VANCOUVER, June 2, 2011 /CNW/ - TAG Oil Ltd. (TSX-V: TAO) and (OTCQX: TAOIF) is pleased to report that the initial flow test of the Sidewinder-3 discovery well is now complete. The Sidewinder-3 well is located in TAG Oil's 100% controlled Petroleum Exploration Permit 38748 in the Taranaki Basin, New Zealand, where TAG has now drilled four successful discovery wells to date.
Located 1.1 km to the south of the Sidewinder-1 discovery, the Sidewinder-3 well was drilled to a total depth of 2,160 meters (7,085 feet), encountering 15.4 meters (50 feet) of net gas-bearing sandstones. With the four wells drilled to date, the interpreted total hydrocarbon column at Sidewinder exceeds 60 meters (196 feet) in thickness, with no water column evident in any of the Sidewinder wells.
A 4-Point Isochronal test on the Sidewinder-3 discovery well achieved a stabilized flow rate of 7.2 million cubic feet per day (1200 BOE per day) with less than a 50% drawdown. These results are consistent with the Sidewinder-1 well flow test, which achieved stabilized flow rates of 8.5 million cubic feet of gas plus 44 barrels of oil per day (1461 BOE per day) from 14m (46 feet) of net pay encountered.
Further reservoir engineering analysis of the 4-point Isochronal test for the Sidewinder-1 well, calculated the absolute open flow rate to be 30 million cubic feet of gas per day or 5000 barrels of oil equivalent per day. A similar analysis will be completed on Sidewinder-3 once the down hole gauges are retrieved in approximately two weeks.
"The strong flow rates we are achieving in the Sidewinder wells support our decisions to expand the through put capabilities as well as fast-tracking the construction of the new production facilities. As a result, we are on-track to produce the first oil and gas from the Sidewinder discoveries by August 2011." Garth Johnson, TAG Oil CEO commented. "Our Sidewinder acreage is proving to be a very exciting and prolific discovery area that we believe can provide TAG with substantial near-term production increases, as well as significant reserve growth. We also look forward to flow testing the recent Sidewinder-2 and Sidewinder-4 discoveries, and continuing our pursuit of the many high-impact exploration opportunities TAG has identified on 3D seismic permit-wide."
TAG also reports that the service rig has now been moved onto the Sidewinder-4 discovery well for flow testing. The Sidewinder-4 penetration is approximately 1 km to the east of the Sidewinder-1 well and encountered 19 meters (62 feet) of net oil-and-gas bearing sandstones. Once the Sidewinder-4 flow test is complete, the service-rig will move to the Sidewinder-2 well, which encountered 47 meters (154 feet) of net oil-and-gas bearing sandstones to the west of Sidewinder-1 well.
For more information on TAG Oil's Sidewinder Discovery please visit: http://www.tagoil.com/20110506-Fifth%20Exploration%20Discovery-Sidewinder-4.asp
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% control over all its core assets, including oil and gas production infrastructure, TAG is anticipating 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 2,712 sections of land in the onshore Taranaki and East Coast Basins of New Zealand's North Island.
In the East Coast Basin, TAG Oil is pursuing the significant unconventional resource potential estimated in the fractured shale source-rock formations that are widespread over the Company's acreage. These oil-rich, naturally fractured and thermally mature source-rock formations have many similarities to North America's Bakken Shale source-rock formation in the successful Williston Basin.
"BOE"s 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. All estimates and statements that describe the Company's objectives, goals, or future plans, including the drilling plans and flow testing related to the exploration, testing and development of TAG Oil's Sidewinder-1, Sidewinder-2, Sidewinder-3 and Sidewinder-4 light oil and gas discoveries in the Taranaki Basin of New Zealand 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. Consequently, the Company's actual results may vary materially from the information provided in this release and there is no representation by TAG Oil that actual results realized in the future would be the same in whole or in part as those presented herein.
Additional risk factors and uncertainties that could cause actual results to differ from those contained in the forward-looking statements are set forth in, but are not limited to, filings that the Company and its independent evaluator have made, including the Company's Annual Information Form and its most recent reports in Canada under National Instrument 51-101.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
