Tag Oil Reviewing Options for New Zealand Operations

TAG Oil is holding talks with a number of advisory firms to execute an agreement to assist the Company in its review of strategic alternatives for its New Zealand operations. Alternatives under consideration for TAG include an outright sale of some or all of its New Zealand interests and facilities, consideration of potential merger opportunities, farming-out certain prospects to key industry participants and entering into promising new joint venture opportunities that meet the Company’s risk profile.

"With the Cheal production facility fully operational, TAG is in an excellent position to leverage its New Zealand oil and gas assets. Cheal is now producing approximately 850 barrels per day (TAG 30.5%) and is projected to increase to 1200-1500 barrels per day in 2008." stated Garth Johnson, TAG Oil Chief Executive Officer.

TAG’s primary asset is a 30.5% interest in the Cheal Oil field and the associated Cheal production facility with proved and probable reserves having been independently estimated at 2.6 million barrels of oil gross for the field. The Company also holds a number of oil and gas prospects holding significant resource potential, some of which are: the Crossroads oil prospect (TAG: 30.5.%), the Waitoriki deep gas prospect (TAG: 45%), the Cardiff deep gas prospect (TAG: 15.1%), the Kahili deep gas prospect (TAG: 15%) and the Onaero gas prospect (TAG: 16.67%).

Mr. Johnson further stated, "In addition to some attractive development and high graded exploration prospects, TAG Oil is one of the few small Canadian-based internationals that has developed and established oil production in a politically stable environment and I believe we can use this to our advantage."

The Company cautions that there can be no assurance that the review of strategic alternatives will ultimately result in a transaction.