CANADA-based TAG Oil has acquired the 70 per cent stake in the Puka permit for NZ$250,000 from the liquidators of Kea Petroleum Limited.

Also known as petroleum exploration permit 51153, the Puka permit is located onshore in the Taranaki basin, to the east of TAG’s Cheal field, which is currently producing.

The acquisition and transfer of operatorship has been approved by New Zealand Petroleum and Minerals and all other conditions precedent to the deal have been satisfied.

TAG chief executive Toby Pierce said the permit was a complementary addition to the company’s Taranaki basin portfolio with proven production and several exploration targets identified.

“We are very pleased to have completed the opportunistic acquisition of the Puka permit at such competitive terms,” he said.

MEO Australia chief executive Peter Stickland welcomed TAG’s investment, saying the company was a low cost operator with extensive technical and operations experience in the Taranaki basin.

“Having an operator with TAG’s established local footprint offers the potential for significant operational synergies, helping to ensure that the hydrocarbon potential of the permit can be unlocked in an efficient and cost effective manner,” he said.

“In addition, the revisions to the minimum work program provide the PEP 51153 joint venture with the necessary flexibility to design and implement the optimal work program to assess the hydrocarbon potential of the permit.”

Under a newly approved work program, the companies must acquire, process and interpret a minimum of 28.5 kilometres of gravity data across the permit by 23 March 2017.

They must also drill a new well by 23 February 2018, or surrender it to New Zealand authorities, MEO Australia said.

In an announcement, TAG said it would meet with MEO Australia, which holds the remaining 30% stake in the permit, to discuss the work program for the permit for the remainder of 2016.

“It is anticipated that TAG’s portion of the fiscal 2017 work program on the Puka permit will be approximately NZ$75,000 and focus on the collection of gravity data and seismic interpretation,” TAG said in an announcement.

Three wells have been drilled on the permit since the Puka oilfield was discovered in 2012, with the Puka 1 and Puka 2 wells producing 100 barrels of oil per day from the Mt.

Messenger formation before being shut in due to low oil prices and mechanical issues.