The company is also looking at ways to reduce the drilling costs of its Canterbury campaign, partly to counter the high mobilisation-demobilisation costs of moving land rigs from the North Island to the South Island.

If successful, the company says these new drilling methods could be used in other TAG onshore operations.

Company president Drew Cadenhead told PetroleumNews.net that TAG was looking at slimhole drilling and continuous coring to reduce onshore drilling costs. Cadenhead said the goal was to be able to ascertain about 90% of the relevant downhole data for less than 50% of traditional drilling costs.

“If TAG is successful in trialling new drilling methodologies in Canterbury, these alternatives are potentially applicable in all regions of onshore New Zealand where TAG holds acreage, including elsewhere in the South Island, Taranaki and Wairarapa.”

Cadenhead said TAG had undertaken several onshore Canterbury seismic programs and surface geochemical studies and was optimistic that its two Canterbury wells would encounter worthwhile hydrocarbon accumulations.

“The Kate-1 well, in licence PEP 38260, is a 15 square kilometre surface anticline with oil seeps around it, and the Salmon-1 well will be drilled near the Rakaia River, in licence PEP 38256.”

Cadenhead said TAG now held 100% equity in PEP 38256, following the withdrawal of Austral Pacific Energy, operator of the onshore Taranaki Cheal oil field in which TAG is also a partner.

Cadenhead said although Kate-1 and Salmon-1 would be TAG’s first Canterbury wells, Canadian independent Durum Energy, now a TAG oil subsidiary, had been involved in two onshore Canterbury wells, Arcadia-1 and Ealing-1, early this decade.

“Both wells identified brilliant reservoir quality formations and competent sealing formations above the reservoirs, but no hydrocarbons were found with these two early attempts,” he said.

He conceded that being frontier exploration, the two Canterbury wells were high risk, but said TAG’s business model combined a focus on low-risk developments, such as Cheal, with several high risk, high reward prospects.