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TAG acquires Kawakawa oil shale prospect in East Coast Basin
12 February 2010 - Canadian-based TAG Oil Ltd, which recently merged with Trans-Orient Petroleum Ltd, has extended its permit holdings to cover an anticline in northern Wairarapa with a potential formation of fractured oil shale up to 600 m thick.
Sources: TAG Oil and Lindsay Clark
TAG said it had been awarded a 250 sq km permit extension at the south of its large onshore East Coast Basin permit (PEP 38349) now covering 6,860 sq km from north of Napier to northern Wairarapa.
TAG said the extension includes the 8 km long Kawakawa anticline, a reverse fault structure at depth that has potentially "double stacked" both the Waipawa black shale and Whangai shale formations, effectively to a potential 600 m thick fractured oil shale formation.
Garth Johnson, TAG's chief executive officer said, "Kawakawa is an attractive new play area for TAG. Strong oil indications have been recorded in the immediate area from both outcrop and seeps and geochemical analysis.”
These indicated conclusively that this oil was generated either solely from Waipawa black shale or from a combination of Whangai shale and the Waipawa black shale formations.
"Kawakawa can be drilled at reasonable drilling costs due to the relatively shallow depths," Mr. Johnson said. The permit extension area lies south of Cape Turnagain.
TAG plans to complete additional geological and geochemical mapping over the area before adding Kawakawa-1 to the company's multi-well East Coast drilling campaign that includes Boar Hill-1 (also in PEP 38349) and Waitangi Hill-1 (PEP 38348) north of Gisborne, all targeting shale formations.
Mr Johnson said the Waipawa black shale has characteristics very similar to the hydrocarbon-yielding Bakken Formation in the Williston Basin (North America) and the Whangai Shale has many analogies to the Barnett shale in Texas.
The two East Coast shale formations are rich in organic content and naturally fractured. Core sampling has also shown porosities of 22% to 30%, well above what is typically found in the Bakken or Barnett shales.
TAG intends to use proven North American experience and technologies in New Zealand to exploit the shale resources, Mr. Johnson said.
TAG now holds 100% of the Cheal oil field in Taranaki.
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