TAG Oil Closes $30 Million Bought Deal Financing

TAG Oil Ltd. (TSX-V: TAO and OTCBB: TAGOF), has completed the bought deal financing of 40,000,000 common shares at a price of $0.75 per share announced May 12, 2006. The private placement was completed through Canaccord Capital Corporation and raised gross proceeds of $30 million.

The common shares issued pursuant to the private placement will have a four month hold period which expires on October 13, 2006.

The net proceeds of the financing will be used to complete the acquisition of Cheal Petroleum Ltd., PEP 38757 Ltd and PEP 38758 Ltd., to participate in the development of the Cheal oil field and to continue the Company's exploration, drilling and seismic surveys in New Zealand as well as for working capital.

The Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and were not offered or sold within the United States or to or for the account or benefit of U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.

TAG Oil Ltd. is a Canadian-based exploration company that is exploring for oil and natural gas in New Zealand.