Tap managing director Paul Underwood said that at completion of the sale process, which was subject to Crown Minerals approval, Tap would receive consideration comprising an overriding royalty interest in the permits and about A$2.5 million cash.
Underwood said the results of Tap’s onshore Taranaki drilling program had been disappointing (last year’s Supplejack gas discovery was the only success) and Tap believed the remaining potential in these permits did not fit with the company's forward strategy for meaningful reserves growth.
Nevertheless, these permits were well suited to companies with complementary permit interests in the same area, such as TAG Oil and Austral Pacific.
TAG and Austral, in a 50-50 joint venture, are to acquire Tap’s interests in licences PEP 38736, 741, 744, 745, 746, 748, 765, 766, and the Kahili mining licence PMP 38153.
Underwood said a new seismic survey was recently acquired in Tap’s offshore East Coast permits (PEP 38333 and 340) and preparations were advanced for the Ocean Patriot to drill Cutter-1 in the offshore Canterbury Basin (PEP 38259) during the third quarter. Tap also has an interest in offshore Taranaki block PEP 38496.
TAG chief executive Drew Cadenhead said the Tap acquisition had further increased TAG's working interest in three of eight existing permits within onshore Taranaki, as well as adding strategic new acreage in six additional onshore permits. The TAG-Austral joint venture also acquired drilling and completion inventory.
"The lands acquired from Tap are contiguous with our existing focus in the production fairway of onshore Taranaki, and we're happy to increase our interest in existing projects like our Supplejack gas-condensate project,” said Cadenhead.
“Since Christmas we have more than doubled our net acreage in this key area from 30,000 acres to 66,000 acres.
“We are at a much higher working interest in our 3D seismically defined Waitoriki deep gas prospect scheduled to be drilled later this year, and we've added a number of new deep gas prospects, including an upcoming well within the Kahili mining licence.”
Cadenhead said Ausral and its Kahili partners, which included NGC, discovered the small field in 2002, but after it was put into production it unexpectedly stopped producing. The NGC-built production facility had now been sitting idle for many months.
But newly acquired seismic had identified an updip location planned to be drilled later this year and the NGC production facility would provide “immediate market access for any new discoveries," Cadenhead said.
