TAG Oil Files Third Quarter 2008 Results
February 29 2008 - 1:00PM
PR Newswire (US)
VANCOUVER, Feb. 29 /PRNewswire-FirstCall/ -- Independent Canadian
oil and gas production and exploration company TAG Oil Ltd. (TSX-V:
TAO and OTCBB: TAGOF) announced today that the Company has filed
its third quarter 2008 financial statements along with the
accompanying management's discussion and analysis as required
pursuant to National Instruments 51-101 and 51-102. Copies of these
documents can be obtained electronically through the SEDAR system
at http://www.sedar.com/ or through the Company's website at
http://www.tagoil.com/. Summary of selected financial information:
TAG started the 2008 fiscal year with $13.43 million in cash and
cash equivalents and ended the third quarter with $6.29 million at
December 31, 2007 with the decrease in cash resulting materially
from capital expenditures related to the Cheal oil field
facilities. Shareholders' equity at quarter end was $32.02 million
(March 31, 2007: $40.13 million). During the third quarter TAG
recorded $1,238,819 in production revenue (9 months: $2,921,973)
from its 30.5% interest in the Cheal oil field that produced 38,814
(9 months: 115,396) gross barrels of oil and sold 44,997 (9 months:
113,936) gross barrels of oil, with associated gas produced at
Cheal to generate electricity on-site. Daily production rates for
the third quarter averaged approximately 422 barrels of oil gross
per day and currently the field is cycling oil from six different
wells, seeking optimum production configurations. The loss recorded
for the quarter was $6,596,933 ($0.07 per share) (9 months:
$8,182,530) ($0.09 per share) and included production costs and
royalties amounting to $462,056 (9 months: $1,026,191) and $54,766
(9 months: $141,422), respectively as well as a one-time write-down
for the quarter amounting to $6,342,933 that relates to certain
exploration interests of the Company. Other significant
contributors to the loss included depletion of $495,547 (9 months:
$1,045,837), general exploration costs of $87,712 (9 months:
$479,892) and a foreign exchange loss of $188,290 (9 months:
$1,373,180). General and administrative costs for the quarter
amounted to $421,921 (9 months: $1,585,634) which is slightly lower
than the comparable quarter last year. Cheal Operational Update The
Cheal Production Facility (TAG: 30.5%) is now completed and is
fully commissioned with six wells capable of production. Following
several months of production through temporary facilities, the
three "B-Site" wells were shut-in on October 2, 2007 to allow the
construction and tie-in of permanent flowlines back to the facility
located at the "A-Site". Production continued through the remainder
of October and November from Cheal A-3X and A-4 and over these two
months production totals were 10,652 bbls (TAG share: 3,249 bbls)
and 9,125 (TAG share: 2,783 bbls), respectively. Commissioning of
the "B-Site" commenced on December 4, 2007, with Cheal B-3
production being brought on through permanent facilities on
December 6, 2007 and Cheal B-2 on December 21, 2007. Production for
the month of December totaled 19,037 bbls (TAG share: 5,806 bbls),
the highest monthly total from the field to date, with daily
production up to 791 bbl/day (TAG share: 241 bbl/d). Initial flush
production decline, as well as a cycling plan intended to maximize
ultimate recovery of the field, has subsequently resulted in recent
production rates of approximately 500 bbls/day gross. Gas export
from the field commenced on December 21, 2007 with a total of 2.830
mmscf being exported to the Waihapa Production Station. Subsequent
to the quarter end, Cheal A3X and Cheal A4, which had temporary
connections to the production facility, have now been permanently
connected and are available for long term production. Further
increases to daily oil production will require additional wells to
be successfully drilled along with further workovers potentially
required on Cheal A3X and A4. The Company is currently in
discussions with the operator of the permit to resolve the matters
relating to the significant project revisions made to the
development plan by the operator as well as to agree to a suitable
forward work program at Cheal. Commenting on the Cheal operational
results, Garth Johnson, Chief Executive Officer, said: "We're glad
to have the Cheal Facility fully commissioned, producing oil and we
expect to finish the 2008 fiscal year strongly with consistent oil,
gas and associated liquids production from the Cheal A and B sites
for the first time since this project began. Oil prices remain
robust, positioning TAG with ongoing cash flow, working capital and
no debt. We look forward to leveraging this position as we grow the
Company." Forward-Looking Statements: Statements contained in this
news release that are not historical facts are forward-looking
statements that involve various risks and uncertainty affecting the
business of TAG Oil. Actual results may vary materially from the
information provided in this release. As a result 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. Actual results may differ materially from the results
predicted, and reported results should not be considered as an
indication of future performance. Factors that could cause actual
results to differ from those contained in the forward-looking
statements, are set forth in, but are not limited to, filings that
the Company and its independent evaluator have made, including the
Company's most recent reports in Canada under National Instrument
51-102 and in the United States under Forms 20-F and 6K. About TAG
Oil: TAG Oil Ltd. is an independent Canadian oil and gas
exploration and production company with international operations in
the Taranaki Basin of New Zealand. The TSX Venture Exchange has not
reviewed and does not accept responsibility for the adequacy or
accuracy of this release. CONTACT: Garth Johnson, , (604) 609-3350
DATASOURCE: TAG Oil Ltd. CONTACT: Garth Johnson, , (604) 609-3350
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