TAG Oil and Austral Pacific Acquire More Onshore Taranaki Assets

TAG Oil and Austral Pacific Energy have jointly acquired the onshore Taranaki assets of Australian company Tap Oil.

TAG Oil announced that it had made the acquisition in a 50/50 joint venture with Austral Pacific.

TAG said this would add strategic new acreage in six additional onshore permits and further increase its working interest in three existing permits. TAG has an interest in five other onshore Taranaki permits. All new acquisitions are exploration permits with the exception of PMP 38153, the Kahili Mining Permit. TAG plans a new well at Kahili later this year. The Kahili-1 discovery well initially flowed significant quantities of gas has since stopped producing and is currently shut in. Newly acquired seismic has led to an updip location planned for the new well.

Drilling and completion inventory was also acquired by the joint venture.

Drew Cadenhead, CEO of TAG Oil said: "The acreage acquired from Tap is contiguous with our existing focus in the production fairway of onshore Taranaki. We're happy to increase our interest in existing projects like our SuppleJack gas/condensate project. Since Christmas, we have more than doubled our net acreage in this key area.”

"We are at a much higher working interest in our 3-D seismically defined Waitoriki deep gas prospect scheduled to be drilled later this year, and we've added a number of new deep gas prospects.

Perth-based Tap Oil said the terms of the sale of its onshore Taranaki permit interests to the TAG-Austral Pacific joint venture were effective from 1 January 2006. Tap's onshore Taranaki interests, comprised PEP 38736, 38741, 38744, 38745, 38746, 38748, 38765 and 38766 and PMP 38153 (Kahili) and associated drilling materials.

At completion of the sale process, which is subject to Ministerial approval, Tap will receive consideration comprising an overriding royalty interest in the permits and around $2.5 million cash.

TAG is an independent Calgary-based company while the Wellington-based Austral Pacific has substantial Canadian shareholding. Both companies are listed on the Toronto Venture Exchange, while Austral Pacific is also listed on the New Zealand Stock Exchange.

Tap managing director Paul Underwood said Tap retains very prospective offshore permit interests in the Taranaki, East Coast and Canterbury Basins and will continue exploring in these areas.

Mr Cadenhead said a new seismic survey was recently acquired in the offshore East Coast permits, and preparations are advanced for the drilling of the Cutter-1 well in the offshore Canterbury Basin in the third quarter of 2006 using the Ocean Patriot semi-submersible rig.