Tag Successful at Cheal A7 Step-Out Well

Tag Oil Ltd. announced the success of the Cheal A7 step-out well at the Cheal oil field, located in the onshore Taranaki Basin, New Zealand. The well has been drilled, logged and both of the Mt. Messenger sandstone reservoirs targeted are interpreted as oil saturated.

"We are pleased with the results of the Cheal A7 step-out well, the electrical logs indicate good quality reservoir sands over both the MM2 and MM3 zones. We look forward to increased production flowing into the Cheal facility at a time of record high oil prices," said Garth Johnson, Chief Executive Officer.

The Cheal A7 well was drilled to a total measured depth of 1848 meters and intercepted approximately 7 meters of oil bearing sands within the Mt. Messenger formation. The Cheal Joint Venture (TAG 30.5%) is in the process of completing the well and preparing a temporary tie back into the Cheal Production Facility to production test the well in the near future.

Mr. Johnson also stated, "We also look forward to incorporating the new data from both the Cheal A6 and A7 wells into our 3D seismic model. We're optimistic this newly acquired data will help us define future exploration drilling opportunities in the greater Cheal trend where TAG holds a 30.5% interest in the 11,500-acre Cheal Exploration Permit."