TAG keen to remove oil mystery

The fierceness of anti-oil exploration protests has surprised many in our oil-dependent economy. Last week, Canadian company TAG Oil called the findings in its first exploratory well in Hawke's Bay as "very exciting" - strong words for a publicly-listed company.

Patrick O'Sullivan asked TAG's chief executive Garth Johnson some questions

1 Why is TAG excited about last week's mud gas find east of Dannevirke?

We are very encouraged. Until this first well was drilled on this area of the East Coast, we had nothing to compare our modelling to. It's good to get some physical evidence to compare with our model. The initial "shows" prove the "source rocks" are producing oil and gas in the areas predicted.

As importantly, drilling showed an impermeable rock seal above and below the oil and gas producing rocks.

2 Who conducts the analysis of the samples and what is the time frame for a decision on what to do next?

The samples taken from Ngapaeruru-1 were sent to an independent laboratory.

We took a cautious approach in drilling, as others drilling elsewhere on the East Coast encountered high-pressured gas.

We used heavy drilling mud to control any gas encountered. This mud may mask what oil and gas concentrations are present so it will take months to analyse and then to decide what we do next.

3 Can TAG handle developing petroleum finds on the East Coast, similar to the scale of Taranaki, by itself?

Yes, and it can be done methodically in stages. TAG is well placed to carry out the exploration stages and early development of any commercial discoveries.

Our development success in Taranaki has followed a similar path. We may have options to bring in partners in the future but it's too early to know at this point.

4 Are you surprised at the activity of anti-oil exploration environmentalists on the East Coast?

We are actually pleased with the support received from the majority of people.

People are looking at facts and are interested in the industry. Support is often provided privately because of the concern related to the reaction from anti-oil activists. These supporters are the majority, realising that operations are safe and provide significant benefits to their community.

We often hear: "Good on ya and keep up the good work, we need the jobs to keep our families home."

We understand people may fear what they don't know and oil exploration is new to the East Coast.

We appreciate that people on the East Coast haven't seen our industry develop successfully as Taranaki residents have and we try to remove the mystery through transparent engagement and using pictures of operations to show what it really looks like.

We ask that people conduct their own due diligence and compile facts using credible information to make decisions.

5 Are there misunderstandings over the East Coast oil exploration programme or have talks with stakeholders been effective?

Certainly. We are not planning "thousands of fracking events" as we saw in one report.

In fact none are planned. The best-case scenario is we never have to do one.

If commercial discoveries are made, there will not be hundreds of wells among the countryside.

We have found that when we sit down face-to-face and talk with people the feedback has been very positive.