TAG Oil achieves first oil production in Egypt’s Western Desert

(WO) – TAG Oil Ltd. announced the successful re-entry of the vertical well, BED 1-7, at the Badr oil field in the Western Desert, Egypt. The company perforated the Abu Roash "F" formation ("ARF Formation") and conducted a Diagnostic Fracture Injectivity Test (DFIT). The reservoir was further fracture stimulated with a large 110 tons sand treatment and pump schedule with positive response confirming reservoir models and projected performance.

On flowback, the well unloaded to surface under natural flow and cleaned up approximately 40% of the injected fracture fluid with significant presence of 230 API oil. Net cumulative oil produced during the short flowback was in excess of 500 bbl, which was connected to a flow-line to the BED-1 field's production facilities and onward into sales pipeline.

The well was shut-in to remove the frac string, install 3.5" production tubing string and down-hole Electric Submersible Pump (ESP) to achieve steady production at stabilized oil rates. The well is expected to be on production within the next few days and the company expects to announce 30-day rates from the well in mid June.

Data collected from the well along with geomechanical and 3D seismic review has enhanced TAG’s horizontal well design. Plans are underway to secure a drilling rig to drill the first horizontal well designed with a multi-stage fracture stimulation. All necessary permits have been secured and site construction is underway. The well is expected to spud next month.

Toby Pierce, CEO of TAG Oil, commented, "This activity is the first step to establish oil production from the ARF Formation, an oil rich source rock that covers a significant portion of the 107 Sq. Km. BED-1 concession.  Production results confirms the economic feasibility of this important resource play in the Western Desert of Egypt."