Oil and gas producer Tag Oil reported that ongoing production testing of its 100%-controlled Cheal-BH-1 horizontal well in the Taranaki Basin of New Zealand continues with positive results.

To date, a conservative range of low draw-down configurations has been tested, with associated production rates ranging from 400 to 500 barrels of oil equivalent per day (predominantly oil) with no water.

The company said that it will further test the full production capabilities of the well in coming months, with the goal of optimizing daily flow rates while maximizing long term reserve recovery.

Tag Oil CEO Garth Johnson said that with hundreds of meters of high quality oil and gas pay across the horizontal section in the Cheal-BH-1 well, and the strong flowing pressures measured during testing, the company anticipates rapid capital recovery and long term profitability from this well.