East West Petroleum Ltd. and TAG Oil Ltd. have formed a joint venture to drill four wells on three petroleum exploration permits in New Zealand’s Taranaki basin.
PEP 54876, 54877, and 54879, awarded to TAG Oil, add at least 10 shallow, low-risk drilling prospects and numerous leads identified on 3D seismic near Cheal oil field.
TAG Oil was also awarded a 100% interest in PEP 54873, which contains several shallow drilling leads and exploration upside via a drill-ready deep gas-condensate prospect that has similar geological features to adjacent 1.3 tcf Kapuni gas-condensate field. The four permits total 37,253 gross acres in the main Taranaki oil and gas fairway.
TAG Oil will operate the other three permits. East West will fund four wells on PEP 54876, 54877, and 54879 in 2013 to earn a 50% interest in PEP 54876 and PEP 54879 and a 30% interest in PEP 54877.
Meanwhile, TAG Oil said the Cheal-B8 well has reached a total depth of 3,600 m and encountered 26 m of high-quality oil and gas pay in the initial 2,000 m of the well. The company will perforate and production-test the well.
The company deepened the well 1,600 m to test a wildcat target in the Tikorangi formation, but electric logs did not indicate sufficient pay at that depth. TAG Oil noted that this result has no effect on the potential in the deeper Kapuni formation, a well established, commercially proven play level in numerous major fields discovered in the basin.