimistic that the electric log indicators will yield results.
With an idle gas production facility on site already, we plan to
conduct a short clean-up test to the flare pit. If we are happy
with the test results, we'll shut the well in for a pressure
build-up and hook the well up to the production facility."
Participants in the sidetrack operation are the Company (33.33%)
and Bridge Petroleum Limited (33.33%) with TAG assuming, on a
sole-risk basis under the terms of the joint operating agreement
("JOA"), another 33.33% interest in the well. Under the sole-risk
provisions of the JOA, TAG is entitled to recover 1500% of the
costs associated with the sole-risk interest prior to any revenue
reverting back to the joint venture partner that did not
participate in the operation. To see an image of the original
Radnor-1 well, or to learn more about TAG Oil, please access the
company's website at http://www.tagoil.com/. TAG also announces the
filing of its first quarter 2007 financial statements along with
the accompanying Management's Discussion and Analysis. These
filings can be accessed electronically from the System for
Electronic Document Analysis and Retrieval ("SEDAR") website at
http://www.sedar.com/. TAG started the 2007 fiscal year with $18.74
million in cash and cash equivalents and ended the first quarter
with $27.9 million at June 30, 2006. Shareholders equity at June
30, 2006 was $57.97 million, compared to $27.03 million at March
31, 2006 resulting from a private placement that raised $28.15
million net of costs through the issuance of 40,000,000 shares. TAG
began the 2007 fiscal year with 46,631,081 shares outstanding, and
ended the first quarter with 91,631,081 shares, inclusive of
5,000,000 shares issued as part of the consideration for the
acquisition of its interest in the Cheal oil field as described in
the June 30, 2006 filing. The loss recorded for the first quarter
was $720,495 ($0.01 per share) with no production revenue. The loss
included interest income of $178,603 and $417,074 in foreign
exchange losses resulting from a decline in value of the Company's
cash held in U.S. dollars at June 30, 2006. With the acquisition of
a 30.5% interest in the Cheal oil field on June 16, 2006 and the
start of production from Cheal in July, TAG will be recording its
first production revenue in New Zealand in the second quarter of
the 2007 fiscal year with approximately 105 barrels of oil per day,
net to TAG, with an expectation that this will increase to 300
barrels per day as the Cheal Oil Field Development plan is carried
out over the coming months. About TAG Oil: TAG Oil Ltd. is an
independent Canadian oil and gas exploration company with a
well-balanced portfolio of assets in and around the Canterbury,
Taranaki and East Coast basins of New Zealand. This regional focus
supports the Company's mandate to explore in countries with low
political risk and low government taxation, through the
establishment of a portfolio of both high risk/high reward
exploration projects and low risk/moderate reward acreage in
producing basins. With exploration permits totaling 3,700,352 gross
acres (net 1,858,504). TAG Oil is one of the largest holders of
prospective acreage in New Zealand. TAG Oil trades on the TSX
Venture Exchange (TSX-V) with the ticker symbol TAO, and on the
OTCBB with the symbol TAGOF. More information is available on the
Company's website at: http://www.tagoil.com/. 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 Oil.
Actual results may vary materially from the information provided in
this release. As a result there is no representation by TAG Oil
that the proposed acquisition will be finalized or that actual
results realized in the future will be the same in whole or in part
as those presented herein. Actual results may differ materially
from the results predicted, and reported results should not be
considered as an indication of future performance. Factors that
could cause actual results to differ from those contained in the
forward-looking statements, other than those related specifically
to finalizing the proposed acquisition, are set forth in filings
that the Company has made, including the Company's most recent
reports in Canada under National Instrument 51-102 and in the
United States under Forms 20-F and 6K. The TSX Venture Exchange has
not reviewed and does not accept responsibility for the adequacy or
accuracy of this release. CONTACT: Garth Johnson, , (604) 609-3350
DATASOURCE: TAG Oil Ltd. CONTACT: Garth Johnson, , (604) 609-3350
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