TAG Oil Ltd
(PublicWire.com Press Release) — VANCOUVER, Nov. 14, 2013 – TAG Oil Ltd. (TSX: TAO) and (OTCQX: TAOIF), reports that the Company has filed its financial results with the Canadian Securities Administrators for the Company’s September 30, 2013 second quarter fiscal 2014 year. Copies of these documents can be obtained electronically at http://www.sedar.com, or for additional information please visit TAG Oil’s website at http://www.tagoil.com/.
TAG Oil Quarterly Highlights
At September 30, 2013, the Company had cash of $61.2 million, working capital of $62.9 million and no debt prior to closing a $25 million bought deal financing.
Production revenue increased to $30.58 million for six months and $15.89 million for the quarter.
Net income of $7.43 million was generated for six months and $2.97 million for the quarter, before the deduction of non-cash share-based compensation.
Daily average production for six months increased to 2,227 boe per day (51% oil) and 2,100 boe per day (58% oil) while realizing $113.30 per barrel of oil and $5.18 per mcf of gas for the quarter.
Continued step out drilling success in the Mt. Messenger/Urenui formations with the Cheal-E1, E2 and E3 wells substantially extending the known oil-saturated area of Cheal. Production testing is underway on Cheal-E1 and with E-2 and E3 ready to test. Cheal-E4 is currently drilling ahead at approximately 750m with a projected total depth of 2234m.
Cardiff-3 deep well has encountered strong mudlog shows of up to 85% total gas readings in the top sections of the Kapuni Formation. Currently drilling ahead at approximately 4,300 meters with the thickest target, the K3E zone expected at approximately 4700m.
Unconventional specialists from North America join TAG to initiate a widespread East Coast Basin drilling campaign, and to establish New Zealand’s first unconventional oil and gas production directly from the source rock.
Conference Call Information
TAG Oil will host a discussion of its Q2 2014 financial results and forward program on Thursday November 14, 2013 at 1:00 pm Pacific Time. Please call in ten minutes before the conference call starts and stay on the line (an operator will be available to assist you should you have questions of management during the call). In addition, questions can be forwarded by e-mail in advance to email@example.com.
Interested parties may access the conference call using the information below:
Date November 14, 2013
Time 1:00 pm Pacific Time
Toll-Free Dial-in # 1-866-318-8619
Secondary Dial-in # 1-617-399-5138
Conference Passcode 81930031
E-mail questions to: firstname.lastname@example.org
TAG Oil Ltd.
TAG Oil Ltd. (http://www.tagoil.com/) is a Canadian-based production and exploration company with operations focused exclusively in New Zealand. With 100% ownership over all its core assets, including extensive oil and gas production infrastructure, TAG is enjoying significant organic value creation through exploration success and ongoing development and appraisal drilling of several light oil and gas discoveries. As New Zealand’s leading explorer, TAG actively drills high-impact conventional and unconventional exploration prospects identified in the Taranaki Basin, East Coast Basin and Canterbury Basin that covers more than 2,669,780 net acres of land, prospective for major discovery in New Zealand.
The resource estimates in this news release were prepared with an effective date of July 31, 2013. The estimates for Cardiff have been externally prepared by Sproule International Limited and the remaining estimates were prepared internally by TAG professionals. Both Sproule and TAG professionals are qualified reserves evaluators in accordance with NI 51-101 and the Canadian Oil and Gas Evaluations Handbook.
TAG Oil has adopted the standard of six thousand cubic feet of gas to equal one barrel of oil when converting natural gas to “BOEs.” BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Undiscovered Petroleum Initially-In-Place (equivalent to undiscovered resources) is that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of undiscovered petroleum initially in place is referred to as “prospective resources,” the remainder as “unrecoverable.”
Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.
Exploration for hydrocarbons is a speculative venture necessarily involving substantial risk. TAG’s future success in exploiting and increasing its current reserve base will depend on its ability to develop its current properties and on its ability to discover and acquire properties or prospects that are capable of commercial production. However, there is no assurance that TAG’s future exploration and development efforts will result in the discovery or development of additional commercial accumulations of oil and natural gas. In addition, even if further hydrocarbons are discovered, the costs of extracting and delivering the hydrocarbons to market and variations in the market price may render uneconomic any discovered deposit. Geological conditions are variable and unpredictable. Even if production is commenced from a well, the quantity of hydrocarbons produced inevitably will decline over time, and production may be adversely affected or may have to be terminated altogether if TAG encounters unforeseen geological conditions. TAG is subject to uncertainties related to the proximity of any reserves that it may discover to pipelines and processing facilities. It expects that its operational costs will increase proportionally to the remoteness of, and any restrictions on access to, the properties on which any such reserves may be found. Adverse climatic conditions at such properties may also hinder TAG’s ability to carry on exploration or production activities continuously throughout any given year.
The significant positive factors that are relevant to the resource estimate are:
Proven production in close proximity;
Proven commercial quality reservoirs in close proximity; and
Oil and gas shows while drilling wells nearby.
The significant negative factors that are relevant to the resource estimate are:
Tectonically complex geology could compromise seal potential; and
Seismic attribute mapping in the two, deep, liquids’-rich gas plays can be indicative but not certain in identifying proven resource.
Cautionary Note Regarding Forward-Looking Statements:
Statements contained in this news release that are not historical facts are forward-looking statements that involve various risks and uncertainty affecting the business of TAG. Such statements can be generally, but not always, identified by words such as “expects”, “plans”, “anticipates”, “intends”, “estimates”, “forecasts”, “schedules”, “prepares”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. All estimates and statements that describe the Company’s objectives, goals, production rates, optimization, infrastructure capacity and or future plans with respect to the drilling in the Taranaki and East Coast Basins are forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties including, without limitation: risks associated with oil and gas exploration, development, exploitation and production, geological risks, marketing and transportation, the risk associated with estimating undiscovered original initially-in-place described above, availability of adequate funding, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, and changes in the regulatory and taxation environment. Actual results may vary materially from the information provided in this release, and there is no representation by TAG Oil that the actual results realized in the future will be the same in whole or in part as those presented herein.
Other factors that could cause actual results to differ from those contained in the forward-looking statements are also set forth in filings that TAG and its independent evaluator have made, including TAG’s most recently filed reports in Canada under NI 51-101, which can be found under TAG’s SEDAR profile at www.sedar.com. TAG undertakes no obligation, except as otherwise required by law, to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors change.
SOURCE TAG Oil Ltd.