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TAG Oil Announces Year-End Financial Results and Operating Highlights

   VANCOUVER, July 29 /CNW/ - TAG Oil Ltd., (TSX-V, trading symbol: "TAO") a
Canadian-based production and exploration company with operations in New
Zealand, reported financial results and operating highlights today. TAG
reports that it has filed these results along with its Annual Information Form
with the Canadian Securities Administrators as well as NI 51-101-compliant
reserves disclosure for the period ended March 31, 2010. Copies of these
documents can be obtained electronically at www.sedar.com or through the
Company's website: http://tagoil.com/financial-reports.asp.

	    <<
	    Year-End Highlights

	    -   Production revenue for 2010 increased to $6,527,585, compared to
	        $4,923,856 in 2009.

	    -   TAG produced 67,525 net barrels of light oil in fiscal 2010, which
	        was sold at an average price of $84.50 per barrel. Daily production
	        averaged 323 gross barrels of oil per day and 294 mcf gas per day.
	        Current daily production is 414 barrels of oil and 667 mcf of gas.
	        Production costs for fiscal 2010 were $22 per barrel; operating
	        efficiencies continue to improve, and additional production will also
	        reduce per-barrel production costs.

	    -   TAG acquired the remaining 69.5% interest in the Cheal Mining Permit,
	        which contains the producing Mt. Messenger oil and gas discovery and
	        the bypassed Urenui discovery currently under appraisal. The
	        acquisition also included the Cheal treatment and production
	        facilities and related infrastructure. Over 90% of the 7487-acre (11
	        section) permit is lightly explored, adding low-risk opportunity for
	        additional discoveries to be made. Numerous drill-ready prospects
	        that have been identified on the permit-wide 3D seismic data have
	        been prioritized for step-out drilling. Early testing of various
	        downhole recovery technologies have already set the stage for
	        boosting production and recovery from the current 9.55 million
	        barrels of original oil in place within the 608-acre area attributed
	        to discovered resources.

	    -   TAG acquired the remaining 66.67% interest in a 7910-acre (12
	        section) exploration permit, PEP 38748. The permit area contains
	        numerous low-risk, high-impact drilling prospects defined on the
	        permit-wide 3D seismic data, and is located on trend within the
	        onshore Taranaki Basin discovery fairway.

	    -   TAG's 2P reserves increased by 450% to 651,000 barrels in the Cheal
	        Mining Permit (PMP 38156-S) per the Company's independent assessment
	        of reserves effective as of March 31, 2010. The increases result from
	        a number of factors such as recovery factors, oil prices and
	        projected future well performance. TAG's initial optimization program
	        and success from initial testing of recovery technology seeks to
	        build upon these reserve increases in the near future. The success of
	        this initial program has set the stage for a more aggressive approach
	        to develop the Cheal field, and has provided support for the
	        significant upside potential of the Cheal area.

	    -   TAG completed a second transformational acquisition of Trans-Orient
	        Petroleum's conventional prospects and unconventional oil shale
	        prospects in the onshore East Coast Basin. This acquisition
	        positioned TAG with a 100% interest in over 2 million onshore acres
	        in a lightly explored rift basin. This basin was independently
	        estimated in September 2008 to have a total hydrocarbon potential
	        with a best-estimate volume of 12.6 billion barrels of undiscovered
	        hydrocarbon-in-place within the Waipawa Black Shale and Whangai Shale
	        oil and gas source rock formations. The acreage also contains a
	        number of drill-ready conventional prospects estimated in September
	        2007 to have a total hydrocarbon potential with a best-estimate
	        volume of 1.7 billion barrels of undiscovered hydrocarbon-in-place.
	        During the 2010 fiscal year TAG began appraising the historical
	        Waitangi Hill shallow (250m) light oil discovery with a stratigraphic
	        well test, with encouraging results. A thin pressurized oil zone was
	        intersected. Tests confirm that the oil generated in this zone was
	        generated from the underlying shale formations, as was oil sampled
	        from the historical Waitangi-1 wellbore, providing evidence of the
	        maturity of the shale formations and their viability as source rocks
	        and reservoir targets.

	    -   TAG was awarded a 100% interest in a 61,900-acre permit extension
	        that includes the remaining portion of the very large Kawakawa oil
	        shale prospect located onshore in the East Coast Basin. This
	        acquisition further solidified TAG's position in this highly
	        prospective unconventional frontier area, and will be one of several
	        key areas of exploration drilling focus when TAG initiates its East
	        Coast drilling campaign.

