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TAG sees blanket Urenui oil at Cheal, New Zealand

TAG Oil Ltd., Vancouver, BC, said it plans to place on production in the second half of 2012 three wells that have confirmed a commercial discovery of oil in the Urenui formation at 1,400 m on the 100% owned Cheal permit in the Taranaki basin of New Zealand.

The Cheal-B6, A9, and A10 wells individually are capable of initially producing 200 b/d of light oil with associated gas from high-quality reservoir sands, the company said. The wells are to be placed on sustained production after artificial lift capabilities are upgraded in the next 3 months.

Permit-wide 3D seismic interpretation, including data from preexisting wells that all intersected Urenui pay, indicates that the formation has been deposited as a blanket sand and is prospective for oil across the 7,500-acre PMP 38146 permit.

TAG Oil said it will integrate the Urenui oil play into its overall development and exploration strategy, which will also include the Mount Messenger formation and the deeper liquids-rich Kapuni formation gas.

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