Tag Oil announced that the capital budget for FY18 dating 1 April 2017 to 31 March 2018 is approximately C$27.4 million, which will be funded entirely by forecasted cash flow and working capital on hand.
A further $8.4 million of incremental capital expenditures are contingent mainly on the status of locating suitable joint venture or farm-in partners and notable improvements in oil prices.
As the group enters the next phase of its reserve and production growth, the FY18 capital budget will be used to identify opportunities through ongoing geotechnical and engineering review of assets.
This includes drilling of two exploration wells at Sidewinder East (PEP 55769); drilling of two exploration wells at Cheal East (PEP 54877); drilling of one exploration well at Puka (PEP 51135); and continued appraisal of the Cardiff field.
In addition, Tag also plans to acquire seismic data on the Sidewinder North (PEP 57065) and PL-17 permits, as well as commercialize the Supplejack (PEP 57065) gas discovery.
CEO Toby Pierce said, “Tag is planning at least five exploration wells during fiscal 2018 into a range of oil and gas targets. In addition, we have a range of work-over and re-completion opportunities in both Australia and New Zealand. Given the stronger Brent oil price curve, our clean balance sheet and early indications of positive farm-out interest, we are planning to exit fiscal 2018 with a significantly stronger platform to grow off going forward.”