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TAG Oil Reports Q1 2018 Results

Vancouver, B.C. – August 14, 2017 – TAG Oil Ltd. (the “Company” or “TAG Oil”) (TSX: TAO and OTCQX: TAOIF) is pleased to report first quarter results for the fiscal year ending March 31, 2018. Most notably, the Company successfully drilled and flow tested the Cheal-E8 exploration well on its 70% working interest and operated Cheal East permit (PEP 54877) located in the Taranaki Basin of New Zealand, which has since been tied-in to TAG Oil’s existing infrastructure as a permanent producer. Further, the Company is also pleased to announce that it has successfully drilled and cased the Cheal-D1 exploration well, with testing operations currently underway and results expected within the next two weeks.

TAG Oil’s aim is to continue to remain disciplined and focused on its core producing operations, and to reduce variable production and administrative costs wherever possible. TAG Oil is also continuing with its efforts to increase its production and reserves base, as well as assessing strategic acquisition and farm-in opportunities in New Zealand and Australia.

Toby Pierce, TAG Oil’s CEO, commented “Q1 2018 has been a very busy quarter for TAG Oil.  Our focus has been on execution – drilling Cheal-E8 and converting Cheal-A2 to a water injector.  In addition, we had a complete plant and pipeline shutdown at the beginning of April for 8 days, which kept our New Zealand team busy, but they have done an excellent job of executing the project safely and efficiently. Oil prices were 14% weaker than we had forecast during the quarter, however it appears that it may be strengthening as we progress through Q2 2018. In any event, we continue to closely monitor oil prices and our capital position in order to manage liquidity and capital budgets. We are prepared to trim our budgets, where appropriate, if it is required to preserve the balance sheet. Finally, farm-out discussions are continuing with regards to two of our prospects – the Pukatea well and the Cardiff acreage.”


  • At June 30, 2017, the Company had $12.2 million (March 31, 2017: $21.6 million) in cash and cash equivalents and $15.2 million (March 31, 2017: $25.9 million) in working capital.
  • Average net daily production decreased by 4% for the quarter ended June 30, 2017 to 1,169 boe/d (77% oil) from 1,218 boe/d (79% oil) for the quarter ended March 31, 2017. A breakdown of net production is as follows:
    • Average net daily oil production decreased by 7% to 895 bbl/d compared with 964 bbl/d for the quarter ended March 31, 2017, which is primarily a result of the prearranged full shutdown at the Cheal production facility for 8 days in April 2017 for statutory inspection purposes.
    • Average net daily gas production increased by 8% to 1.6 MMcf/d compared with 1.5 MMcf/d for the quarter ended March 31, 2017, which is primarily due to additional gas production from the Cheal-E8 well coming online in late May 2017 and additional gas at the Sidewinder-2, 5 and 6 wells being online during the quarter.
  • Revenues generated from oil and gas sales decreased by 14% for the quarter ended June 30, 2017 to $5.4 million from $6.3 million for the quarter ended March 31, 2017, which is primarily due to a 14% decrease in average Brent oil prices and a decrease in oil volume of 7%, partly offset by an 8% increase in gas volume.
  • Operating netbacks decreased by 16% for the quarter ended June 30, 2017 to $23.09 per boe compared with $27.46 per boe for the quarter ended March 31, 2017, which is attributable to a 14% decrease in average Brent oil prices and a 4% decrease in average net daily production, partly offset by a 9% decrease in production costs per boe due to savings on general repairs and maintenance.
  • Capital expenditures totalled $9.8 million for the quarter ended June 30, 2017 compared to $8.1 million for the quarter ended March 31, 2017. The majority of the expenditure in Q1 2018 related to the Cheal-E8 well, the Cheal-D1 well pad construction, the Cheal production facility inspection, the Cheal A/B pipeline inspection, the Cheal-A2 water flood project and the Cardiff-2 K2 well perforations.
  • On May 24, 2017, TAG Oil announced that the Cheal-E8 exploration well was successfully drilled and flow tested. The well was drilled and completed to a total measured depth of over 2,000 m. The primary objective of the Cheal-E8 well was to test the potential of the Urenui formation, with the deeper Mt. Messenger formation as the secondary objective. Net pay of approximately 17 m of Urenui sands and 4 m of Mt. Messenger sands were recorded. The Cheal-E8 well naturally free flowed oil and gas on choke at an average rate of 318 boe/d during a four and a half day test. No water production was observed during the test. The Cheal-E8 well has since been tied-in to TAG Oil’s existing infrastructure as a permanent producer and is currently producing approximately 75 boe/d on pump.
  • The Cheal A-Site Mt. Messenger pool waterflood project, TAG Oil’s third in New Zealand, has commenced with water injection via the Cheal-A2 well. Water injection commenced in July 2017 and the current injection rate is approximately 600 bbl/d. Pressure support is anticipated to potentially double the current recovery factor and result in an incremental increase in production and reserves.
  • Perforations in the Cardiff-2 well were completed in June 2017 using precision propellant, with clean up and testing operations continuing. TAG Oil expects to tie in the Cardiff-2 well to the Cheal production facility by the end of September 2017.


