TAG Flows Test Rates of 8.5MMcf at Sidewinder-1 Well, Updates Taranaki Ops

TAG Oil announced that the Sidewinder-1 discovery well, located in TAG's 100% controlled Permit 38748 in the Taranaki Basin, has been perforated and a 10-day sustained production test is now complete.

Sidewinder-1 was drilled to a total depth of 1601m and encountered 14 meters of net (22m gross) oil and gas bearing sandstones.

Stabilized flow rates of 8.5 million cubic feet of gas plus 44 barrels of oil per day for a total of 1461 barrels of oil equivalent ("BOE") per day were achieved with a flowing tubing pressure of 940 psi. The 4- Point Isochronal test indicated a tubing restricted maximum gas flow rate of 13 million cubic feet per day (2167 BOE's/day).

The Sidewinder-1 well initially produced pure natural gas, but as the ten day test progressed, increasing amounts of crude oil has been recovered, with no water produced.

Garth Johnson, TAG Oil CEO commented, "This is one of the strongest flow rates recorded from the Mt. Messenger Formation in Taranaki. Our technical team has identified numerous "lookalike" prospects from 3-D seismic to drill within our 7910 acre exploration permit area, with many being reachable from the same Sidewinder surface location. We will now proceed with plans to commercialize this discovery and initiate full time production as rapidly and cost-effectively as possible."

TAG also reports that the Cheal-BH-1 horizontal well has now reached total depth of 2285m, including a 550m horizontal section within the Mt Messenger Formation (1735-2285m) in the Company's 100% controlled Cheal oil and gas field. Uphole mudlogs have recorded better than expected oil and gas shows within the secondary Urenui Formation target at a depth of approximately 1400m. In the Mt. Messenger horizontal section of the well, a total of 430m of continuous reservoir penetration is interpreted with high oil and gas readings during the drilling operations. The multi-phase fracture completion assembly has now been successfully landed at a total depth of 2280m, with all stage packers successfully deployed. The drilling rig has now been released, and the Company is mobilizing a service rig onto location to complete the 5-stage fracture stimulation.

"With the completion assembly installed across the lateral section of the Cheal-BH-1 well, we can commence the multi-stage fracturing operation in the next few days prior to commencement of production testing of New Zealand's first horizontal multi-stage fractured well by mid-November," noted Mr. Johnson