Oil Company Could Become Major Producer In Egypt

TAG Oil Ltd. (TAO: TSX.V; TAOIF:OTCQX) has commenced drilling its first horizontal well, BED4-T100 (T100), in the Badr oil Field (BED-1) in the Western Desert of Egypt, and has set surface casing at ~1,250 meters.

 Located on the Abu-Roash F (ARF), it is intended to target an unconventional tight, carbonate reservoir at a projected total vertical depth of 3,300m. TAG decided to spud the T100 well after conducting geological and geophysical studies with the assistance of the company's development team. TAG believes that the T100 well will be ready by Q4 2023. The company will continue to put out updates on drilling and project completion. 

The T100 drilling program is an important step forward for TAG. The design is made up of a vertical pilot assessment well for potential coring, open hole logging, formation imaging, pressure measurement, and fluid sampling.

Additional features of the well's design include a cement plug-back of the lower vertical pilot hole and whip-stock drilling.

Using what it learned during the drilling of the T100 well as well as other geological work and 3D seismic interpretations, TAG designed the well completion and fracture stimulation program.

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."

The results from the T100 well will be used to design future drilling plans, which the company expects to begin by Q1 2024.

TAG also put out the company's results for the period ending on June 30, 2023, on August 29, 2023. TAG has posted this information on its website. According to TAG, the company had acquired CA$15.5 million in cash and CA$17.9 million in working capital by March 31. The company reports that it is not in debt. It recently finished a public offering worth CA$11.7 million.

The company has provided a summary of its drilling progress. According to TAG, the company has also determined 1,250m of surface casing and has begun drilling. TAG will continue to provide updates about drilling on the Abu Roash F.

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 In early August, the Biden administration rescinded a deal to buy 6 million barrels of oil as prices are expected to rise after an output cut from Saudi Arabia.

Bill Newman of Research Capital Corp. is also bullish on the company and predicted a possible 93% return for investors in a June research note.

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 the 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 in a June research note. 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

Management and insiders own 27.14% of the company. 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.

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.

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$0.58.

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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