Tag Oil likely to have two rigs drilling next year
Tag Oil looks set to have two rigs simultaneously drilling wells in central and south Taranaki next year as a result of it being the big winner in the latest round of petroleum exploration block offers.
Canada-headquartered Tag has been awarded four new exploration permits in onshore Taranaki - one of them wholly owned, and three of them in a joint venture partnership with fellow Canadian company East West Petroleum.
All of the new licence areas surround Tag's Cheal oil and gas field in and around Ngaere, which means it will be simple to connect any future discoveries to existing production facilities and pipelines.
Among conditions attached to the Government's awarding of the new licences are a requirement to commit to exploration drilling almost right away.
This means it is likely Tag will now work to secure a second rig for this drilling, leaving an existing rig to continue its drilling operations in the Cheal field.
At the same time the company is now spending $30 million expanding and upgrading its infrastructure in central Taranaki.
This includes laying a new gas pipeline that will connect all its wellsites to the main Kapuni gas line, thus removing any need to flare gas as a part of the production of crude oil.
In a statement yesterday, Tag chief executive Garth Johnson said the additional exploration acreage will complement the company's current Taranaki operations.
"Our new oil and gas production facility expansion and associated pipelines in the area will unencumber all production, transportation and marketing of Tag's oil and gas, including any new discoveries from the newly awarded lands."
Meanwhile, fellow explorer New Zealand Energy Corporation is confident of drilling success in a new onshore exploration licence area it has just been awarded.
The block, which extends to the coast, sits adjacent to the Kapuni gas field.
NZEC won the bid for the licence in a 60/40 joint venture with New Zealand Oil and Gas, which holds interests in the Kupe and Tui offshore gas and oil fields and which will contribute technical expertise.
"With the Kapuni field and numerous oil fields to the east, and a number of large oil and gas fields offshore to the west, there is a high level of assurance that petroleum is actively migrating through this block, yet there has been little ex-ploration in the area," NZEC said.
It added the joint venture will now acquire new seismic information, and reprocess existing information, before making a drilling decision.
Taranaki Daily News