TAG set to open office as drilling intensifies

TAG's Napier office will oversee more wells in early 2014

TAG oil is opening an office in Napier and will recommence drilling in the new year.

The Canadian oil company recently drilled the Ngapaeruru-1 exploratory well east of Dannevirke and TAG chief operating officer Drew Cadenhead said early signs were positive, but more exploration and analysis was needed. "We have said before this a methodical, step-by-step process and there is much more work to be completed before we know if the potential of the East Coast basin is commercially viable," he said.

The Napier office will be headed by Alexandra Johansen, a senior geologist with TAG who has been working on the company's East Coast permits for several years.

Working with her will be North American oil and gas experts Stephen Dutnell, and David Cornue. A fourth person will be added to help with permitting and consenting.

Mr Cadenhead said Mr Duntnell and Mr Cornue had a combined experience of 57 years, in all facets of oil and gas exploration and development.

They have experience with the 520,000sq km Bakken formation, which has become one of the biggest sources of oil in the United States thanks to the practice of hydraulic fracturing (fracking) - the cracking of oil-bearing rock with water so that oil flows freely to the well. The North Island's East Coast rock formations have been likened to Bakken.

TAG has not sought to frack in its Hawke's Bay or Gisborne wells.

Its Napier office will oversee more wells in early 2014, following completion and production testing of the Ngapaeruru-1 well, which intersects 155m of petroleum-bearing rock.

Cuttings from the wells will be transported to Taranaki, where they have found a lucrative use called land farming. The cuttings can improve the ability of sandy soils to hold nutrients.

Fonterra will no longer accept milk from six dairy farms on land-farmed soil, citing the high cost of testing for contaminants, but Federated Farmers said it was a safe practice.