By OGJ editors
HOUSTON, May 15 -- Tag Oil Ltd., Calgary, has signed an agreement to acquire three South Pacific Lease Operations Ltd. subsidiaries—Cheal Petroleum Ltd., PEP 38757 Ltd., and PEP 38758 Ltd.—for about $15.5 million in cash and stock.
Cheal Petroleum owns a 30.5% interest in New Zealand's Cheal oil field and an interest in the Cardiff Deep gas discovery. PEP 38757 and PEP 38758 hold 5% gross overriding royalties in PEPs 38757 and 38758, all in New Zealand's Taranaki basin.
During 2005 tests, Cheal field produced more than 90,000 bbl of oil, 37,000 bbl from the Cheal A3X well and 54,000 bbl from Cheal A4, both of which are ready to be brought on line.
Four other Cheal wells, the A5 and A6 development wells and the B1 and B2 exploration wells, are scheduled to be drilled later this year following a 3D seismic program.
The Cheal operator, Austral Pacific Energy (NZ) Ltd., has proposed a development plan that includes a 2,000 b/d production facility.
The Cheal-A3X and Cheal-A4 wells are currently capable of a combined output of 600 b/d.
Cheal has proved, probable, and possible reserves of 5,012,200 boe.
Tag Oil also will acquire Cheal's 15.1% interest in PEP 38738-Deep, covering 22,222 gross acres (3,355 net) and including the Cardiff Deep gas discovery.