Oil Company Provides Update on Drilling that Could Change Egypt

TAG Oil Ltd. (TAO:TSX.V; TAOIF:OTCQX) announced in a press release that it has an update on its drilling in the Western Desert of Egypt, where the company has constructed the T100 horizontal well, extending 300m through the Abu Roash "F" (ARF). The company reports that the T100 "encountered very good oil shows with high hydrocarbon gas readings and good indications of primary porosity."

The company has reported that while the drilling has been going well on the whole, they did encounter some technical issues with the drilling equipment. However, they have begun a drilling program that they expect to complete in December which aims to drill the intermediate cased section of the property.

The company also has news of the BED 1-7 well, which TAG reports has achieved 10,000 barrels of oil cumulatively and is undergoing tests regarding the reservoir pressure.

Potential to Move Over US$150 Per Barrel

According to Larry Elliott with The Guardian, oil prices have the potential to move up to over US$150 per barrel as a result of global unrest. Elliot believes that if tensions escalate, the oil market could be looking at a situation resembling the oil crisis of the 1970s.

Bill Newman of Research Capital Corp. reviewed the company on September 9, 2023, where it rated the company as a "Speculative Buy."

Michelle Chapman with The Associated Press also reported on the way in which Chevron's US$53 billion deal to buy Hess Corp. could affect the market as oil prices rise.

According to Chapman, oil prices initially rose after the start of the conflict in Ukraine in 2022 and continued to rise by 9% in 2023.

The report states that "the acquisition of Hess adds a major oil field in Guyana as well as shale properties in the Bakken Formation in North Dakota," adding significant value to Chevron's portfolio as oil prices trend upwards.

Chen Lin Predicts "They Would Change Politics Forever"

Bill Newman of Research Capital Corp. reviewed the company on September 9, 2023, where it rated the company as a "Speculative Buy" and named a target price of CA$1.25 per share and a potential return on investment of 116%.

Newman cited the company's current drilling on T100 and the location of its property over an oil reservoir as factors in his assessment. Newman commented that the company is "targeting a big prize."

Chen Lin also stated that he favored TAG Oil as an investment, especially their horizontal oil well.

Bill Newman of Research Capital Corp. reviewed the company again as a "Speculative Buy," on November 15, 2023, and restated his target price of $1.25. He again cited the company's progress on the T100 well as a positive factor driving his assessment of the company. He did, however, note delays in drilling as a risk associated with the company.

On November 9, 2023, Jon Brown of The Market Herald commented "Egypt is becoming a major player in the oil game, and TAG Oil Ltd. is in a prime position to capitalize on this potential... the company is entering a very active period in the coming months, with its main focus on the T100 well and developing the field more generally."

Chen Lin also stated that he favored TAG Oil as an investment, especially their horizontal oil well.

According to the report, he predicts a significant impact on Egypt if the company's drilling is successful: "They would change politics forever. Egypt would become a major oil producer."

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own 29.47% of the company.

Askar Alshinbayev owns 18.78% of the company with 29.99 million shares, Director Shawn Reynolds owns 3.76% of the company with 6.01 million shares, Executive Chairman Abdel Fattah Z. Badwi owns 3.36% of the company with 5.38 million shares, CEO Toby Robert Pierce owns 1.01% of the company with 1.61 million shares, Vice President and COO Suneel Gupta owns 0.99% of the company with 1.59 million shares, CFO Barry MacNeil owns 0.85% of the company with 1.36 million shares, and Director Gavin Hugh Lothian Wilson owns 0.72% of the company with 1.15 million shares.

Reuters reports that institutions own approximately 11.2% of the company, as YF Finance, Ltd., owns 8.14% of the company with 13.01 million shares, Purpose Investments Inc. owns 2.42% of the company with 3.86 million shares, and Novum Asset Management AG owns 0.64% of the company owns 1.02 million shares.

According to Reuters, there are 159.74 million shares outstanding and 98.92 million free float traded shares, while the company has a market cap of CA$60.67 million and trades in the 52-week period between CA$0.34 and CA$0.59.

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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