TAG Oil Ltd, through its subsidiary company TAG Oil (NZ) Ltd, is offering up to 40% interest in the exploration permit PEP 51153, located in the Taranaki Basin. TAG currently operates the permit with 70% interest along with joint venture partner Melbana Energy. Melbana will maintain its position with 30% interest in the permit, but was open to offers to reduce its funding requirements prior to drilling a planned exploration well. The joint venture had already agreed to drill the Pukatea Prospect in the case of not attracting a partner in time. The well was completed in February 2018.  The Pukatea 1 deviated oil exploration well spudded on 24 January 2018. On 26 February 2018 TAG reported that the well had reached a total depth of 3,100 m having failed to encounter the Tikorangi Limestone primary target, instead intersecting a thickened interval of basement rock. However, the well flowed fluids at a rate of 600 b/d during clean-up operations following the perforation of a 12.9 m interval of the secondary target Miocene Mount Messenger Formation.Â  The well demonstrated a stabilised flow rate of approximately 276 boe/d (74% oil) on a 24/64â choke during a 12-hour test. Testing subsequently continued using differing choke sizes, with all recovered oil being sold to the market at Brent pricing.  TAG had until 23 February 2018 to drill the Pukatea 1 exploration well, which was estimated to cost USD 7.5 million. TAG was seeking to farm out around 40% to an interested party to share the costs in drilling and acquiring gravity data within the permit area. However, the well was drilled on schedule after Melbana provided full joint venture approval.    PEP 51153 was awarded on 23 September 2008 to Kea Petroleum. Since, the area has been reduced by 60% to focus more on the two discoveries: Wingrove and Puka, and the Pukatea Prospect which lies updip from the Douglas 1 well and around 1,000 m below the Puka 1 discovery well. TAG entered the permit in 2016 by acquiring Kea Petroleumâs complete interest. After Kea entered liquidation, Melbana (then MEO) had pre-emptive rights over the interest but opted not to increase its holding. The permit is scheduled to expire on 23 September 2018.    Pukatea (previously known as the Shannon Prospect), is an Oligocene play prospect adjacent to the Taranaki Fault. The trap is considered to be a plunging compressional fold at the leading edge of the fault caused by graben inversion.Â  Melbana reports that, pre-drill, the joint venture calculated the prospective resources attributable to the prospect to range from 1.07 to 34.33 MMboe, with a best case of 12.4 MMboe. The potential reservoir was considered conventional and lies directly below the Puka 1 well which made an oil discovery in 2012 in the Mt. Messenger Formation. The target was also updip from the Douglas 1 well (located in the north of the Wingrove field), which recorded oil shows within 145 m of the reservoir interval, within the Tikorangi section. Drilling was terminated at around 3,000 m depth after large fractures were encountered resulting in lost circulation.    Pukatea was planned to be drilled to approximately 2,400 mTVD in the Tikorangi Limestone within a 4-way dip closure. TAG considered the main risks to be the fractured nature of the reservoir (as found in Douglas 1) and an effective seal. The geological chance of success was set at 19%. Pukatea 1 was drilled from the existing Puka production pad to minimize costs and provide a vertical path to target. In the case of success, a number of low development opportunities and routes to market exist from existing infrastructure, including the TAG operated Cheal production complex.     TAG Oil is seeking for a second partner to join in the exploration programme for PEP 51153. Joint venture partner could also be interested in divesting its interest providing an attractive offer. Participants in the permit are: TAG Oil (NZ) Ltd (70% + operator) and MEO New Zealand Pty Ltd, a Melbana Energy subsidiary (30%).
New Zealand (Eastern Taranaki Mobile Belt (Taranaki B.)) Puka 1