TAG Oil Taranaki Basin Operations Update Exploration Drilling, Development Drilling and Work-Over Programs Commence

Wednesday, Sep 08, 2010

 New Zealand explorer
and producer TAG Oil Ltd. (TSX-V, trading symbol: "TAO") announced today
that the Company is beginning the next phase of its Taranaki program,
including exploratory and horizontal development drilling, and various
workover operations including multi-stage fracture treatments. This program
is within TAG's 100% controlled, 15,400-acre (24
Section) Broadside exploration and Cheal oil discovery acreage in the
Taranaki Basin.

The prime objective of this program is to build TAG's oil and gas revenue in
Taranaki, where the Company has already established high netback oil
production from its 100%-owned and operated Cheal Production Facility. The
impact of this operation is anticipated to materially increase reserves, as
well as the 420 barrels of oil and 400 mcf gas currently produced per day.

Operations are moving forward on the basis of successful pilot testing of
downhole recovery technologies and recently completed fracturing programs.
The results of this three-well workover program have shown to accelerate and
increase reserve recovery, and to lower overall operating costs.

In the Broadside Exploration Permit PEP 38748, TAG is scheduled to spud the
Sidewinder-1 exploration well on September 15, 2010. The well is scheduled
to reach a total measured depth of 1457m in approximately 10 drilling days
to test this Miocene-aged prospect.

Sidewinder is one of several exploration prospects identified on permit-wide
3D seismic. TAG will have the option to immediately drill one or more
additional follow-on exploration prospects from the same surface location,
dependent on results. The Sidewinder-1 exploration well will target the Mt.
Messenger Formation, the same producing formation as the offsetting Ngatoro
and Kaimiro oil and gas fields.

Upon completion of this drilling operation, the rig will move to the Cheal
production permit PMP 38156-S to commence drilling the Cheal-BH-1 horizontal
well.

This development well, with a total measured depth of 2325m, including a
600m horizontal section, will be drilled into the proven producing area of
the Cheal A block and target the widespread turbidite fan deposits in the
Mt. Messenger Formation mapped over the Cheal permit area.

The Cheal-BH-1 well will be completed with a multi-stage fracture treatment
along the horizontal section, using completion technology proven in North
America and globally, but not yet deployed in New Zealand.

Simultaneously, a service rig will begin further optimization work on two
wells within the Cheal Mining Permit. Cheal B-3 will receive a fracture
stimulation treatment followed by installation of additional recovery
technology.

Source: Canada Wire