TAG president Drew Cadenhead confirmed the restructuring to PetroleumNews.net, saying that a lack of exploration success and a dispute with Green Gate over the drilling of Kate-1 in onshore Canterbury had contributed to the cutback.

TAG’s Toronto Stock Exchange share price has plummeted in recent weeks, dropping from about C60c to C25c.

Cadenhead said TAG had not yet decided which permits it would keep and which would be relinquished.

“We are conserving cash, minimising overall exploration risk and trying to put ourselves in a strong position for any possible future expansion,” Cadenhead told PNN. However, the company will keep its Vancouver, Wellington and New Plymouth offices.

Recent uneconomic shallow onshore Taranaki wells had included Mangamingi-1 in licence PEP 38758 (TAG 100% equity) and Ratanui-1 in PEP 38741 (operator Austral Pacific Energy, 55%, TAG, 45%).

Both were plugged and abandoned earlier this year after failing to find commercial hydrocarbons in the targeted Miocene-aged Mount Messenger and Moki sands.

But TAG is still optimistic about the potential of some deeper onshore Taranaki prospects, including those at the troublesome Cardiff and Kahili fields.

The Cardiff partners had spent about $NZ28 million ($A24.7 million) on Cardiff since early 2005, though progress had been slow because of technical problems, formation water and zone isolation problems.

Cadenhead said he hoped further testing of the Eocene-aged K3E sands would be the key to unlock the puzzle of Cardiff and the potential prize of about 200 billion cubic feet of gas.

A Kahili-2 well was also planned as the Kahili partners believed a significant gas-condensate accumulation existed updip of the now shut-in Kahili-1B well, which could be hooked up to the existing unused production station.

However, Cadenhead said TAG’s main focus remained the development of the onshore Taranaki Cheal oil field.

Cheal operator Austral has said it and TAG are aiming for full production of about 1900 barrels per day of oil from July, from development wells in the A and B lobes of the 4.4 million barrel field – development of which could cost $NZ25 million.

Cadenhead also said TAG would be continuing its High Court case against Green Gate, seeking substantial damages from the small private New Zealand company relating to their dispute about Kate-1.

Early this month, TAG said it had written off its interests in PEP 38260 due to Green Gate’s cancellation of TAG’s agreement to earn up to 70% interest in the permit by drilling Kate-1.