Commissioning Underway at TAG's Sidewinder Facility

TAG Oil announced completion and commissioning of the Sidewinder Production Facility and 3.5km pipeline located in the onshore Taranaki Basin, New Zealand. This facility is designed to handle up to 30 million cubic feet of gas production per day, as well as any oil production, and was constructed following the first four successful Sidewinder exploration wells drilled earlier this year.

Initial commissioning rates from the first two Sidewinder wells tied into the facility are currently between 6 - 12 million cubic feet of gas per day (1000 – 2000 barrels of oil equivalent per day), as well as approximately 60 - 80 barrels of condensate (light oil) per day. TAG expects continued ramp-up of production rates as the remaining two Sidewinder wells are tied into the production facility in November 2011, and development drilling continues in the New Year.

Garth Johnson, TAG Oil CEO, commented, "I am extremely pleased the commissioning of the Sidewinder facility is now underway, and I commend our operational team for completing the facility on time and on budget. TAG is now selling gas and associated high value condensate while conducting our long-term production testing, which marks another important milestone in the Company's history. This ramp in production, combined with our success at Cheal, transforms TAG into a much more substantial enterprise. We are looking forward to the continued development and step-out drilling to test the significant oil and gas potential at Sidewinder."

TAG also reports that a 60-km 2-D seismic program is now underway at Sidewinder to identify new independent Mt. Messenger prospects contained within the permit area. Following the current drilling campaign underway at TAG's Cheal field, the Company will commence further drilling at Sidewinder targeting previously identified prospects as well as new prospects identified as a result of the seismic acquisition.

The Sidewinder gas and oil discovery is located in TAG's 100%-controlled Petroleum Exploration Permit 38748, in the onshore Taranaki Basin, New Zealand.