TAG Oil has received approval from the Gisborne District Council in New Zealand to drill the Waitangi Valley-1 well located in Petroleum Exploration Permit 38348 in the East Coast basin.
The Canada-based company said that earthwork activities have already started, with the building of an access road and drilling pad. Construction is anticipated to be completed with the drilling rig mobilised by the end of June.
TAG Oil plans to drill the Waitangi Valley-1 to a total depth of 3,600m, targeting the naturally fractured Waipawa Black Shale and Whangai source rock formations. It noted that the Waitangi Valley-1 well also has significant conventional discovery potential within various Miocene-aged formations in an area where oil has already been identified under convincing pressure.
The Waitangi-1 oil discovery in 1912 produced 50 degree API sweet light crude from an oil reservoir at a depth of about 300m.
Geotechnical work carried out on oil samples taken from the well confirmed that the oil kitchen is working.
The company said the well is still producing live oil to surface today, and nearby oil seeps and oil samples from the five shallow Waitangi Hill wells it drilled in 2011.
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By GlobalDataTAG Oil chief executive officer Garth Johnson said that the Waitangi Valley well is one of the company’s high priority exploration prospects which was technically validated through work in its previous joint venture with Apache.
"It is our vision to establish the country’s first unconventional oil production and prove commerciality of this potentially very large resource," Johnson added.
Image: The Waitangi Valley-1 well is located in Petroleum Exploration Permit 38348 in New Zealand’s East Coast Basin. Photo: courtesy of TAG Oil Ltd.