	    -   TAG is financially strong, with net working capital as at March 31,
	        2010 of $9.57 million. TAG's working capital as of July 29, 2010 is
	        approximately $26 million; the Company is completely debt free, and
	        has maintained the integrity of its share structure.
	    >>

	    TAG Oil CEO Garth Johnson commented, "Fiscal 2010 was a year of
significant value creation, growth and high-level achievement in all areas of
the Company. More importantly, the series of transformational acquisitions
completed during fiscal 2010 set the foundation for rapid growth, and has
placed TAG into a new tier of emerging international companies. TAG has 100%
interests in all of its assets and can control the process to drive reserve
growth, and to exploit and unlock the potential identified within the
Company's acreage."

	    Liquidity and Financial Summary

	    The Company recorded a net loss for the year of $2.6 million, compared to
a loss of $18.9 million for the year ended March 31, 2009. The 2010 net loss
consisted primarily of a write-off of $1.4 million related to Austral Pacific
Energy Ltd. shares that were issued to TAG, along with cash, as part of an
arrangement to settle a dispute with Austral Pacific Energy Ltd. in 2008.
Additional contributions to the net loss were other non-cash items: depletion,
stock-based compensation, and a write-down of inventory totaling $1.38
million.
	    On May 5, 2010 TAG issued 7.7 million shares at $2.60 per common share to
Canadian institutions, private funds and investors for net proceeds of $18.7
million. TAG also issued 3.85 million warrants to these investors, exercisable
at $3.60 per share until November 5, 2011. This financing was conducted by a
syndicate led by GMP Securities L.P. and including Cormark Securities Inc. TAG
currently has 37,646,608 common shares outstanding and 43,566,060 common
shares outstanding on a fully diluted basis.

	    Capital Expenditure

	    Capital expenditures during fiscal 2010 totaled $6,415,189, compared to
$2,128,790 during 2009. Major capital expenditure items during 2010 related to
the acquisition of a 69.5% interest in Petroleum Mining Permit 38156-S,
containing the Cheal oil and gas discoveries, which brought TAG's interest to
100%. In addition, the Company incurred costs related to acquiring
Trans-Orient Petroleum Ltd. and the tie-in of the Cheal-A7 well to the Cheal
production facility, long-lead items and costs associated with exploration in
the East Coast Basin.
	    TAG will soon begin a multi-well exploration and development drilling
campaign in Taranaki while also conducting new optimization operations
consisting of additional fracture treatments to existing Cheal wells, further
implementation of downhole heating technologies to unlock the significant
potential in the bypassed Urenui discovery, and the Cheal field's first
horizontal well with multi-stage fracture treatments into the proven Mt.
Messenger area.
	    "In the short term we are focused on building our production and
profitability, and adding additional proven reserves in Taranaki. We are also
preparing to initiate drilling operations and consider strategic initiatives
to explore the major potential in the East Coast Basin in early 2011,
targeting the conventional and unconventional prospects," Johnson concluded.

	    TAG Oil Ltd.

	    TAG Oil Ltd. is a Canadian-based company with international operations in
New Zealand. The Company holds an extensive drill-ready prospect inventory
that covers more than 3,500 sections of land in the Taranaki and East Coast
basins, including a 100% interest in the producing Cheal oil and gas
discoveries now under appraisal and development.
	    In the East Coast Basin, the Company is exploring the multi-billion
barrel undiscovered resource potential that has been demonstrated in the
Waipawa Black Shale and Whangai Shale source-rock formations. TAG is using
technologies that are commonplace in North America but not yet employed in New
Zealand's fractured oil and gas shale formations.

	    Important Information:

	    Undiscovered Hydrocarbon-In-Place (equivalent to undiscovered resources)
is that quantity of petroleum that is estimated, on a given date, to be
contained in accumulations yet to be discovered. There is no certainty that
any portion of the undiscovered resources will be discovered or that, if
discovered, it will be economically viable or technically feasible to produce
them.
	    For additional information concerning risk factors related to
Undiscovered-Hydrocarbon-In-Place and the significant positive and negative
factors relevant to their estimation, please see the Company's news releases
dated December 21 and 22, 2009.
	    The term "barrels of oil equivalent" or "boe" may be misleading,
particularly if used in isolation. A boe conversion ratio of 6000 cubic feet
(6 mcf) to one barrel (1 bbl) is based on an energy equivalence conversion
method primarily applicable at the burner tip, and does not represent a value
equivalence at the wellhead.

	    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. Actual results may vary materially from the
information provided in this release. As a result there is no representation
by TAG Oil that the actual results realized in the future will be the same in
whole or in part as those presented herein. Actual results may differ
materially from the results predicted, and reported results should not be
considered as an indication of future performance. Factors 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 most recent
reports in Canada under National Instrument 51-102.

	    Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.