Source: Bill Newman
March 3, 2023 (Investorideas.com Newswire) The oil and gas firm will use these new data, when available, to design a horizontal well in the same Egyptian formation, noted a Research Capital Corp. report.
TAG Oil Ltd. (TAO:TSX.V; TAOIF:OTCQX) provided an operational and financial update, highlighting that vertical well test results are expected this month, reported Research Capital Corp. analyst Bill Newman in a March 1 research note.
Vertical Well Data Imminent
Regarding its efforts in the Badr Oil Field (BED-1) of Egypt's Abu Roash "F" reservoir, the Canadian energy company started recompletion of the BED 1-7 vertical well there. Now, TAG is preparing to stimulate this well, on schedule for next week. Results of subsequent flow testing are to follow, sometime this month.
TAG will use these data to design its first horizontal well targeting the ARF formation, noted Newman. The company expects to stud this new well in May or June of this year and then follow up with the spudding of a second horizontal well in late Q4/23 or Q1/24.
Large Resource Potential
Newman reiterated the significant resource potential the ARF reservoir holds and what that means for TAG.
An independent resource evaluation prepared by RPS Energy Canada and effective March 2022 indicates that over ARF's BED-1 concession, there are 531,500,000 barrels (531.5 MMbbl) of oil initially in place, relayed Newman. The east-central part of BED-1 contains 178.3 MMbbl of oil initially in place.
Further, TAG's plan to develop 20 horizontal wells in the formation's east central area equates to a risked contingent recoverable, or 2C, resource, according to RPS, of about 16.5 MMbbl net to the oil and gas explorer-developer.
"The risked, after-tax net present value discounted at 10% for the 2C resource is US$339M, equal to US$2.93 per share," wrote Newman.
Impact on Share Price
In his report, Newman again pointed out that if TAG has success with its vertical and horizontal well programs, it could convert a large portion of its 2C resources to the Proven and Probable category. Such an upgrade would likely move boost TAG's share price.
Currently, the oil and gas firm is trading at about CA$0.67 per share, and Research Capital's target price on it, in comparison, is CA$1.35 per share, Newman noted. Implied in this price difference is a roughly 101% return for investors, and TAG is a Speculative Buy, according to Research Capital.
Strong Balance Sheet
As of Dec. 31, 2022, the end of Q3 of the fiscal year 2023 (Q3 FY23) for TAG, it had zero debt and US$24 million in positive working capital, including US$21.4M in cash and cash equivalents.
During Q3 FY23, the company spent US$4.5M on capex.
1) Doresa Banning wrote this article for Streetwise Reports LLC. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: TAG Oil Ltd. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of TAG Oil Ltd., a company mentioned in this article.
Disclosures for Research Capital Corp., Tag Oil Ltd., March 1, 2023
Analyst Certification: I, Bill Newman, CFA, certify the views expressed in this report were formed by my review of relevant company data and industry investigation, and accurately reflect my opinion about the investment merits of the securities mentioned in the report. I also certify that my compensation is not related to specific recommendations or views expressed in this report. Research Capital Corporation publishes research and investment recommendations for the use of its clients. Information regarding our categories of recommendations, quarterly summaries of the percentage of our recommendations which fall into each category and our policies regarding the release of our research reports is available at www.researchcapital.com or may be requested by contacting the analyst.
Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst's personal views and (ii) no part of the research analyst's compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report. Relevant Disclosures Applicable to Companies Under Coverage Relevant disclosures required under IIROC Rule 3400 applicable to companies under coverage discussed in this research report are available on our website at www.researchcapital.ca
General Disclosures: The opinions, estimates and projections contained in all Research Reports published by Research Capital Corporation ("RCC") are those of RCC as of the date of publication and are subject to change without notice. RCC makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; RCC makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained therein and accepts no liability whatsoever for any loss arising from any use of or reliance on its Research Reports or its contents. Information may be available to RCC that is not contained therein. Research Reports disseminated by RCC are not a solicitation to buy or sell. All securities not available in all jurisdictions.
Potential Conflicts of Interest: All Research Capital Corporation ("RCC") Analysts are compensated based in part on the overall revenues of RCC, a portion of which are generated by investment banking activities. RCC may have had, or seek to have, an investment banking relationship with companies mentioned in this report. RCC and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned in our Research Reports as principal or agent. RCC makes every effort possible to avoid conflicts of interest, however readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.
RC USA INC.: Information about Research Capital Corporation's Rating System, the distribution of our research to clients and the percentage of recommendations which are in each of our rating categories is available on our website at www.researchcapital.com. The information contained in this report has been drawn from sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in providing it does Research Capital Corporation assume any responsibility or liability. Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part without the express permission of Research Capital Corporation. US Institutional Clients – Research Capital USA Inc., a wholly owned subsidiary of Research Capital Corporation, accepts responsibility for the contents of this report subject to the terms and limitations set out above. US firms or institutions receiving this report should effect transactions in securities discussed in the report through Research Capital USA Inc., a Broker - Dealer registered with the Financial Industry Regulatory Authority (FINRA).
This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com