Vancouver-based TAG announced over the weekend it was talking with several advisory firms about the company’s New Zealand operations.
Options being considered are an outright sale of some or all of its New Zealand interests and facilities; consideration of potential merger opportunities; farming-out certain prospects to industry participants; and new joint venture opportunities that met the company’s risk profile.
“With the Cheal production facility fully operational, TAG is in an excellent position to leverage its New Zealand oil and gas assets,” company chief executive Garth Johnson said, referring to TAG’s 30.5% stake in the small onshore Taranaki oil field operated by Austral Pacific Energy (69.5%).
Cheal started commercial production late last month, with initial flows of about 850 barrels per day that are scheduled to increase to 1200-1500bpd from early next year.
Johnson said Cheal was TAG’s primary asset, with total 2P (proved and probable) recoverable reserves independently assessed at about 2.6 million barrels of oil.
But the company also held other onshore Taranaki high-graded exploration prospects with “significant resource potential”.
These included the Cardiff deep gas prospect (TAG 15.1% interest), Kahili deep gas prospect (TAG 15%), Waitoriki deep gas prospect (TAG 45%), Onaero gas prospect (TAG 16.67%), and the Crossroads oil prospect (TAG 30.5%).
Johnson said there was no assurance the review would result in any commercial transactions.
Earlier this year TAG clashed with private company Green Gate over plans to drill Kate-1 in onshore Canterbury licence PEP 38260 and has now withdrawn from that permit and relinquished another Canterbury licence, PEP 38256.
TAG was also involved in some disappointing shallow onshore Taranaki wells – including Mangamingi-1 (PEP 38758, TAG 100%) and Ratanui-1 (PEP 38741, operator Austral, 55%, TAG, 45%) – and decided to abandon shallow (Miocene-aged) exploration.
The company is now concentrating on Eocene-aged onshore plays, largely in onshore Taranaki, with a few wells in high-risk frontier regions, including the East Coast Basin licence PEP 38342.
