TAG Oil reported that the recently drilled Cheal-C1 exploration well has now set production casing to total depth, in order to production flow test the light oil potential identified in both the Mt. Messenger (~1600m), and the deeper Moki (~2,200m) formation targets. The Cheal-C1 well was drilled directionally from the new "Cheal-C site" in TAG Oil's Petroleum Mining Permit 38156 (PMP 38156) in the Taranaki Basin, New Zealand.

The Cheal-C1 well was drilled approximately 3.5 km to the northwest of the existing Mt. Messenger producing wells, with results extending the Mt. Messenger oil saturation area over a considerably larger area than previously known. Over 15 meters of net oil-and-gas bearing sandstones were intercepted in the Mt. Messenger with good porosity and free oil encountered while drilling through the zone.

The Mt. Messenger was the primary objective of the Cheal-C1 well however it was deepened to a total depth of 2382 meters (7815 feet), to test the down-dip edge of a large closure within the deeper Moki Formation. Strong oil and gas shows were encountered within a 73-meter thick, high quality section of porous and permeable sandstone. Any future wells directly targeting this Moki Formation structure will be drilled in an updip position, which could potentially intersect substantially more of the hydrocarbon-charged Moki sandstones.

"We are very pleased to have extended the Mt. Messenger play into the "C" block, and look forward to further exploiting this oil-prone area," TAG Oil CEO Garth Johnson commented. "We're also very optimistic about the Moki Formation discovery potential, which is a prolific oil producer in the offshore Maari oil field. However, very few wells have targeted this formation onshore so we will need flow-test data before any conclusions are reached in regards to its commercial potential."

Tags: TAG Oil Ltd.