TAG Oil Ltd has announced the successful drilling and flow testing of the Cheal-E8 exploration well in the onshore Taranaki Basin in New Zealand.

The well will now be tied-in to TAG Oil’s existing infrastructure in the area as a permanent producer.

The Cheal-E8 well was drilled on TAG Oil’s 70% working interest and operated Cheal East permit (PEP -54877). The well was drilled to a total measured depth of over 2,000m. The primary objective of Cheal-E8 was to test the potential of the Urenui formation, with the deeper Mt. Messenger formation as the secondary objective. Net pay of approximately 17m of Urenui sands and four metres of Mt. Messenger sands was recorded.

Following the completion of the Urenui zone, Cheal-E8 naturally free flowed oil and gas on choke at an average rate of 318 boe/d over a four and a half day test. No water production was observed during the test.

The Mt. Messenger formation is also estimated to be commercial by TAG, and will be completed in the future. The company’s next well will be Cheal-D1, which will also be drilled on the Cheal East permit. This is scheduled to spud in July 2017. Construction of the Cheal-D well pad is currently underway and is proceeding on schedule. The Cheal-D well pad is located near, and will be used to explore, the northern portion of the Cheal E permit.

Toby Pierce, TAG Oil’s CEO said the company was  very pleased with the results of its first exploration well at Cheal in almost three years.

“Over that time, TAG Oil has focused on reducing its commitments and stabilising production from its existing fields while we managed through the period of lower oil prices. With the recent $15 million raise completed in Q1 this year and stabilization of oil prices, we are now looking forward to growing aggressively through the drill bit with at least five exploration wells planned over the next 12 months.”