Welcome!

Apache Authors: Gilad Parann-Nissany, ChandraShekar Dattatreya, Michael Meiner, MC Brown, Amy Lindberg

News Feed Item

TAG Oil Provides Second Quarter Results

Company achieves 62% increase in production revenue

New infrastructure build on track plus four new wells drilled with excellent results.

VANCOUVER, Nov. 15, 2012 /PRNewswire/ - TAG Oil Ltd. (TSX: TAO) and (OTCQX: TAOIF), today announced its financial results for the quarter ended September 2012.

Q2-2013 and Recent Operating Highlights

  • Production revenue increased 62% to $21.44 million for the six months ended September 30, 2012, compared to $13.23 million in the comparable period last year;
  • Production revenue increased to $9.62 million during Q2-2013 compared to $7.38 million for Q2-2012;
  • Net operating cash inflow increased to $5.81 million (six months: $14.98 million) for the quarter compared to $5.34 million (six months: $7.11) for Q2-2012;
  • TAG sold 68,178 (six months: 170,058) barrels of oil during quarter at an average price of $109.97 per barrel (six months: $108.41 per barrel);
  • TAG sold 80,592 boe (six months: 112,728 boe) of gas during the quarter at an average price of $4.38 per mcf (six months: $4.44 per mcf);
  • Infrastructure build ontrack to allow production of 3000 boe p/d of behind pipe production to come online;
  • Successfully drilled Cheal-A12, bringing the total to 19 straight successful wells in Taranaki;
  • Currently drilling Cheal-B8 with 26 meters of net pay being identified on electric logs to date;
  • Acquired three high-impact frontier exploration permits located in the East Coast and Canterbury Basins of New Zealand;
  • All work carried out to the highest health and safety and environmental standards.

Liquidity and Financial Summary

At the date of this report, TAG is debt free with approximately $86 million in cash on the balance sheet. Production revenue for the quarter was $9.62 million (six months: $21.44 million) compared to $7.38 million (six months: $13.23 million) for the comparable quarter last year and the Company generated a net profit for the quarter of $1.20 million (six months: $6.76 million) before deducting $1,499,954 (six months: $2,340,675) for non-cash share-based compensation.

TAG currently has 59,773,923 common shares outstanding and 63,481,186 common shares outstanding on a fully diluted basis.

Taranaki Basin Operations

TAG finished Q2-2013 with excellent drilling results, and an ongoing Taranaki program underway with electric logs indicating economic oil-and-gas pay in recent drilling as follows:

  • Cheal-C4 recorded a total of 17.5 meters of pay
  • Cheal-A11 recorded a total of 30 meters of pay
  • Cheal-A12 recorded a total of 23 meters of pay
  • Cheal-B8 recorded a total of 26 meters of pay to date with drilling continuing at the reporting date

Summary of TAG well status

Site Producing Behind pipe
Cheal A A10, A11 A1, A3, A7, A8, A9, A12
Cheal B BH-1, B3, B5 B1, B2, B4ST, B6, B7, B8
Cheal C   C1, C2, C3, C4*
Sidewinder SW1, SW2, SW3, SW4  

* Drilled and awaiting/undergoing production test

TAG has drilled 19 consecutive successful wells in Taranaki, which have necessitated the infrastructure upgrades now underway, and expected to be complete on schedule by March 31, 2013.

TAG's infrastructure project will allow the Company to become completely self-sufficient in producing, processing and marketing all oil and gas. Once completed, TAG can initiate production on all oil and gas wells that have been drilled but are not yet producing (behind pipe) and any additional production arising from further successful wells drilled.

Cheal Oil and Gas Field - 100% Interest

Successful drilling throughout 2011/2012 and now Q2-2013 within the Cheal field has resulted in a material increase to the Company's forecasts. TAG expects continued growth through the following activity:

  1. Continued exploration and development drilling: pre-emptive right on the Nova-1 drilling rig ensures access to services;

  2. Infrastructure enhancement project underway at Cheal ensures maximum value is achieved from behind-pipe production and new discoveries making TAG completely self-sufficient for oil and gas production, processing and marketing;

  3. Cheal's new planned pipeline now has all landowner agreements signed and consent has been received with construction now underway;

  4. Drilling the liquids-rich deep gas target such as Cardiff and Hellfire; Cardiff has an independent resource potential estimated by Sproule International of 214.5 Bcf and 12.8 million barrels of associated condensate and the Company anticipates drilling Cardiff in Q2 of fiscal 2014;

  5. Completion of Cheal's secondary recovery scheme, which is forecast to cost-effectively increase recovery factors within the Cheal A pool's proved and probable oil reserves.

Sidewinder Oil and Gas Field - 100% Interest

On June 6, 2012, TAG received consent to drill four new wells within the Sidewinder permit, which was subsequently appealed by one opposing party. Progress has been made and TAG expects the appeal to be dismissed and drilling operations to resume as planned.  A successful resolution is expected in Q3 of fiscal 2013.

