VANCOUVER, BC, Nov. 22,
2022 /CNW/ - TAG Oil Ltd. (TSXV: TAO) (OTCQX:
TAOIF) ("TAG Oil" or the "Company") is pleased
to announce the results of its independent resources evaluation of
the Abu Roash "F" unconventional formation ("ARF") in the Badr Oil
Field ("BED-1"), Western Desert, Egypt, dated November
21, 2022 (the "BED-1 Report"), prepared by RPS Energy Canada
Ltd. ("RPS") and its previously announced independent reserves
report associated with its royalty interests within Petroleum
Mining Permit ("PMP") 38156 (Cheal A/B), PMP 60291 (Cheal E) and
PMP 53803 (Sidewinder) (collectively the "Permits"), onshore
New Zealand, dated November 7, 2022 (the "Royalty Report"), prepared
by ERC Equipoise Ltd. ("ERCE").
A) BED-1 REPORT
HIGHLIGHTS
- RPS estimates the ARF oil-initially-in-place ("OIIP") P50
Volumes to be 531.5 million barrels over the BED-1 concession area
and Mean Volumes to be 536.6 million barrels. The discovered OIIP
in the ARF is imaged by 3D seismic coverage, significant well
control with over 30 penetrations, petrophysical analysis of
available log and core data and production tests from the ARF.
- TAG Oil's current Field Development Plan ("FDP"), consisting of
drilling 20 horizontal wells to be completed with multi-stage
fracture stimulation, is focused on the east central part of the
BED-1 concession area, and contains OIIP P50 Volumes of 178.3
million barrels and Mean Volumes of 179.0 million barrels.
- FDP Capital investment discounted at 10% is US$104 million for the 2C Development Pending
Contingent Resources in the ARF.
- FDP Operating investment discounted at 10% is US$160 million for the 2C Development Pending
Contingent Resources in the ARF.
- RPS best estimate for Contingent Resources volumes (2C
Development Pending) is 27.0 million barrels gross with 16.5
million barrels net to the Company.
- RPS estimate for Contingent Resources (2C Development Pending)
net present value discounted at 10% and assumed RPS Price Forecast
of April 1, 2022, per barrel is
US$339 million (risked at 80% chance
of development) and US$423 million
(un-risked).
- Contingent Resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
known accumulations using established technology or technology
under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies.
Contingent Resources, by definition, are not classified as reserves
due to several conditions including but not limited to the
uncertainties of future oil prices and performance of the initial
pilot wells in the first phase of the field development of the
project which must be resolved to ensure commerciality. There is no
certainty that it will be commercially viable to produce any
portion of the resources. The Development Pending sub-set for
contingent resources have reasonable potential for eventual
commercial development.
B) ROYALTY REPORT
HIGHLIGHTS
- ERCE estimates the 1P Proven Reserves Volumes to be 14 thousand
barrels and 2P Proven plus Probable Reserves Volumes over the
Permits to be 53 thousand barrels net to the Company.
- Net present value discounted at 10% is CDN$1.47 million for Proved Reserves and
CDN$4.96 million for Proven plus
Probable Reserves.
Abby Badwi, Executive Chairman
of TAG Oil commented "We are pleased that the RPS report
supports TAG's technical assessment of the unconventional
development of the ARF and our team's plans for such large-scale
development by utilizing North American proven drilling and
completion technologies for the first time in Egypt. To validate these assessments, the
first pilot well, a re-entry of an existing well, is scheduled for
next month and will be followed by the first horizontal well with
multi-stage fracture stimulation completion to be drilled in the
first quarter of 2023. In New
Zealand, the value of the royalty interest is attributable
to the Company continuing to receive a gross overriding royalty
equal to 2.5% of the gross sales revenue. In the 2022 calendar
year, the Company received CDN$947,477 in royalty payments."
Further details are also available on the Company's website at
www.tagoil.com.
About TAG Oil Ltd.
TAG Oil (http://www.tagoil.com/) is a Canadian based
international oil and gas exploration company with a focus on
opportunities in the Middle East
and North Africa.
Website: http://www.tagoil.com/
Neither the TSX-V nor its Regulation Services Provider (as
that term is defined in the policies of the TSX-V) accepts
responsibility for the adequacy or accuracy of this
release.
Cautionary Note Regarding
Forward-Looking Statements and Disclaimer
Statements contained in this news release that are not
historical facts are forward-looking statements that involve
various risks and uncertainty affecting the business of TAG.
