Canada-based TAG Oil has commenced drilling at the Ngapaeruru-1 exploration well, located in the East Coast Basin of New Zealand.
The Ngapaeruru-1 exploration well is targeting the Waipawa Black Shale and Whangai source rock formations at a depth of 1,800m.
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During drilling, TAG Oil will test the unconventional discovery potential in both the formations.
The Waipawa Black Shale and Whangai formations include high-quality source rock formations, which comprise total organic carbon content and oil and gas maturity levels similar to tight oil and gas plays, such as North Dakota’s Bakken in Williston Basin.
TAG Oil CEO Garth Johnson said the company plans to build reserves, production infrastructure, and cash flow from the lower risk conventional assets such as the East Coast Basin.
"With TAG’s continued success in the Taranaki Basin – and our successful commercialisation of these discoveries – we continue to deliver on the first part of this plan," Johnson added.
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By GlobalData"Drilling Ngapaeruru-1 is another step in delivering on our business plan: pursuing these higher risk, higher impact exploration wells from a very strong financial position."
The source rock formations in company’s East Coast Basin play are about 600m thick in some areas, while oil from the naturally-fractured source rocks measures 50 degree API.
TAG’s East Coast Basin acreage is expected to hold about 14 billion barrels of undiscovered oil.
In addition, TAG Oil announced on April 2013 that it has completed its Cheal infrastructure expansion project in the Taranaki region , New Zealand.
The $25m original Cheal facility has been expanded with oil processing capability, gas-liquids’ extraction capabilities, and construction of a new 11km pipeline to New Zealand’s primary gas transmission pipeline, by investing additional $30m.
Image: Location of the Ngapaeruru-1 exploration well in East Coast Basin, New Zealand. Photo: Courtesy of Tag Oil.
