Canadian oil and gas exploration company TAG Oil (TSXV: TAO; OTCQB: TAOIF; FSE: T0P) reported that no formation oil reached the surface during initial well-unloading operations at its T-200 vertical well in Egypt’s Western Desert, according to the company’s October 19 statement.
The well was drilled and completed on budget to a total depth of 4,160 metres, targeting the Abu Roash F reservoir at the Badr Oil Field. Initial unloading operations involved nitrogen lifting through coiled tubing to displace brine from the production tubing.
No formation oil reached the surface during the 48-hour operation. TAG Oil said this suggested restricted flow, potentially caused by near-wellbore formation damage or reservoir skin, although the cause has not been confirmed. The well has been shut in to allow the drilling rig to be released.
A week earlier, TAG Oil reported that preliminary drilling and wireline data indicated 14 metres of net oil pay within a 58-metre limestone interval, with average porosity of 8%. The company cautioned that the findings did not establish commercial production potential.
TAG Oil shares fell 52.9% on the TSX Venture Exchange on October 19, closing at CAD0.04 from CAD0.085 in the previous session, as investors assessed the initial test results. About 13.96mn shares changed hands during the session, according to market data.
Once the rig has been removed, the company plans to carry out acid stimulation to improve wellbore conditions and potentially restore flow from the formation.
The well will then undergo further production testing, with pressure behaviour and production performance assessed to determine its stabilised output. The initial unloading operation has not established commercial flow.
TAG Oil has previously produced oil from the same reservoir. Its BED4-T100 horizontal well produced about 400 barrels per day (bpd) in July 2024 following hydraulic fracture stimulation, but output subsequently declined. The company reported in August that its two producing Badr wells averaged a combined 66 bpd in the second quarter of 2026.
TAG Oil’s evaluation period under its petroleum services agreement with Badr Petroleum Company, holder of the BED-1 concession, runs until October 13, 2028. Under the agreement, the company has committed to drilling two additional wells before deciding whether to proceed with full-scale commercial development. It reported CAD10.4mn in cash and no debt at the end of June, although its financial position following the T-200 drilling programme has not yet been disclosed.
The company expects to provide a further operational update alongside its third-quarter financial and operating results on November 25, 2026.