Production Test Results of Co.'s Oil Well Positive
Research Report

TAG Oil Ltd.'s (TAO:TSX.V; TAOIF:OTCQX) testing of the BED 1-7 vertical well in Egypt produced strong results, reported Research Capital Corp. analyst Bill Newman in a June 19 research note.

"The successful fracture stimulation of the Abu Roash F formation and the production test results are encouraging, and TAG will apply its learnings to the design of the new BED4-T100 (T100) horizontal well," Newman wrote.

93% Possible Return

Accordingly, Research Capital maintained its Speculative Buy rating and CA$1.35 price target on TAG, currently trading at about CA$0.70 per share, noted Newman.

This price difference implies a significant potential upside for investors of 93%.

Results Post Production Restart

The Canadian oil and gas company restarted production testing of BED 1-7 on May 19 after tubing and a downhole electric submersible pump were installed.

Upon recommencing, the well flowed 150–200 barrels per day (150–200 bbl/d) of fluid. As the well continued to produce the remaining fracture fluid, the oil cuts gradually increased over the first week.

"Over the past two weeks, production stabilized at an average rate of 140 bbl/d of oil, with about a 5% water cut, through a 10/64-inch choke," Newman reported.

To date, BED 1-7 has produced 4,000 barrels of 23-degree API oil. TAG will continue to monitor it, on production, for the next 30–60 days.

Horizontal Well Could Be a Catalyst

Next, TAG plans to spud its first multi-stage fracture stimulation horizontal well, T100. This is slated to happen once the rig, already secured, is mobilized to the site. The rig is estimated to be there and ready in about mid-July. Drilling of the well start shortly thereafter.

In designing this well, the company considered two sets of results, from the BED 1-7 well and from the recent three-dimensional seismic survey.

"The T100 horizontal well should have between 15 and 20 fracture stages and, based upon the performance of the BED 1-7 vertical well, a test of over 1,500 bbl/d, which we believe could be a major catalyst for the stock," Newman wrote.

Important Disclosures:

1. Tag Oil Ltd. billboard sponsor(s) of Streetwise Reports and has paid SWR a sponsorship fee between US$3,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Tag Oil Ltd.
3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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Disclosures for Research Capital Corp., Tag Oil Ltd., June 19, 2023

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