All estimates and statements that describe the Company's
operations are forward-looking statements under applicable
securities laws and necessarily involve risks and
uncertainties. Actual results may vary materially from the
information provided in this release, and there is no
representation by TAG that the actual results realized in the
future will be the same in whole or in part as those presented
herein. TAG undertakes no obligation, except as
otherwise required by law, to update these forward-looking
statements if management's beliefs, estimates or opinions, or other
factors change.
Reserves are estimated remaining quantities of oil and
natural gas and related substances anticipated to be recoverable
from known accumulations, as of a given date, based on analysis of
drilling, geological, geophysical and engineering data, the use of
established technology, and specified economic conditions, which
are generally accepted as being reasonable, and shall be
disclosed.
Reserves are classified according to the degree of certainty
associated with the estimates. Proved reserves are those reserves
that can be estimated with a high degree of certainty to be
recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves. Probable
reserves are those additional reserves that are less certain to be
recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than
the sum of the estimated proved plus probable reserves. Possible
reserves are those additional reserves that are less certain to be
recovered than probable reserves. It is unlikely that the actual
remaining quantities recovered will exceed the sum of the estimated
proved plus probable plus possible reserves.
The qualitative certainty levels referred to in the
definitions above are applicable to "individual reserves entities",
which refers to the lowest level at which reserves calculations are
performed, and to "reported reserves", which refers to the highest
level sum of individual entity estimates for which reserves
estimates are presented. Reported reserves should target the
following levels of certainty under a specific set of economic
conditions:
- at least a 90 percent probability that the quantities
actually recovered will equal or exceed the estimated proved
reserves;
- at least a 50 percent probability that the quantities
actually recovered will equal or exceed the sum of the estimated
proved plus probable reserves; and
- at least a 10 percent probability that the quantities
actually recovered will equal or exceed the sum of the estimated
proved plus probable plus possible reserves.
The reserve estimates contained herein are estimates only and
there is no guarantee that the estimated reserves or resources will
be recovered. The estimates of reserves for individual properties
may not reflect the same confidence level as estimates of reserves
for all properties, due to the effects of aggregation.
Where discussed herein "NPV 10%" represents the net present
value (net of capital expenditures) of net income discounted at
10%, with net income reflecting the indicated oil prices and
initial production rate, less internal estimates of operating costs
and royalties. It should not be assumed that the future net
revenues estimated by TAG Oil's independent resource evaluators
represent the fair market value of the resources.
Contingent resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
known accumulations using established technology or technology
under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies.
Contingent resources, by definition, are not classified as reserves
due to several conditions including but not limited to the
uncertainties of future oil prices and performance of the initial
pilot wells in the first phase of the field development of the
project which must be resolved to ensure commerciality. There is no
certainty that it will be commercially viable to produce any
portion of the resources. The Development Pending sub-set for
contingent resources have reasonable potential for eventual
commercial development, to the extent that further data acquisition
and/or evaluations are currently ongoing with a view to confirming
that the project is commercially viable and providing the basis for
selection of an appropriate development plan. The critical
contingencies have been identified and are reasonably expected to
be resolved within a reasonable time frame.
Exploration for hydrocarbons is a speculative venture
necessarily involving substantial risk. The Company's future
success in exploiting and increasing its current resource base will
depend on its ability to develop its current properties and on its
ability to discover and acquire properties or prospects that are
capable of commercial production. However, there is no assurance
that the Company's future exploration and development efforts will
result in the discovery or development of additional commercial
accumulations of oil and natural gas. In addition, even if further
hydrocarbons are discovered, the costs of extracting and delivering
the hydrocarbons to market and variations in the market price may
render uneconomic any discovered deposit. Geological conditions are
variable and unpredictable. Even if production is commenced from a
well, the quantity of hydrocarbons produced inevitably will decline
over time, and production may be adversely affected or may have to
be terminated altogether if the Company encounters unforeseen
geological conditions. The Company is subject to uncertainties
related to the proximity of any resources that it may discover to
pipelines and processing facilities. It expects that its
operational costs will increase proportionally to the remoteness
of, and any restrictions on access to, the properties on which any
such resources may be found. Adverse climatic conditions at such
properties may also hinder the Company's ability to carry on
exploration or production activities continuously throughout any
given year.
The significant positive factors that are relevant to the
resource estimates are: proven production in close proximity;
proven commercial quality reservoirs in close proximity; oil and
gas shows while drilling wells; and calculated hydrocarbon pay
intervals from open hole logs. The significant negative factors
that are relevant to the resource estimates are: tectonically
complex geology could compromise seal potential; and seismic
attribute mapping can be indicative but not certain in identifying
proven resource.
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SOURCE TAG Oil Ltd.