Tag Oil acquires permit in New Zealand's Taranaki basin
Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Sept. 30 -- Tag Oil Ltd., Vancouver, BC, said it has acquired 100% interest in petroleum mining permit (PMP) 38156-D, which contains the Cardiff gas-condensate discoveries in the onshore Taranaki basin in New Zealand.
Tag said the acquisition was obtained from the receivers and liquidators of the previous operator of PMP 38156-D, and its joint-venture partner, the New Zealand state-owned utility.
“The Cardiff structure has been identified as a large anticlinal trap, some 12 km long by 3 km wide, with a number of potential pay zones within the Kapuni Sands formation,” Tag said, adding, “The Cardiff gas-condensate discovery has the potential to become a substantial onshore resource.”
Tag said the permit is situated on trend and among several sizable deep gas-condensate discoveries in the Taranaki basin, including nearby landmark Kapuni field, New Zealand’s first major onshore discovery, and the prolific Mangahewa and Pohokura gas fields.
Gas with rich condensates was discovered at Cardiff within the upper Kapuni zone, which encountered 12 m of net pay and flowed at more than 3 MMcfd of gas and 100 b/d of condensate with improving rates observed on long-term testing.
“This zone can be identified on 3D seismic to be a prospective target across the span of the Cardiff structure,” Tag said, adding, “Even greater resource potential exists in the deeper K1A and K3E zones, where strong gas shows were encountered over a gross 600-m interval.”
Access to market for Cardiff gas is relatively straightforward, being situated just 3 km from a tie-in to Tag-owned gas systems, which provides a link to the high-capacity LTS gas pipeline and New Zealand’s thriving North Island gas market.
“This acquisition comes at a time of strong demand, tightening supply and record-high contract gas prices in New Zealand, providing a number of commercial opportunities for developing Cardiff gas,” Tag said.
The firm said it plans to recommence development of Cardiff targeting the various gas-condensate zones with rapidly advancing horizontal-drilling and multistage fracturing technologies developed specifically for these types of tight sand gas reservoirs.
Earlier this year Tag said it improved oil and gas production from the Cheal-A7 well more than 3½ times to 292 boe/d by administering a 17-ton frac job on the Miocene Mount Messenger formation (OGJ Online, May 13, 2010).
Contact Eric Watkins at [email protected].