Tag Oil profit sharply higher
Rapidly growing Canadian-based Tag Oil has posted record production levels in New Zealand and a big jump in profits as it gears up for a C$60 million spending program.
Tag's oil and gas revenues in the financial year were up 29 per cent to C$57.6 million (NZ$62m).
Pre-tax profit almost tripled to C$14.7m, mainly driven by the big rise in oil production, with after tax profits of C$7.6m.
Tag operates the onshore Cheal, Cardiff and Sidewinder oil and gas fields in Taranaki. It aims to drill at least two wells on the East Coast soon, and is a partner in a joint venture planning to drill in shallow water off the south Taranaki coast.
Its revenues are now about half as big as NZX listed company New Zealand Oil & Gas.
Tag is moving from a junior oil and gas explorer to one of the busiest explorers and producers of oil and gas in New Zealand, the company says.
It estimates cashflows for the current financial year to be about C$40 million, with average daily production equal to about 2000 barrels of oil.
The company posted record volumes of 681,615 barrels of oil or the equivalent, for the March year.
Tag chief executive Garth Johnson said the company was proud of its successful year, with record cashflow from producing assets in Taranaki and a new oil discovery and development area at Greater Cheal field in Taranaki.
A total of ten step-out wells were drilled in the Greater Cheal permits in the 2014 financial year and into the current year.
Production from the new wells started in November last year and the wells had so far produced about 120,000 barrels of oil. In the first quarter of the 2015 financial year, the new wells produced about 600 barrels a day, as well as gas.
The coming year's C$60m capital spending plan included low risk development drilling to maintain and lift existing production levels. The company also planned to carry out "high impact" exploration drilling to capture new oil and gas reserves, in deep wells, offshore in the Taranaki Basin and in fractured source rock prospects on the East Coast.
The company plans six more development wells in the proved Cheal field, as well as the newly discovered Greater Cheal area.
Meanwhile, Tag Oil has just hired Max Murray as its New Zealand country manager, based in New Plymouth, to replace Randy Toone who has resigned to return to Canada. Murray has joined Tag from Origin Energy.