TAG Oil Ltd. (TSXV: TAO) (OTCQB: TAOIF) (FSE: T0P) has announced a multi-stage acid stimulation and production testing program for its T-200 vertical well at the Badr Oil Field in Egypt's Western Desert. The company disclosed that initial well unloading indicated restricted flow, likely caused by near-wellbore formation damage from the overbalanced drilling mud system used during drilling. The planned treatment — comprising an acid wash, injectivity test, and high-pressure acid stimulation — is expected to take approximately two weeks to complete. Investors may be watching the outcome closely, as results will determine reservoir deliverability at the Abu Roash "F" carbonate target.

Key Points

  • TAG Oil Ltd. (TSXV: TAO) (OTCQB: TAOIF) (FSE: T0P) is a Canadian-based international oil and gas exploration company operating in Egypt's Western Desert.
  • TAG Oil is proceeding with acid wash, injectivity testing, and high-pressure acid stimulation at its T-200 well targeting the Abu Roash "F" carbonate reservoir.
  • The full stimulation and testing program is expected to take approximately two weeks; no production rate or cost figures were disclosed in the announcement.
  • Investors should watch for TAG Oil's post-stimulation update, which will assess stabilised production rates and reservoir deliverability.

Restricted Flow at T-200 Attributed to Near-Wellbore Formation Damage

TAG Oil reported that drilling and log data from the T-200 well confirmed an oil-bearing Abu Roash "F" reservoir with encouraging porosity and natural fracture development. However, the release states that initial well unloading and testing indicated restricted flow, which the company attributes to near-wellbore formation damage caused by invasion of drilling fluids from the overbalanced mud system used to maintain safe drilling conditions. The company notes this is a common occurrence in carbonate reservoir drilling and does not necessarily reflect on underlying reservoir quality.

Acid Stimulation Program Tailored to ARF Carbonate Composition

To address the restricted flow, TAG Oil outlined a three-stage treatment plan: an acid wash, an injectivity test, and a high-pressure acid stimulation. The company is currently analysing Abu Roash "F" drilling cuttings to develop an acid formula specifically suited to the reservoir's carbonate composition. The release states that acid stimulation is a customary completion practice in carbonate reservoirs and has been required in relevant offset wells before production was established, lending precedent to the planned approach at T-200.

Re-Testing to Establish Stabilised Production Rate and Guide Completion Strategy

Following the acid stimulation, TAG Oil plans to re-test the T-200 well and monitor pressure and production performance to establish a stabilised production rate and assess reservoir deliverability. According to Executive Chairman and CEO Abby Badwi, results will guide the optimal completion approach for the Abu Roash "F" reservoir, including the potential follow-up drilling of a short, fracture-stimulated horizontal leg. The company confirmed it will issue a further update once the stimulation and testing program is complete. The immediate share price impact was not clear from available public information.