VANCOUVER, July 4 /PRNewswire-FirstCall/ -- TAG Oil Ltd. (TSX-V: TAO/ OTCBB: TAGOF), announces that the drilling of the Cheal A6 well reached a total depth of 1930 meters on June 26th, 2008. The well intercepted an oil bearing MM3 Formation as planned at approximately 1818 meters measured depth, but the net sand interval was interpreted as thinner than prognosed and would be uneconomic to complete.
The Cheal Joint Venture (Austral Pacific Energy Ltd. 69.5% and TAG Oil Ltd. 30.5%) agreed to plug and abandon the MM3 zone in this well bore, set a whipstock plug at 1359 meters and kick off a side track well to a targeted location approximately 150 meters to the south of the original A6 penetration. This location was interpreted from the Brecon 3-D seismic data set to have thicker net sands, although slightly closer to the regional oil/water contact. Cheal A6ST was drilled to a total depth of 1936 meters on July 2nd, 2008 and intercepted the targeted MM3 sands as prognosed, well above the regional oil/water contact. After evaluation of all subsurface data the Joint Venture has agreed to plug and abandon the A6ST well as a sub-commercial hydrocarbon discovery. A new whipstock plug will be set in the wellbore and the rig will now commence drilling the Cheal A7 well from the same surface location. The Cheal A6 and A6ST wells were targeting a separate lobe of sand from the main Cheal "A" Pool while Cheal A7 is a step-out well targeting an extension of the same pool containing the successful Cheal A3 and A4 wells.
Garth Johnson, TAG Oil Chief Executive Officer said, "Although we are encouraged that we encountered oil bearing sands in Cheal A6 and A6ST, we were disappointed that net pay thicknesses in this separate lobe of sand were materially thinner than the "A" Pool and that completion operations were not justified. We look forward to better results at Cheal A7 where we are targeting the same Mt. Messenger sand body as the A3 and A4 wells."
About TAG Oil
TAG Oil Ltd. is a new oil and gas producer in the Taranaki Basin, New Zealand. TAG is well funded, debt free and is poised to grow through production, development and exploration drilling on the Company's high-graded Taranaki exploration acreage.
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 Oil. Actual results may vary materially from the information provided in this release. As a result 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. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ from those contained in the forward-looking statements, are set forth in, but are not limited to, filings that the Company and its independent evaluator have made, including the Company's most recent reports in Canada under National Instrument 51-102 and in the United States under Forms 20-F and 6K.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
CONTACT: Garth Johnson, CEO, (604) 609-3350, Website: http://www.tagoil.com/
