TAG Oil Cases Cheal-B2 Well

TAG Oil Ltd.

Independent Canadian oil and gas exploration company TAG Oil Ltd. reported late Friday that the Cheal-B2 well located in PMP 38156-01 (TAG 30.5%) New Zealand, has reached a total depth of 1866m (6122'). After evaluating the wireline logs, the Joint Venture has agreed to run production casing and initiate a program of completion testing.

"We're pleased by the indications of oil," says President and CEO Drew Cadenhead, "and we're looking forward to moving the rig to spud Cheal-B3."

The Cheal-B1 and B2 wells are the first two step-out wells that the Joint Venture has drilled from the Cheal "B" surface location. Both wells were drilled directionally, targeting the Mt. Messenger Formation, proven productive at the Cheal-A3X and Cheal-A4 wells. The newly acquired Brecon 3-D seismic program has been utilized to target these wells along with a number of follow up locations in the Cheal Oil Field area.

Participants in the sidetrack operation are the Company (30.5%), Arrowhead Energy Limited (33%) and Austral Pacific Energy (NZ) Limited (36.5%).

TAG Oil Ltd. is an independent Canadian oil and gas exploration company with a well-balanced portfolio of assets in and around the Canterbury, Taranaki and East Coast basins of New Zealand. This regional focus supports the Company's mandate to explore in countries with low political risk and low government taxation, through the establishment of a portfolio of both high risk/high reward exploration projects and low risk/moderate reward acreage in producing basins. With exploration permits totaling 3,697,408 gross acres (net 1,858,048). TAG Oil is one of the largest holders of prospective acreage in New Zealand.