Could Tag Oil be the next ‘It’ stock?

20-Oct-2010 | kate | Commodities New Zealand Oil & Gas Stocks

Tag Oil is a “pure play” exploration and production company that has over 2 million acres in the Taranaki Basin of Northern New Zealand. The basin is a mature proven producing basin that when compared to Canada is highly unexplored. Across two of their 100% owned acre blocks holds an estimated 100 million bbl of original oil in place. Their East Coast Basin is seen as “game changing” play for Tag as it is literally “leaking oil an

d gas”, and holds similar characteristics to both the Bakken and Paris Basin Liassic. The East coast basin has the potential for 12.7 billion barrels of unconventional and 1.7 billion barrels of conventional oil.

TAG also holds a major gas resource in Taranaki Basin called Cardiff and will be applying a multi stage frac to access the reserves. Natural gas prices in New Zealand have been rising steadily and are currently around NZ$9.25/MCF which is roughly equal to $7.00 American.

TAG is currently producing 490 boe/d and is expected to reach 1000 boe/d within three to four months.

TAG recently did a $20 million financing and since has been working on initiating several work programs to be carried out from the remaining 2010 ye

ar into 2011 in the Cheal and Broadside blocks within the Taranaki Basin. Their strategy is to continue building oil production and cash flow through lower risk development and exploration projects prior to exploration activity plan for 2011 in the East Coast basin.

TAG stock price has been moving steadily since September when it was trading around $2.50. TAG oil was trading at $4.90 at 10:28am MT today.

TAOchart

TAG Oil Chart

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