MIDDAY UPDATE: TAG Oil plans 130-plus new Taranaki wells

Jan 25 (BusinessDesk) - Onshore Taranaki oil explorer TAG Oil is planning more than 130 new onshore wells, with 13 to drilled in 2013 and consents sought for platforms from which another 120 could eventually be drilled.

The Toronto-listed company says its 21 consecutive successful wells over the last two years allow it now to target "a higher risk, higher impact deep drilling component to its Taranaki Basin exploration efforts.

On top of its Taranaki plans, TAG is also preparing to drill exploration wells onshore on the east coast of the North Island, where oil and gas have not previously been produced.

While several of the wells this year will seek increased production from existing known resources, TAG will also be targeting deeper wells in the Kapuni formation, which it says is a "proven prolific play in Tarnaki and where most of New Zealand's landmark onshore and offshore fields have been discovered, including Maui, Kapuni and Mangahewa fields."

Among the deeper prospects to be drilled will be Cardiff, where gas was encountered in 1992, although subsequent drilling by Genesis Energy and Austral Pacific was unsuccessful, and TAG acquired Cardiff in 2010.

The company is also close to completing its US$36 million infrastructure upgrade to allow production from capped wells that are currently "behind-pipe" and will augment current production of some 2,000 barrrels of oil equivalent per day.

Government finances better than expected

The government's budget deficit is tracking slightly better than expected in the latest figures released from the Treasury on the five months to Nov 30.

The government posted an operating deficit before gains and losses (obegal) of $3.025 billion in the five months ended November 30, which was $203 million better than the $3.228 billion deficit forecast in the half-year economic and fiscal update released on December 18.

The government is trying to get its books back in the black in the 2014/15 financial year after taking serious hits from the global financial crisis and Christchurch earthquakes. In the update just before Christmas, Treasury forecast an obegal surplus of just $66 million in the 2014/15 financial year, down from the $197 million buffer flagged in the May budget.

In the accounts for the five months to November 30 released today, core Crown spending was 0.1 percent above forecast at $28.8 billion, and core tax revenue of $22.5 billion was $127 million, or 0.6 percent, higher than forecast.

Net gains recorded by the New Zealand Superannuation Fund and Accident Compensation Corp, pushed the operating balance to a $706 million surplus, a $1.2 billion turnaround on the forecast deficit of $515 million.

Net debt of $56.4 billion was $317 million below forecast and is equal to 27.1 percent of gross domestic product.

(BusinessDesk)

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