Tag Forges Ahead with Solid Well Test at Badr

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Disclosure: The following represents my opinions only. I am long TAO.V (Image credit to Inbal Malca on Unsplash)

It’s not easy blazing new paths, but it would appear that good things come to those who wait. After much handwringing by its shareholder base, Tag Oil (TAO.V, last at $0.55) stepped up and delivered the goods this morning. TAO reported a headline test rate of 800 bopd and an implied total fluid rate of 1,140 bpd, with an oil cut that was already at 70% and rising as the BED4-T100 well continues its post-stimulation cleanup phase. Based on what TAO has reported, a total fluid rate of ~1,140 bpd is implied by the news release — and total fluid rate is the key — because as the well cleans up, those frack fluid barrels will be replaced by oil barrels. The reported 800 bopd represents 70% of the total fluid being produced, thus meaning that they were also flowing back about 340 barrels of frack fluid at the time… and the oil cut, and the total oil rate, would be expected to continue to rise (towards the total fluid rate) as the balance of the frack fluid is recovered from the well over the next 2-3 weeks (23% of the frack fluid has been recovered so far during clean up… usually about 50% of the frack fluid is ultimately recovered). After the well is cleaned up, the company will run production tubing into the well +/- artificial lift… changes that could be expected to increase the production rate further towards the 1200-1500 bopd range. The company will host a call to discuss the test results further tomorrow (Friday) morning at 10AM Eastern time.

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