Sept 2 (Reuters) - Canada’s Tag Oil Ltd said U.S. oil and gas major Apache Corp will buy half its stake in its East Coast Basin properties in New Zealand by spending $100 million to conduct a exploration and potential development program over four years.
Shares of Tag Oil, which currently holds a 100 percent working interest three properties in the region, rose as much as 5 percent to their highest in six years on Friday.
Under the farm-out deal, the exploration program will start in September with drilling to begin in early 2012, Tag Oil said in a statement.
At the end of Phase 3 — the last planned stage of the program — Tag Oil will remain as operator of the properties.
If Apache commits to another phase, all costs will then be shared equally between the two companies going forward. (Reporting by Ankur Banerjee in Bangalore; Editing by Viraj Nair)