TAG Oil receives drilling approval for New Zealand oil and gas field

TAG Oil has received approval to drill 18 new wells in its Cheal oil and gas field in Taranaki, New Zealand.

The firm received approval from the Taranaki Regional Council and Stratford District Council, which is subject to an appeal process that must be lodged within 15 days.

If an appeal in not filed, TAG Oil will resume drilling operations at Cheal on 16 December 2011.

TAG Oil has also entered an agreement with drilling and exploration firm Petra Drilling to acquire rights to the drilling unit.

TAG will provide secured financing for Petra to acquire and deliver the fully automated VR500 rack and pinion, top-drive drill rig to New Zealand.

In exchange, TAG has secured a fixed price for future drilling, and first right of refusal on use of the rig until all financing has been repaid.