Under the terms of the work program bids, the Company and TAG have committed to an extensive drilling program in 2013. A minimum of 9 exploration wells are planned in 2013, with TAG’s Cheal Petroleum subsidiary acting as operator. By the end of the first quarter of 2013, TAG expects to have completed its Cheal $30 million infrastructure expansion which is expected to support new discoveries from these three awarded blocks.
In bidding for the acreage, the partners had access to 3D seismic coverage over the blocks which demonstrated the presence of multiple prospects and leads similar to those being drilled and developed on the Cheal production permits. 12TAR 4 holds at least 5 shallow low-risk ready-to-drill prospects, plus numerous leads, which will be further studied by the partners. Prospects identified on 12TAR3 and 12TAR5 will provide for an additional four exploration drilling sites in 2013, with other drilling locations expected to be identified. East West will hold a 50% participation interest in 12TAR 3 and 12TAR5 and a 30% participation interest in 12TAR4.
Greg Renwick, President and CEO of the Company, stated, “the positive outcome of the New Zealand exploration bid round adds another core area to the Company’s portfolio of near-term drilling opportunities which are expected to add shareholder value. The work programs on these three core areas, Romania, California and now New Zealand, are fully funded through 2013.”
David Sidoo, Executive Chairman of the Company, commented, “I am very pleased to have East West recognized amongst a group of top international companies which were awarded acreage in this 2012 competitive bid round. The Company is also very excited to be partnering with TAG Oil, one of the preeminent exploration and production companies in New Zealand. We view these awards as the beginning of a long-term, successful relationship with TAG Oil in New Zealand. The awards validate East West’s growing international presence and reputation as an emerging player in upstream conventional and unconventional exploration.”
In announcing the awards, Minister Healey commented, “I am pleased to welcome a new international player to New Zealand, Canadian-based East West Petroleum, who has partnered with TAG Oil subsidiary Cheal Petroleum on three permits in the Taranaki Basin.” He also noted successful company bids were evaluated against a number of criteria including the proposed work programs and the technical and financial capability of the bidders.
Mr. Garth Johnson, President & CEO of TAG Oil, added, “TAG is pleased to expand its exploration acreage position in the Taranaki Basin with East West Petroleum. Both companies look forward to working closely together to quickly maximize the value of the new awarded acreage.”
About East West Petroleum Corp.
About TAG Oil Ltd.
In the East Coast Basin, TAG has entered into a farm-out agreement with Apache Corporation to explore and potentially develop the major unconventional resource potential believed to exist in the tight oil source-rock formations that are widespread over the Company’s acreage. These oil-rich and naturally fractured formations have many similarities to North America’s Bakken source-rock formation in the successful Williston Basin.
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