TAG Confirms New Oil and Gas Discoveries
in Taranaki Basin Exploration Wells
Vancouver, B.C. – August 11, 2011 – TAG Oil Ltd. (TSX: TAO) and (OTCQX: TAOIF), is pleased to
report that strong test results confirm new oil and gas discoveries in the Sidewinder-2 well and the Cheal-
C1 well, both located in the Taranaki Basin, New Zealand.
Lower Mt. Messenger Oil Discovery in Sidewinder-2 Well
TAG has completed isolated flow testing on oil-and-gas-bearing zones discovered in the Sidewinder-2
well. These additional productive zones were encountered in the shallower Urenui Formation and in the
lower Mt. Messenger Formation, below the main Sidewinder gas zone discovery, which tested at
stabilized rates of 8.8 million cubic feet per day (~1467 BOE per day).
Of particular importance are the oil-bearing sands Sidewinder-2 discovered in the lower section of the Mt.
Messenger Formation (~1800m), where the Company recovered significant volumes of light oil during
recent swab testing. Technical data suggests that this oil zone can produce at rates consistent with other
established Mt. Messenger oil wells in the immediate area. These oil-bearing Mt. Messenger sands are
interpreted to be widespread in the Sidewinder permit area and will be a primary target in future
exploration wells.
TAG will proceed to commercialize oil production from the lower Mt. Messenger zone and will acquire
artificial lifting equipment that will best suit the overall Sidewinder exploration and development strategy.
Also of interest in Sidewinder-2 is the gas discovered in the shallow Urenui Formation (~1400m). The
Company tested clean, dry natural gas at rates ranging from 1 to 2 million cubic feet of gas per day (167-
333 BOE’s per day) utilizing various choke
sizes. Production from the Urenui Formation
zone can be commercialized by comingling
with the main Sidewinder gas zone.
TAG CEO Garth Johnson commented, “We
continue to achieve excellent exploration
results which indicate that TAG has potentially
discovered a large oil and gas field at
Sidewinder. In addition to the prolific main gas
zone discovered, there are now two significant
high-impact discovery zones to pursue in this
acreage. This new Mt. Messenger oil discovery
will add high net-back oil production to the
~5000 BOE’s of behind pipe awaiting
commissioning of the Sidewinder production
facilities.”
The Sidewinder oil and gas discoveries are located in TAG Oil's Petroleum Exploration Permit 38748
(TAG 100%) in the Taranaki Basin, New Zealand.
Cheal-C1 Testing Confirms Oil Discovery
TAG also reports that testing of the Cheal-C1 exploration well confirms the oil and gas discovery in the
Cheal “C” area. Cheal-C1 intercepted oil-and-gas-bearing sands in the Mt. Messenger Formation
producing substantial volumes of light oil during swab testing along with clean, dry gas at rates between
1.5 million to 3 million cubic feet per day.
Artificial lifting equipment is now being acquired to establish daily oil production rates, however the
Company estimates production capabilities from Cheal-C1 to be similar to TAG’s Cheal-B4ST well. This
well tested 360 barrels of oil + 240 thousand cubic feet of gas per day.
The Cheal-C1 well also encountered strong oil shows within a 73-meter-thick section of sandstone within
the deeper Moki Formation. The Moki zone was tested but commercial flow rates were not achieved.
TAG’s technical interpretation indicates that Cheal-C1 penetrated a “transitional zone” where oil migrated
through the contacted zone into a large structural closure, updip from the Cheal-C1 penetration. Given
the extensive oil shows recorded while drilling coupled with the excellent reservoir quality interpreted from
electric logs, TAG will plan a new well that will directly target the Moki Formation prospect, drilled from a
more optimal location on the structure.
TAG CEO Garth Johnson said, “I’m pleased to achieve such positive results from the Cheal-C1 well,
significantly expanding the Cheal development area. We expect to commercialize the Cheal-C1 discovery
in conjunction with appraisal drilling included in our next drilling campaign, scheduled to start in
September 2011.”
The Cheal oil and gas discoveries are located in TAG Oil’s Petroleum Mining Permit 38156 (TAG 100%)
in the Taranaki Basin, New Zealand.
TAG Oil Ltd.
TAG Oil Ltd. (http://www.tagoil.com/) is a Canadian-based production and exploration company with
operations focused exclusively in New Zealand. With 100% control over all its core assets, including oil
and gas production infrastructure, TAG is anticipating substantial oil and gas production and reserve
growth through development of several light oil and gas discoveries. TAG is also actively drilling high-
impact exploration prospects identified across more than 2,600 sections of land in the onshore Taranaki
and East Coast Basins of New Zealand's North Island.
In the East Coast Basin, TAG Oil is pursuing the significant unconventional resource potential estimated
in the fractured shale source-rock formations that are widespread over the Company's acreage. These
oil-rich and naturally fractured formations have many similarities to North America's Bakken Shale source-
rock formation in the successful Williston Basin.
Contact:
Dan Brown or Garth Johnson, TAG Oil Ltd. 1-604-682-6496
Website: http://www.tagoil.com/
"BOE"s may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 Bbl is
based on an energy equivalency conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this news release that are not historical facts are forward-looking statements that
involve various risks and uncertainty affecting the business of TAG Oil. All estimates and statements that
describe the Company's objectives, goals, or future plans, including the drilling plans and flow testing
related to the exploration, testing, development and commercialization of production of TAG Oil's
Sidewinder oil and gas discovery wells, the Cheal-C1 oil and gas discovery well and the Moki Formation
located in the Taranaki Basin of New Zealand, are forward-looking statements under applicable securities
laws and necessarily involve risks and uncertainties including, without limitation: risks associated with oil
and gas exploration, development, exploitation, production, marketing and transportation, volatility of
commodity prices, imprecision of reserve estimates, environmental risks, competition from other
producers, and changes in the regulatory and taxation environment. These forward-looking statements
are based on certain factors and assumptions. Consequently, the Company's actual results may vary
materially from the information provided in this release and there is no representation by TAG Oil that
actual results realized in the future would be the same in whole or in part as those presented herein.
Additional risk factors and uncertainties that could cause actual results to differ from those contained in
the forward-looking statements are set forth in, but are not limited to, filings that the Company and its
independent evaluator have made, including the Company's Annual Information Form and its most recent
reports in Canada under National Instrument 51-101.