TAG Oil Ltd. (TAO: TSX.V; TAOIF:OTCQX) has announced that it commenced drilling on its first horizontal well, BED4-T100, in the Badr oil field (BED-1) in the Western Desert of Egypt, and the well is currently through a depth of 600m. The well will target oil in the Abu-Roash F (ARF) unconventional tight, carbonate reservoir at projected depth total vertical depth of 3,300m. The decision to spud the T100 well is the result of careful planning and comprehensive geological and geophysical studies conducted by TAG Oil's experienced unconventional development team. The company anticipates that the T100 well will be completed by calendar Q4 2023, and detailed drilling and completion updates will be provided in due course.
"[TAG's success] would change politics forever. Egypt would become a major oil producer."
Commencing the T100 drilling program marks a significant milestone in the company's operations and ongoing commitment to unlocking the ARF reservoir's potential in BED-1. The T100 well design includes a vertical pilot assessment well for potential coring, open hole logging, formation imaging, pressure measurement and fluid sampling, followed by cement plug-back of lower vertical pilot hole and whip-stock drilling of build and lateral horizontal sections in the ARF reservoir. Information obtained during the drilling of the T100 well, including mud logging and drill cuttings to assess the reservoir quality across the lateral section, will be used in conjunction with the work completed on the geo-mechanical properties and 3D seismic interpretation in the area to design the well completion and fracture stimulation program. Performance from the T100 well will be used for planning and executing future drilling plans that the company expects to initiate by calendar Q1 2024.
TAG also reports that it anticipates filing its fiscal Q1 2024 financial results by August 29, 2023. A copy of TAG Oil's financial statements, and management discussion and analysis for its fiscal Q1 2024 period will be available on the company's website.
Oil Prices Rising
Oil prices are expected to rise with no end in sight. In early August, the Biden administration rescinded a deal to buy 6 million barrels of oil as prices are expected to rise after an output cut from Saudi Arabia. A spokesperson from the Energy Department reported that the decision was made based on the current market, where cuts in production had caused oil prices to rise to over US$80 per barrel.
On August 18, 2023, Reuters reported that Europe's natural gas storage is almost full, but that this still may not be enough to see the region through the winter. Consumer countries have been trying to find solutions, but oil supply continues to constrict.
Analysts Bullish on TAG
Chen Lin, author of What is Chen Buying? What is Chen Selling?, is bullish on TAG Oil. He commented that "[TAG's success] would change politics forever. Egypt would become a major oil producer."
Bill Newman of Research Capital Corp. is also bullish on the company and predicted a possible 93% return for investors. He put down a target price of CA$1.35 on TAG, which currently trades at about CA$0.70 per share.
Ownership and Share Structure
Askar Alshinbayev owns 18.78% of the company with 29.99 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, Tony 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.
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.
There are 159.74 million shares outstanding, and 102.77 million free float traded shares. The company has a market cap of CA$67.23 million. It trades in the 52 week period between CA$0.39 and CA$0.79.
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