TAG has planned a new multi-well drilling program using its proprietary 3D seismic, combined with new 2D seismic that was acquired during fiscal 2012. The Sidewinder Permit is lightly explored, where only 2.5% of TAG's acreage has been drilled to date. Significant exploration potential remain in both shallow and deeper targets within the Permit area. Near-term operations are as follows:

  1. Drill a minimum of four new exploration wells;

  2. Drill Sidewinder's deeper liquids-rich gas targets such as the Hellfire prospect where TAG's technical team has used 3D seismic to interpret Hellfire as a large high-impact prospect with significant resource potential.

East Coast Basin Operations

The farmout agreement with Apache Corp in Q1 2012 was completed to explore and potentially develop oil and natural gas resources in the East Coast Basin of New Zealand. Apache Corp has agreed to spend up to $100 million to conduct a multi-phased exploration, appraisal and potential development program within TAG's East Coast Basin Petroleum Exploration Permits PEP 38348, PEP 38349 and PEP 50940 (the "Permits").

TAG and Apache Corp have completed their 2D seismic program within the Permits and the TAG / Apache JV are continuing an extensive consultation process relating to the upcoming drilling of four vertical wells targeting the Whangai and Waipawa source rocks. During the quarter, construction and surface lease access consents were awarded. Upon receipt of the necessary drilling consents from district and regional councils being obtained in a timely manner, TAG and Apache anticipate well-site construction to begin in the first quarter of calendar 2013 followed shortly by drilling operations.

In addition to East Coast Basin permits noted above that form the TAG/Apache JV, TAG completed the acquisitions of a 100% interest in two additional permits during the quarter: PEP 53674 and PEP 52676.

Canterbury Basin Operations

During the quarter, TAG Oil also acquired a new frontier exploration permit ("PEP 52589") in the Canterbury Basin, situated both offshore and onshore in New Zealand. At the date of this report, TAG has initiated the acquisition of 80 km's of new 2D seismic over certain leads identified within the permit. The Canterbury Basin is an under-explored frontier area with many geological similarities to the productive Taranaki Basin.

Historical drilling results in Canterbury indicate good exploration potential with two gas/condensate discoveries drilled in the offshore portion of the Basin, one of which tested in excess of 10 million cubic feet of gas and 2,300 barrels of oil per day. Although these discoveries were uneconomical due to the high cost of offshore development, more importantly, the gas/condensate accumulations found in these wells confirm that generation, migration and entrapment of hydrocarbons occur in the basin, indicating additional accumulations are likely to be present.

Offshore drilling scheduled by majors such as Anadarko and Origin Energy in 2013/2014 allow TAG to focus initially onshore while holding considerable upside related to its control over the onshore and near shore acreage directly updip of the scheduled deep water offshore wells.

Capital Expenditure

Expenditures on the Company's oil and gas properties during Q2 of the 2013 fiscal year amounted to approximately $22.1 million, primarily invested in the Company's Taranaki operations for drilling, testing, workovers and infrastructure as follows:

Cheal Field          $18.6 million
Sidewinder Field          $1.5 million
East Coast, Taranaki Offshore, Canterbury          $2.0 million


The East Coast Joint Venture invested approximately $0.8 million during the quarter.

TAG Oil has filed its second quarter September 30, 2012, condensed consolidated unaudited interim financial statements and management discussion and analysis with the Canadian Securities Administrators. Copies of these documents can be obtained electronically at http://www.sedar.com, or for additional information please visit TAG Oil's website at http://www.tagoil.com/.

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 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 has entered into a farm-out agreement with Apache Corporation to explore and potentially develop 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.

TAG Oil has adopted the standard of six thousand cubic feet of gas to equal one barrel of oil when converting natural gas to "BOE's". BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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 Oil. Such statements can generally, but not always, be 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. These statements are based on certain factors and assumptions including;

A. all estimates and statements that describe the Company's objectives, goals, production rates, infrastructure capacity and or future plans relating to the seismic, testing, work over and drilling programs in Taranaki 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, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, and changes in the regulatory and taxation environment. These forward-looking statements are based on certain factors and assumptions, including factors and assumptions regarding the management's views on the oil and gas potential in the Permits, well performance, the success of any operations, completing infrastructure and the costs necessary to complete the operations; and

B. those relating to TAG Oil's exploration and development of its oil and gas properties within the Cheal and Sidewinder project areas, the production and establishment of additional production of oil and gas in accordance with TAG Oil's expectations at Cheal and Sidewinder, well performance, drilling the completion of new infrastructure at Cheal and Sidewinder, the increase of cash flow from new production, expected growth, results of operations, performance, prospects, evaluations and opportunities. While TAG Oil considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Actual results may vary materially from the information provided in this release, and there is no representation by TAG Oil that the actual results realized in the future will be the same in whole or in part as those presented herein.

TAG Oil is involved in the exploration for and production of hydrocarbons, and its property holdings with the exception of the Cheal and Sidewinder project areas are in the grass roots or primary exploration stage. Exploration for hydrocarbons is a speculative venture necessarily involving substantial risk. There is no certainty that the expenditures incurred on TAG Oil's exploration properties will result in discoveries of commercial quantities of hydrocarbons. TAG Oil's future success in exploiting and increasing its current reserve base will depend on TAG Oil's ability to develop its current properties and on its ability to discover and acquire properties or prospects that are producing. There is no assurance that TAG Oil's future exploration and development efforts will result in the discovery or development of additional commercial accumulations of oil and natural gas.

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.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.