TAG Oil Ltd., reports its third quarter results for the interim period ending 31 December 2017, highlighted by a 6% increase in revenues and a 40% increase in operating netbacks from the previous quarter.
Toby Pierce, TAG Oil’s CEO, commented “I am very pleased with both the increase in operating netbacks and the revenues quarter-over-quarter despite the modest declines in production. With temporary production issues experienced in Q3, which are being addressed, we anticipate increased production in the next quarter. Furthermore, with stronger netbacks TAG Oil is fully capable of self-funding itself both on our existing as well as our future operations. Finally, the waterflood program continues to progress at Cheal with increased production volumes likely expected in calendar H2/18.”
Q3 2018 financial and operating highlights
- At 31 December 2017, the Company had US$3.3 million (30 September 2017: US$2.7 million) in cash and cash equivalents and US$9.8 million (30 September 2017: $8.7 million) in working capital.
- Average net daily production decreased by 9% for the quarter ended 31 December 2017, to 1043 boe/d (79% oil) from 1151 boe/d (78% oil) for the quarter ended 30 September 2017.
- Revenues generated from oil and gas sales increased by 6% for the quarter ended 31 December 2017, to US$6.4 million from US$6.0 million for the quarter ended 30 September 2017.
- Operating netbacks increased by 40% for the quarter ended 31 December 2017, to US$43.21 per boe compared with US$30.95 per boe for the quarter ended 30 September 2017.
- Capital expenditures totalled $1.3 million for the quarter ended 31 December 2017, compared to US$6.8 million for the quarter ended 30 September 2017.
- On 27 November 2017, New Zealand Petroleum and Minerals approved the application to extend the duration of exploration for the Company’s 70% working interest of Cheal East permit (PMP 54877) for an additional five year term, commencing 11 December 2017.
On 30 January 2018, Mr. Alex Guidi resigned as Chairman and a Director of the Company.
TAG Oil spudded the Pukatea-1 exploration well on 24 January 2018, which is located in TAG Oil’s operated Puka permit (PEP 51135, 70% TAG Oil) in the Taranaki Basin of New Zealand. The well will be drilled to a total depth of ~3170 m and is expected to reach the high impact Tikorangi Limestone target in approximately nine days time. The Pukatea prospect is on trend and adjacent to the Waihapa oil field, which was discovered in the early 1990s and has produced more than 23 million bbls from the Tikorangi Limestone formation, where individual wells produced as much as 5000 bbl/d.
On 12 February 2018, TAG Oil reported that the well encountered potential oil pay in the Mt. Messenger formation of ~10.4 m of true vertical thickness (~13.7 m measured) gross sandstone within the formation at a depth of ~1618 m measured depth. Electric log data analysis indicates that there is at least one potentially oil-charged zone with movable hydrocarbons with excellent porosity and permeability. Maximum total gas reached 19.2%, good oil fluorescence was observed, and clean sand similar to the Puka-2 well was also observed by the wellsite geologist.
Going forward, management will continue to employ its disciplined approach and remain focused on production, appraisal and exploration opportunities, and TAG Oil will continue to work towards achieving the following goals:
- Maximising the value of its operations in its producing fields by maintaining enhanced oil and gas recovery techniques to optimise production and lower per bbl production costs.
- Establishing additional proved reserves and commercialising its oil and gas exploration properties.
- Reviewing potential acquisitions of overlooked/undervalued opportunities in New Zealand and Australia.
- Managing its operating cash flows and balance sheet as effectively as possible to minimise costs while focusing on shareholder returns.
Read the article online at: https://www.oilfieldtechnology.com/special-reports/15022018/taf-oil-reports-q3-2018-results/