Tap Oil has outlined plans to participate in up to 25 wells in Australia and New Zealand during the next year, targeting total reserves of up to 100 million barrels of oil equivalent.
While the company’s production and revenue levels have grown substantially largely due to its Woollybutt field coming on stream last year, the company is now focussed on adding reserves via its drilling program.
Tap is also taking larger equities in new permits as part of its growth plans.
Tap Oil CEO Paul Underwood said the company had progressed significantly in the past 12 months but was not getting the market recognition it deserved, due to its recent focus on developing small oil fields in the past 18 months or so.
“In the last two years, we’ve spent a lot of time doing that type of work – exploiting low cost small oil targets and making a lot of money out of them, but the consequence of that is that we haven’t spent time exploring large targets,” he said.
“What the market is looking for is the appeal of a large reserve addition.”
The West Perth-based firm will commence drilling its six-well New Zealand program before the end of the month and expects to start drilling the first of at least 11 Australian wells in December.
Mr Underwood said Tap’s permit interests had grown with New Zealand accounting for about 50 per cent of exploration spending.
The most significant New Zealand well, and the company’s only offshore venture in New Zealand, known as Galleon South-1 or Barque-1, is expected to be drilled by mid-2006.
The target is a possible two trillion cubic feet of gas and 100 million barrels of condensate.
In Australia, Tap is targeting a mix of onshore and offshore wells starting with Boojum-1 in the Carnarvon Basin. Tap is operating this well at 50 per cent equity targeting a possible 10 million barrels of oil. Boojum-1 is located west of Airlie Island facilities in which Tap also has an interest. Cyrano-2 with Tap at 85 per cent is located east of Airlie Island.
“Tap has been around eight years now and has recently morphed into a different phase because our funding capacity has grown materially via strong production levels and hence cash flows,” Mr Underwood said.
“We have $72 million cash in the bank and no debt.
This places us in a position whereby we can develop new discoveries without issuing new shares and can take higher equities in new permits and wells: this increases our leverage to the success case.”
Mr Underwood said 2005 would be a busy year for the company with ongoing cash flows at high oil prices and a large drilling program with Tap participating in around 25 wells, operating 8.
In WA, Tap has ongoing production revenues coming from its interests in the Woollybutt, HJV and Kahili fields with the Woollybutt and Harriet fields having material near-term growth opportunities adjacent to existing production infrastructure.
