TAG Oil Begins 2004 Drilling Campaign

TAG Oil reports that the South Pacific Drilling Rig #1 will mobilize onto PEP 38741 and commence drilling Honeysuckle-1 on or about June 4, 2004. Located in the heart of the production fairway in the onshore Taranaki Basin in New Zealand, Honeysuckle-1 is the first well of TAG's 2004 multi-well drilling campaign. This will be followed immediately by Miromiro-1, the company's second well situated in nearby Permit 38765.

TAG Oil President and CEO Drew Cadenhead commented, "Honeysuckle-1 and Miromiro-1 have both been delineated with 3-D seismic and provide the company a prudent opening foray into our 2004 exploration campaign. These Mt. Messenger targets possess excellent reservoir qualities as evidenced by Kaimiro and Ngatoro, two offsetting multi-million barrel discoveries. If successful these wells will flow for decades and help ensure debt free participation in our upcoming "high-impact" exploration opportunities."

In other news management announced the completion of a non-brokered restricted private placement financing. The Company issued 542,945 units, consisting of one common share and a full share purchase warrant. There were no fees associated with this private financing and the unit placement, totaling US$905,000 includes a one-year hold period expiring May 4, 2005.

TAG Oil CFO Garth Johnson commented, "Investors' willingness to enter into a one year resale restriction is an important vote of confidence in the company and speaks volumes about our long-term growth potential. The financing provides us with a comfortable cash position and helps ensure TAG Oil will remain debt free as we plan our 2005 exploration operations."
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