Sequel previous update as reported in the November 15,TAG Oil has further released a drilling progress of the BED4-T100 horizontal well in the Badr Oil Field (BED-1) in the Western Desert of Egypt.

Drilling has continued from the intermediate cased section of the well and reached a measured depth of 3,312 meters in the Abu-Roash “F” (ARF) at hole angle of 90 degrees. However, geo-mechanical hole stability concerns in the upper section of the hole in the Abu-Roash “E” (ARE), an over-pressured formation with layered carbonate and shale lithology changes, was coupled with mechanical issues with the drilling rig mud system. This provided challenges to condition the build section of the hole past 3,200 meters to be able to run the casing liner, and multiple attempts to drill out past this point and continue into the ARF target reservoir were encumbered.

The Company elected to plug back this hole section, initiate repairs of the drilling rig shale-shakers and tanks on the rig mud system, and review drilling procedures to isolate the ARE zone of the hole and landing the casing liner in the ARF carbonate reservoir zone prior to proceeding with drilling the lateral.

Next steps include re-drilling from the intermediate cased section of the T100 well at approximately 2,650 meters with an oil-based mud system and adjusting the directional drilling services and tools with the goal of drilling a smoother, stable build section in the ARE and isolating it prior to drilling the ARF lateral section.

As previously disclosed the ARF target reservoir in the T100 vertical pilot well and in the initial lateral section encountered very good oil shows with high hydrocarbon gas readings and good indications of primary porosity. These drilling challenges are not projected to impact the prospect of the ARF resource oil play.

Repairs on the drilling rig and planning for the next leg are underway and completion of the drilling phase is projected to be done next month. The drilling rig will then be released and a rig-less well completion phase with fracture stimulation of the ARF will start immediately after. TAG Oil will continue to provide regular drilling updates, as necessary.