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TAG encouraged by Waitangi Hill-2 gas and oil signs on East Coast
16 April 2010 - TAG Oil Ltd has experienced a strong ‘oil-wet’ gas kick and found ‘free oil’ in core samples of its Waitangi-2 stratigraphic well in its onshore northern East Coast Basin permit.
Source: Lindsay Clark
The shallow stratigraphic well, drilled to a total depth of 171 m, indicates the Waitangi Hill north of Gisborne is an area of active oil and gas generation and expulsion. The well is the first in TAG's initial three-well Waitangi Hill programme.
TAG is pursuing both conventional and unconventional fractured oil shale prospects in the permit area.
The objective of the Waitangi Hill stratigraphic wells is to begin collecting the modern data needed to appraise a conventional development of the shallow oil discovery.
TAG Oil says its more important aim is to further assess the viability of the underlying Waipawa black shale and Whangai shale source rock formations as unconventional targets.
TAG Oil chief executive officer Garth Johnson said, "We are extremely encouraged by the positive results of this well, which has now proven the Waitangi Hill area has an active light oil and gas generating system in place.”
“It has further de-risked and validated the prospectivity and significant potential of the underlying unconventional fractured oil shale play."
The Waitangi Hill-2 well experienced the gas kick along with significant pressure at 149 m. Drilling then continued to 171 m, where a conventional sandstone reservoir was encountered and core was retrieved that exhibited streaming ‘free oil.’
Considering the significantly pressured "oil-wet" gas kick encountered and the core confirmation of light gravity oil generation, the well was suspended at 179 m for safety reasons.
Gas, oil and core samples have been sent to labs for further analysis prior to planning the next two Waitangi Hill wells, which will use equipment more capable of handling these anomalously pressured shallow oil and gas zones.
"At each stage of exploration thus far, we have continued to confirm the key attributes that support a significant unconventional oil-shale play within the Waipawa Black Shale and Whangai Shale source rocks," Mr. Johnson said.
TAG Oil intends to exploit the potential undiscovered resources that have been demonstrated in the shale source-rocks, using technologies commonplace in North America but not yet employed in New Zealand.
TAG Oil is a Canadian-based company with operations in New Zealand including a 100% interest in the Cheal oil and gas field in Taranaki.
Related links
East Coast Basin - Online Technical Data - Register for update 2010 NZ petroleum Conference
