Tag starts next phase in Taranaki oil project

Canadian-listed petroleum company Tag Oil Ltd says it is starting the next phase of its efforts to boost gas and oil production from its Taranaki permits.

The company wants to boost its oil and gas revenue from the Taranaki Basin, where it is currently producing 420 barrels of oil and 400 million cubic feet of gas daily from its wholly owned Cheal field.

In May, the company said it had completed its first fracture stimulation to crack rock deep underground to allow oil and gas to flow faster at Cheal.

The hydraulic fracturing - known as "fracking" - was used to break up rock deep in the Mt Messenger formation, and it boosted boost daily production rates by 365 percent by opening paths through the rock..

On Wednesday next week, Tag Oil is scheduled to spud in its Sidewinder-1 exploration well in the Broadside exploration permit PEP 38748. The well will be aimed at drilling 1457m over 10 "drilling days" to test one of several prospects identified with 3D seismic surveys.

The Sidewinder-1 well will also target the Mt Messenger Formation which underpins the Ngatoro and Kaimiro oil and gas fields.

The rig will later move to the Cheal production permit PMP 38156-S to start work on the Cheal-BH-1 "horizontal well" - with a 600m horizontal section in its total depth of 2325m - in the Cheal A block. It will target deposits in the Mt Messenger Formation which geologists think were created when sediment was covered by massive underwater slips at an ancient river delta, possibly triggered by an earthquake.

This horizontal hole will be treated with multi-stage fracking using in New Zealand - for the first time - technology proven in North America.

Simultaneously, a service rig will begin improving two other wells in the Cheal mining permit, and Cheal B-3 will receive a fracking treatment, followed by installation of additional recovery technology

- NZPA