Oil & Gas Production

TAG Oil controls a 100% interest in Petroleum Mining Permit 38156-S which contains the Cheal oil discovery. The relatively shallow discovery has cumulative production of more than 500,000 barrels of oil to date, with remaining proven and probable reserves of approximately 530,000 barrels of oil equivalent.

Oil produced from Cheal is a high-quality, waxy low-sulfur oil that sells on the Tapis market at a premium to West Texas Intermediate due to its low sulfur content, and is sold primarily to Japan, Korea and Australia.

State-of-the-Art Treatment Facility
Completed in June of 2006, the Cheal facility is capable of handling up to 2000 bbls/d of oil. Brought online at a cost of US$36,000,000, the facility includes a gas-fired electricity generator that converts solution gas to electricity for use on-site, with all excess sold into the national grid.

In addition to planned increases in production from the existing six Cheal wells and overall recovery factor, TAG Oil has already reduced operating costs to under US$19 per barrel, some of the lowest operating costs in Australasia—down nearly 70% from more than $50 per barrel under its previous operator.