TAG Oil provide an updates on operations and a strategic new Egypt acquisition to expand their unconventional and conventional acreage position.

Badr Oil Field (“BED-1 Concession”) 

Production from the BED4-T100 (“T100”) horizontal well is averaging 200 barrels of fluid per day and 35 percent water. Operation of the T100 well has been intermittent for the last two months as the reservoir extent was assessed through pressure build-up analysis and the lift system optimized. The T100 well initially produced under natural flow and subsequently with a jet pump to recover the large volumes of fracture fluid containing sand. The T100 well is now equipped with a sucker rod pump for long term stable production. Cumulative oil production of the T100 well to date is in excess of 15,000 barrels and shipments have commenced to third party facilities. Further evaluation by the Company is also underway of fluid samples, drill cuttings, and tracers as they flow back, to inform performance of stimulated sections along the horizontal lateral and further optimization potential on the T100 well. 

With the successful proof of concept of producing commercial oil volumes from the unconventional Abu Roash “F” reservoir (“ARF”) in the BED-1 Concession, current development plans include returning the previously completed and produced BED1-7 vertical well to production following an extended pressure build-up analysis. The well will be set up with a sucker rod pumping system, similar to the T100 well, during the fourth quarter. In addition, several new drilling locations have been identified for an additional one or two vertical wells in Q1-2025 targeting high intensity natural fractured areas that can potentially produce at good initial oil volumes. Planning of a second horizontal well is also underway and is planned for drilling in Q2-2025. 

NEW EGYPT ACQUISITION

TAG Oil has received a “No Objection Letter” approval from an industry operator in Egypt to the Company’s proposal to acquire a significant interest in their sizable concession in the Western Desert, Egypt. TAG Oil engaged in evaluating the Concession earlier this year and submitted a binding proposal in the second quarter. The farm-in agreement contemplates standard farm-in terms and is subject to certain conditions and other regulatory approvals. 

The target Concession covers an area of approximately 2,000 km2 (512,000 acres) in the Western Desert, nearly 20 times larger than the 26,000-acre BED-1 Concession. Of specific interest is the unconventional ARF oil formation that is present covering a large portion of the targeted Concession with indications of very good ARF reservoir properties, similar to the BED-1 Concession, which has estimated oil-initially-in-place of 532 MMbbl assigned to the ARF unconventional resource play 1. Completing this acquisition will expand TAG Oil’s footprint on this significant unconventional resource play in Egypt, as well as adding immediate conventional production and upside in proven reservoirs. 

The area has excellent coverage of 2-D and 3-D seismic and contains several producing and available oil wells with upside potential for completion and production optimization in conventional light oil reservoirs. Several prospective drilling locations and side-track opportunities have also been identified on 3-D seismic. 

The Company will continue to provide updates on the approval process and details of the final definitive agreement as they become available.

[1] Source: Independent resource evaluation of the ARF formation in BED-1 Concession dated November 21, 2022, prepared by independent qualified reserves evaluator, RPS Energy Canada Ltd., with an effective date of March 31, 2022.

KeyFacts Energy: TAG Oil Egypt country profile   l   KeyFacts Energy: Farm-in agreements

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