VANCOUVER, BC, Sept. 20,
2022 /CNW/ - TAG Oil Ltd. ("TAG Oil" or the
"Company"), (TSXV: TAO) and (OTCQX: TAOIF) is pleased to
announce that it was formally awarded a petroleum services
agreement (the "PSA") on September 11,
2022 by Badr Petroleum Company ("BPCO") to develop the
unconventional Abu Roash "F"
reservoir ("ARF") in the Badr Oil Field ("BED-1"), a 107
km2 (26,000 acres) concession located in the
Western Desert of Egypt.
Over the last several months, TAG Oil completed an evaluation of
the data package provided by the Egyptian General Petroleum
Corporation ("EGPC") for BED-1. After extensive negotiations with
EGPC, the Company submitted its final letter of intent on
May 29, 2022 (the "Letter of Intent")
to develop the ARF formation in the BED-1 concession.
The Company received a confirmation letter on August 24, 2022, referencing the Letter of
Intent, which confirmed that EGPC had commissioned BPCO to conclude
the PSA with TAG Oil. The final draft of the PSA has been completed
and initialed by all parties, and the Company anticipates that it
will become effective shortly upon TAG Oil posting a performance
letter of guarantee for US$6.0
million.
The Badr Oil Field was discovered in 1982 by a joint venture
between Shell Oil and EGPC (Bapetco). There has been significant
historical production across the concession from conventional
reservoirs of light oil and associated natural gas through primary
development of the Kharita, Bahariya and certain Abu Roash sandstone formations. The ARF
reservoir produced conventionally from some wells with considerable
initial oil rates but has declined rapidly as this is the nature of
such tight reservoirs.
TAG Oil has conducted a detailed technical analysis of the
geologic, geophysical and well production data of the target ARF
zone, which is a deep, tight, low porosity, low permeability
carbonate reservoir with varied fluid characteristics across BED-1.
TAG Oil has determined that there is a high probability for
successful commercial development of the ARF reservoir by applying
proven technologies including long-reach horizontal wells,
hydraulic fracture stimulation and potentially other enhanced oil
recovery production techniques. These methodologies have been
successfully implemented by TAG Oil's management team expertise in
the past in reservoirs in Canada,
Albania and Egypt, and by other operators in analogous
properties in Canada and the
USA.
The data provided to TAG Oil by EGPC indicates that the ARF
contains significant volumes of oil in place in the BED-1
concession and tested medium gravity crude oil without
stimulation. Production profiles from these wells demonstrated high
initial rates with rapid decline consistent with the nature of
primary depletion in tight, low porosity reservoirs. The ARF zone
has not been commercially developed under conventional completion
technology by previous operators. To verify the resource potential
of the oil in place volumes and assess TAG Oil's proposed
development plan for this play, the Company has engaged the
services of an independent engineering firm, RPS Energy Canada, to
evaluate the oil resources associated with the ARF zone in the
BED-1 area.
Accordingly, the Letter of Intent includes a proposal to develop
the ARF reservoir unconventionally in 3 phases.
Phase 1: Evaluation Period, which is considered as a
pilot development stage.
Phase 2 & 3: Commercial Production stages that will
be commenced once the pilot stage is successful.
Production Revenue Entitlement Fee. BPCO shall pay
the Company a service fee, which is a percentage of the gross
revenues generated from the project, to compensate the Company
for assuming 100% of the capital
and operating expenditures required for the ARF
development at BED-1. The Company shall receive
an entitlement fee for all production established
and sold during the term of the PSA, including
the piloting period.
Abdel Fattah ("Abby") Badwi,
Executive Chairman of TAG Oil said, "We are pleased to
have reached our first important agreement in Egypt to develop this significant project.
While the agreement contemplates a piloting period to prove its
concept, the type of reservoir and anticipated development plan has
previously delivered successful results in more challenging oil and
gas reservoirs in Canada and the
USA." He added, "TAG Oil is
strategically well positioned to pursue other oil and gas
exploration and development opportunities that are currently being
investigated in Egypt and
other areas of the Middle East.
The Company will keep you apprised of its progress in
these initiatives as they arise."
Further details of the project are included in a presentation
available on the Company's website.
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.
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.
Forward-Looking
Statements and Disclaimer
Statements contained in this release that are not historical
facts are forward-looking statements that involve various risks and
uncertainty affecting the business of TAG Oil. Such statements can
generally, but not always, be identified by words such as
"expects", "plans", "anticipates", "intends", "estimates",
"forecasts", "schedules", "prepares", "potential" and similar
expressions, or that events or conditions "will", "would", "may",
"could" or "should" occur. All statements that describe the
Company's plans relating to operations and potential strategic
opportunities are forward-looking statements under applicable
securities laws. These statements address future events and
conditions and are reliant on assumptions made by the Company's
management, and so involve inherent risks and uncertainties, as
disclosed in the Company's periodic filings with Canadian
securities regulators. As a result of these risks and
uncertainties, and the assumptions underlying the forward-looking
information, actual results could differ from those currently
projected, and there is no representation by TAG Oil that the
actual results realized in the future will be the same in whole or
in part as those presented herein. The Company does not assume the
obligation to update any forward-looking statement, except as
required by applicable law.
Exploration for hydrocarbons is a speculative venture
necessarily involving substantial risk. The Company's future
success in exploiting and increasing its current reserve 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.
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SOURCE TAG Oil Ltd.