Tag Oil has said that it has completed its first fracture stimulation at the Cheal oil and gas field since acquiring a 100% interest in the Taranaki Basin new field oil and gas discovery in late 2009.

Tag completed a 17-ton artificial fracture stimulation into the Mt Messenger Formation on the Cheal A7 well. Initial flow testing has increased daily production rates on the Cheal A7 well by approximately 365% to 292BOE per day.

The well is expected to take up to two weeks to fully clean-up and is currently being choked back to minimize frac-sand flow back. Prior to the fracture stimulation, the Cheal A7 well was producing 80BOE per day.

This field’s oil sells at a premium to West Texas Intermediate, primarily to Australian, Korean and Japanese refineries, and the A7 well has been tied into Tag’s nearby Cheal Production Station.

Tag Oil Garth Johnson, CEO of Tag Oil, said: “These encouraging results are an example of how Tag can deliver value by leveraging our North American expertise and technology to under-developed New Zealand oil fields. The success of this newly fractured Cheal A7 well provides a catalyst for future development of the field.”

Tag owns 100% of the Cheal Production Licence, which is only lightly explored. In addition to the inherent potential within the defined Cheal discovery area, including additional existing Cheal production wells as fracture candidates, the company has an inventory of follow-on prospects identified on 3D seismic and drill-ready.

Tag plans in the near future to begin a Taranaki drilling campaign that will include horizontal drilling with multi-stage fracturing, combined with downhole heating and advanced recovery technologies as standard completion methodology.