Rheochem, an oil and gas services company, has won a contract from Tag Oil NZ to supply drilling fluids and related engineering services for the company's 2011 onshore Taranaki Basin drilling program.

The supply agreement is for an initial five wells with the potential to add a further three wells based on drilling success.

Tag Oil holds a drill-ready prospect inventory that covers more than 3,500 sections of land in the Taranaki and East Coast basins, including a 100% interest in the producing Cheal oil and gas discoveries now under appraisal and development.

Rheochem CEO Haydn Gardner said that Tag Oil is a new oil and gas customer for Rheochem in New Zealand and builds on the geothermal contracts already in place.