Oil Company Provides Encouraging Look at Past Fiscal Year

TAG Oil Ltd. (TAO:TSX.V; TAOIF:OTCQX) has revealed information that illustrates the company's performance and accomplishments. The company has filed financial statements, management discussion and analysis, and an annual information form for its most recently completed financial year ending in March 31, 2023.

The highlights of this information include that the company had CA$19.5 million in cash and cash equivalents and CA$21.6 million in working capital. The company had no debt. TAG Oil is focusing on business and development efforts in Egypt, as well as other parts of the Middle East and North Africa (MENA) region.

The company's preliminary BED 1-7 vertical well test of the Abu-Roash "F" (ARF) reservoir in the Badr Oil Field was successful. TAG's team gained knowledge and experience with operations in the Western Desert of Egypt that will be utilized for the first horizontal well, BED4-T100. Since the beginning of production, the BED 1-7 well has produced 6,000 barrels of 23-degree API oil.

After the BED1-7 well tests, the company secured a suitable drilling rig for the T100 in BED-1 horizontal well, which is designed with a multi-stage fracture stimulation completion of the ARF formation. The company has since commenced mobilizing the rig to the T100 location at BED-1 and drilling is scheduled to commence drilling in August. The company will continue to provide updates about drilling.

Oil from MENA on the Rise

Oil production from the MENA region has picked up to fill the gap left by curtailing Russian exports. Iran's crude oil exports exceeded 1.5 million barrels per day in May, a record since 2018.

According to Reuters, "The rise from Iran comes as OPEC+, which includes OPEC, Russia and other allies, is cutting output to support the oil market, where expectations that economic weakness will dent demand have pressured prices." In early June, OPEC+ agreed to limit its oil output ahead of 2024, but Iran has an exemption.

A Strong Option for Investors

According to analyst Bill Newman of Research Capital Corp., "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%."

TAG is focused on the exploration and development of later-life conventional assets, and its utilization of advanced technologies and unconventional experience to drive production makes it unique in the oil and gas industry.

The company's plan for the future is to focus on producing oil and generating cash flow off of its larger, more complex assets. TAG management has a history of building companies to sell, such as Bankers Petroleum, Rally Energy, and Kuwait Energy. The company is expects the completion of its second horizontal well in December 2023 or January 2024.

Ownership and Share Structure

Management and insiders own 18.36% of the company. Askar Alshinbayev owns 10% of the company with 16.99 million shares. Abdel Fattah Z. Badwi owns 3.36% with 5.38 million shares. Shawn Reynolds owns 1.49% with 2.38 million shares. Suneel Gupta owns 0.99% with 1.59 million shares. Toby Robert Pierce owns 0.95% with 1.51 million shares. Barry MacNeil owns 0.85% with 1.36 million shares, and Gavin Hugh Lothian Wilson owns 0.72% with 1.15 million shares.

Institutions own 10.93% of the company. YF Finance Ltd. owns 8.14% with 13.01 million shares. Purpose Investments Inc owns 2.15% with 3.44 million shares, and Novum Asset Management AG owns 0.64% with 1.02 million shares.

The company reports that it has CA$24 million in the bank and a monthly burn rate of CA$400k per month.

The company reports no potential sellers. There are 6.25 million warrants which represent 4% of the shares.

There are 159.74 million shares outstanding, with 115.77 million free-float traded shares. The company has a market cap of CA$78.35 million. It trades in the 52-week period between CA$0.34 and CA$0.79.

Important Disclosures:

1. TAG Oil Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. 
2. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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