On August 5, 2017, the Company completed drilling operations on the Cheal-D1 exploration well, which is located at the Cheal East permit, and was cased for production testing. An 18 m section of high quality gas and condensate bearing sands will be tested over the next two weeks with results expected in August. 

TAG Oil and its joint venture partner, Melbana Energy Ltd., have approved drilling the Pukatea-1 well, located onshore in New Zealand within the Puka permit (PEP 51153), which is tentatively planned to commence in Q4 2018. The Pukatea-1 well is planned to be drilled from the existing production pad at the Puka permit where three other wells have previously been drilled. 

The acquisition of 70 km2 of 3D seismic across TAG Oil’s 100% owned PL17, located in Australia’s Surat Basin, is nearly complete with processing set to begin in September 2017. The Company expects to begin using this 3D seismic data in early Q4 2018 to design an exploitation, appraisal and exploration drilling program on its Bennett and Leichhardt fields. 

Going forward, TAG Oil will continue to work towards achieving the following:

  • Improve its enhanced oil and gas recovery techniques in its producing fields to optimize production to maximize the value of its operations;
  • Continue efforts to establish additional proved reserves and to commercialize its oil and gas exploration properties;
  • Review potential acquisitions of overlooked/undervalued opportunities in New Zealand and Australia; and
  • Manage its operating cash flows and balance sheet as effectively as possible to minimize costs while focusing on shareholder returns.

About TAG Oil Ltd.

TAG Oil ( is a development-stage international oil and gas producer with established high netback production, development and exploration assets, including production infrastructure in New Zealand and Australia. TAG Oil is poised for significant reserve and production growth with several oil and gas fields under development and high-impact exploration in proven oil and gas fairways. TAG Oil is debt-free and currently has 85,282,252 shares outstanding.

For further information:

Chris Beltgens, Vice President, Corporate Development
Phone: 1-604-682-6496
Email: [email protected]

Cautionary Note Regarding Forward-Looking Statements and Disclaimer

Statements contained in this news release that are not historical facts are forward-looking statements that involve various risks and uncertainty affecting the business of TAG Oil. Such statements can generally, but not always, be identified by words such as “expects”, “plans”, “anticipates”, “intends”, “estimates”, “forecasts”, “schedules”, “prepares”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. All estimates and statements that describe the Company’s plans relating to operations, including the Cheal East permit, the Puka permit and PL17, are forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties. Actual results may vary materially from the information provided in this release, and there is no representation by TAG Oil that the actual results realized in the future will be the same in whole or in part as those presented herein.

Other factors that could cause actual results to differ from those contained in the forward-looking statements are also set forth in filings that TAG Oil and its independent evaluator have made, including TAG Oil’s most recently filed reports in Canada under National Instrument 51-101, which can be found under TAG Oil’s SEDAR profile at TAG Oil undertakes no obligation, except as otherwise required by law, to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors change.

Disclosure provided herein in respect of boe (barrels of oil equivalent) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.