Austral Pacific to Drill Two Wells in Cheal Oil Field
May 26 2008 - 11:18PM
PR Newswire (US)
WELLINGTON, New Zealand, May 27 /PRNewswire-FirstCall/ -- Austral
Pacific Energy Ltd. (TSX-V: APX; NZSX: APX; Amex: AEN) Austral
Pacific Energy Ltd. (Austral) is pleased to announce the upcoming
drilling of the A6 and A7 wells in the onshore Taranaki Cheal Oil
Field (PMP38156-01), Stratford, New Zealand. The new wells will
target the same shallow oil producing Mt Messenger sands that are
currently generating substantial revenue for the Cheal Joint
Venture. It is anticipated that successful drilling will result in
completion and tie-in in time to deliver increased oil production
prior to year end 2008. The Joint Venture has also reached
agreement to undertake a comprehensive programme of technical
studies to support the drilling of the Greater Cheal Trend. The
agreement to drill the wells is part of an arrangement between the
Cheal Joint Venture Parties to resolve disputed costs related to
the construction of the Cheal Production Station. The agreement
includes a full and final settlement of all claims, a commitment to
drill the A6 and A7 wells as a joint operation and best efforts
approach to creating a production JVOA (Joint Venture Operating
Agreement) to guide future work programs. The resolution includes a
net payment to Cheal Petroleum Limited (a subsidiary of TAG Oil
Limited) of US$1.6 Million in a combination of cash, Austral stock
and expected forward production from the A7 well. Subject to TSX-V
approval, Austral will issue 2.273 million ordinary shares to TAG
with anti-dilutive protection provided for a period of six months
and in return TAG has agreed not to dispose of these shares for a
period of twelve months. In addition Austral has agreed to pay TAG
NZ$300,000 and TAG has agreed to pay its NZ$600,000 share of the
remaining Cheal facilities costs that were being withheld pending a
resolution to the dispute. In the event Cheal A7 is successfully
completed for production, TAG will receive an additional US$250,000
payable in equal installments over twelve months. Commenting on the
agreement to drill the wells, Austral CEO and President, Thom
Jewell said, "We are pleased to have reached resolution on this
issue and to have the joint venture aligned on the upcoming
drilling program. We are excited to be back to drilling. "Future
drilling targets have been identified and will be fully defined and
prioritised through a comprehensive seismic processing, analysis
and reservoir simulation project, which has also been agreed as
part of the settlement." The Company's stated focus on increased
production and reduced costs through full utilisation of the world
class Cheal production station are beginning to bear fruit. Mr
Jewell believes the new wells are the next step for Austral to
demonstrate added value from the Cheal, Kahili and Cardiff
Projects. Web site: http://www.austral-pacific.com/ Email: Phone:
Thom Jewell, CEO +64 (4) 495 0880 None of the Exchanges upon which
Austral Pacific's securities trade have approved or disapproved the
contents hereof. This release includes certain statements that may
be deemed to be "forward-looking statements" within the meaning of
applicable legislation. Other than statements of historical fact,
all statements in this release addressing future production,
reserve potential, exploration and development activities and other
contingencies are forward-looking statements. Although management
believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance, and actual results or
developments may differ materially from those in the
forward-looking statements, due to factors such as market prices,
exploration and development successes, continued availability of
capital and financing, and general economic, market, political or
business conditions. See our public filings at
http://www.sedar.com/ and
http://www.sec.gov/edgar/searchedgar/webusers.htm for further
information. DATASOURCE: Austral Pacific Energy Ltd. CONTACT: Thom
Jewell, CEO of Austral Pacific Energy Ltd., +64 (4) 495 0880, or
Web site: http://www.austral-pacific.com/
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