By Neil Ritchie
CANADA-listed junior TAG Oil continues its aggressive exploration and development campaigns on both sides of the North Island of New Zealand this month.
TAG shifted Webster Drilling’s Nova-1 rig across the North Island during July – from the west to the east coast – after successfully drilling the Cheal-B9 and 10 in-fill wells in central Taranaki that are scheduled to be production tested over the next few weeks.
The company expects the Nova rig to spud the Waitangi Valley-1 well in lease PEP 38348 north of Gisborne, about mid-August.
The well is scheduled to take up to two months to reach the anticipated total depth of about 3,600 metres, being the first deep well in the northern onshore part of the East Coast basin and targeting the naturally fractured Waipawa Black Shale and Whangai source rock formations.
Once Waitangi Valley-1 has been drilled, TAG will bring the Nova rig back to Taranaki to drill three wells, all from the new Cheal E wellsite in mining lease PML 38156.
One well, Cheal E-JV6, will be directionally drilled into neighbouring PEP 54877, which TAG holds with Canadian partner East West Petroleum. Two further totally TAG wells will follow from the Cheal E site.
The Nova-1 rig will then head back to the East Coast to drill another commitment well, Boar Hill-1 in PEP 38349, which will be the second well in the lease following on from Ngapaeruru-1, which was drilled east of Dannevirke during April last year.
The Nova rig will then cross the North Island once again, to drill the Sidewinder-B1 and 2 wells from the new Sidewinder B wellsite in northern Taranaki.
TAG had a record-breaking 2013-2014 financial year, with a 34 per cent increase in after-tax income to C$8.2 million compared with the 2013 financial year.
The company had achieved 20% increase in oil and gas revenue to C$61.5 million compared with 2013.
Average gross daily production increased by 15% to 2,027 barrels of oil equivalent per day (boepd), with a three per cent increase in pricing.
Revenue from gas sales increased 38% to C$8.2 million due to the C$30 million expansion of Cheal field production facilities, completed during 2013, which has allowed the company to process and sell gas that was previously f lared. The company reported C$59.7 million in working capital at the year of the financial year, with no debt.
Another Canadian listed junior, New Zealand Energy Corporation (NZEC), is making slow but steady progress bringing some of its onshore Taranaki wells into production but the increased flows still only marginally effect total production.
NZEC has now got 12 wells in production – four in its exploration lease PEP 51150 (Eltham), and has brought back into production eight previously disused wells in the Tariki, Waihapa and Ngaere (TWN) licences that it and L&M Energy purchased, along with the Waihapa production station and other infrastructure, from Origin Energy last year.
Total production, net to NZEC, is now up from about 201 barrels of oil per day (bopd) in May to about 231 bopd from the TWN, Copper Moki and Toko wells.
NZEC has also engaged international petroleum consultant David Hoke to help the company with reservoir management, production optimisation and new field exploitation.
“The Copper Moki wells are going pretty well but the trouble with the TWN wells seems to be getting continuous production instead of just cyclical production,” one commentator told Oil & Gas Australia recently
“So the panic of earlier this year has gone; their situation is slightly better but they are still unable to fund any major new projects because of their poor financial situation.”
Meanwhile, London listed junior Mosman Resources has now finished its second onshore West Coast well, Crestal-1, drilling to a depth of 251 metres, running logs and cementing casing in both the Eight Mile Formation and the Cobden Limestones. Flow testing is planned for later this year.
Following on from these latest results, the Crestal-2 well is now being redesigned as an appraisal well, with an anticipated spud date during September.
Mosman had some oil shows with its first well, Cross Roads-1, about 40km from Greymouth. The former operator of the Kotuku permit, New Zealand listed Aorere Resources, has a 13.1% interest in Mosman, which will dilute to 12.3% if Mosman successfully acquires Australian junior explorer Trident Energy for US$1.6 million in shares along with a cash loan.
But Kiwi commentators are not yet celebrating Mosman’s good news. “Mosman drilled straight into the Kotuku oil seep so there’s a long way still to go yet before any discoveries can be deemed commercial, “one told Oil & Gas Australia recently.
Finally, also on the West Coast near Greymouth, the Gloriavale Christian Community, through its company Ocean Harvest International, has imported a purpose-built onshore rig from South Korea and is planning to drill another shallow oil well this spring to follow up on the Niagara-3 well it drilled several years ago but that was close to the oil-water contact and so could not be brought into production.