Tag Oil remains bullish on Tararua
Tag Oil remains bullish on Tararua
LUCY TOWNEND
Tag Oil remains optimistic about oil opportunities in Tararua, despite giving up on a site on the East Coast.
The Canadian company relinquished a permit at Nicks Head, near Gisborne, last week after it said it wasn't worth carrying on there.
This followed a Tag site surrendered in the South Island, at Blenheim Rock, earlier this year and New Zealand Oil & Gas relinquishing a permit in Taranaki on Friday and another last year.
Tag's chief operating officer Drew Cadenhead said this was not a sign that exploration along the East Coast, including sites in Tararua, would cease.
Mr Cadenhead said the Nick's Head permit, granted in 2009 and covering 275 square-kilometres inland, was canned after extensive technical work, including surface mapping, core sampling and shallow drilling, failed to find anything worthwhile.
The area didn't meet the company's criteria for the "unconventional or conventional sites" Tag was focusing on in the East Coast Basin, Mr Cadenhead said.
"We want to make to clear that surrendering this permit in no way changes our optimistic outlook for the potential of our main East Coast permits."
Tararua Frack Free member Raewyn Conning said more sites should be dropped and oil exploration plans abandoned.
"It'd be great if they picked up skirts and left here too . . . because we live in fear of what's going to happen next.
"But on the other hand, if they're leaving sites elsewhere because there's nothing there, are they going to intensify work in Tararua instead?"
A Tag Oil NZ spokesman said surrendering sites or passing on permits was common.
In the past, companies have done the preliminary work on a permit, relinquished it and another company has taken over to analyse the data and potentially drill.
Tag's spokesperson said permits were relinquished if they were not looking promising after initial exploration, if the permit holder couldn't find partners to share costs with or if companies couldn't meet permit conditions.
Ms Conning said the swapping of sites from one company to another was a worrying practice.
"How can we be sure that these people they're passed on to are kosher?"
Tag Oil has to drill four exploratory wells on the East Coast to meet permit conditions.
Oil data still being analysed
Results from the Tag Oil site in Tararua are still taking shape.
The Ngapaeruru exploratory drill site, near Dannevirke, marked the company's first unconventional test well in New Zealand and the data gathered from the well, dug in May, was still being analysed, a Tag Oil NZ spokesman said last week.
The findings will shed light on the suitability of the East Coast's rock quality for drilling, and they should build a long-term picture of the coast's oil basin opportunities.
Early indications showed "excellent mud gas reading", and the company's annual report, released this month, said further exploration looked "encouraging with 155 metres of potential tight oil and gas pay" found.
Tight oil and gas pay is a more detailed version of the mud-log analysis previously disclosed.
Pay refers to the section of rock that shows signs of containing oil or gas and tight refers to how freely it flows through that section of rock. The results should show just how much petroleum is in that section and the best way of getting it out.
It is expected another well site in Tararua, at Mangahei near Dannevirke, will be drilled early next year.
- © Fairfax NZ News