Looking at Slide 18 of the NZEC presentation I am wondering: Why isn`t there a Tag Oil production facility shown?
This is a quote from TAO’s letter to the shareholders dating July 29th 2011. “We now produce approximately 950 BOE per day, with an anticipated production ramp-up past 5,000 BOE per day from our current "behind-pipe" production capability at our Cheal and Sidewinder oil and gas fields. These newly discovered oil and gas reserves are only awaiting Cheal's artificial lift system expansion and the Sidewinder Production Station commissioning, both on schedule to occur in coming months.”
I understood from the above mentioned letter that the facilities cost $35 million and would at least accommodate the 950 BOE + the above mentioned 5,000 BOE adding up to roughly 6,000 BOE (minimum?) -> $6,000/1 BOE – This seems a lot to me! But I have nothing to compare with. Unfortunately we still have production restrictions because of a lack of production facilities. Although the production ist still under 6000 BOE. And TAO announced to build more production facilities in 2012.
The Waihapa production station is described as a 25,000 bbl/d oil processing facility with 7,800 bbl oil storage capacity.
NZEC's purchase price for the acquisition of the Waihapa production station (including all the other assets) was $42 million. Comparing this to the Sidewinder Production Station seems to be a steal. Any thoughts?