Business
Austral Pacific to Drill Two Wells in Cheal Oil Field
WELLINGTON, New Zealand, May 27 /CNW/ -- Austral Pacific Energy Ltd. (TSX-V: APX; NZSX: APX; Amex...
About this update from Apex Resources Inc.
[{"type":"text","content":"\n\n\n\nWELLINGTON, New Zealand, May 27 /CNW/ -- Austral Pacific Energy Ltd.\n(TSX-V: APX; NZSX: APX; Amex: AEN)\n\n\nAustral Pacific Energy Ltd. (Austral) is pleased to announce the upcoming\ndrilling of the A6 and A7 wells in the onshore Taranaki Cheal Oil Field\n(PMP38156-01), Stratford, New Zealand.\n\n\nThe new wells will target the same shallow oil producing Mt Messenger\nsands that are currently generating substantial revenue for the Cheal Joint\nVenture. It is anticipated that successful drilling will result in completion\nand tie-in in time to deliver increased oil production prior to year end 2008.\nThe Joint Venture has also reached agreement to undertake a comprehensive\nprogramme of technical studies to support the drilling of the Greater Cheal\nTrend.\n\n\nThe agreement to drill the wells is part of an arrangement between the\nCheal Joint Venture Parties to resolve disputed costs related to the\nconstruction of the Cheal Production Station. The agreement includes a full\nand final settlement of all claims, a commitment to drill the A6 and A7 wells\nas a joint operation and best efforts approach to creating a production JVOA\n(Joint Venture Operating Agreement) to guide future work programs.\n\n\nThe resolution includes a net payment to Cheal Petroleum Limited (a\nsubsidiary of TAG Oil Limited) of US$1.6 Million in a combination of cash,\nAustral stock and expected forward production from the A7 well. Subject to\nTSX-V approval, Austral will issue 2.273 million ordinary shares to TAG with\nanti-dilutive protection provided for a period of six months and in return TAG\nhas agreed not to dispose of these shares for a period of twelve months. In\naddition Austral has agreed to pay TAG NZ$300,000 and TAG has agreed to pay\nits NZ$600,000 share of the remaining Cheal facilities costs that were being\nwithheld pending a resolution to the dispute. In the event Cheal A7 is\nsuccessfully completed for production, TAG will receive an additional\nUS$250,000 payable in equal installments over twelve months.\n\n\nCommenting on the agreement to drill the wells, Austral CEO and\nPresident, Thom Jewell said, "We are pleased to have reached resolution on\nthis issue and to have the joint venture aligned on the upcoming drilling\nprogram. We are excited to be back to drilling.\n\n\n"Future drilling targets have been identif...