TAG Oil Ltd. announced the signing of a farm out agreement with Apache Corporation (APA) on the company’s oil and gas properties in New Zealand. The company believes that this agreement is the best method to accelerate the exploration and development of these assets.
TAG Oil Ltd. said that Apache Corporation has agreed to conduct an appraisal, exploration and development program on various areas of the company’s East Coast Basin properties. The company currently has more than one million acres of prospective properties in this basin.
The farm out agreement will cover exploration permits PEP 38348, 38349 and 50940, and will require Apache Corporation to pay part of the company’s previous direct costs on the permits involved. TAG Oil Ltd. will also receive a full reimbursement of three future phases of operations on the properties.
TAG Oil Ltd. said that each phase will involve drilling and seismic work and will earn Apache Corporation a set working interest percentage share of the properties. The company expects seismic work to begin shortly on the permit areas with drilling to begin in early 2012.
Apache Corporation will be the operator for all work conducted under the farm out agreement, except for the first four vertical wells on the properties, which will be operated by TAG Oil Ltd., with the assistance of Apache Corporation.
For more information on the company, go to www.tagoil.com
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