TAG Oil Files 2009 Year-End Results and Provides Summary

    VANCOUVER, July 31 /CNW/ - International oil and gas producer and
explorer, TAG Oil Ltd. (TSX-V: TAO), announces the filing of its operating and
financial results for the 2009 fiscal year ending March 31, 2009.

    Financial and Operational Summary

    Financial Results:

    TAG recorded $4.9 million in production revenue for the year, which is a
19% increase when compared to the $4.1 million of production revenue recorded
during the 2008 fiscal year. The net loss recorded for the year was $18.87
million, primarily as a result of a $19.27 million write-down to the Company's
30.5% owned Cheal oil discovery in the Taranaki Basin of New Zealand. The
write-down at Cheal can be attributed to drilling results of the A6 and A6ST
wells and the use of a more conservative recovery factor in reserve estimates.
The Company ended the 2009 fiscal year debt-free, cash-flow positive and with
$7.39 million in cash and $7.87 million in working capital.
    TAG Oil CEO, Garth Johnson commented, "I am extremely pleased with the
financial performance of TAG during the 2009 fiscal year, which has paved the
way for our future growth. Some of the noteworthy financial achievements
include an increase in working capital, increased production revenue for the
second straight year and further cost-reduction activities, which include
decreasing production costs per barrel sold and reducing general and
administrative costs by more than $500,000. In addition, the Company bought
back and cancelled 8% of the Company's stock."

    New Zealand Production, Development, Exploration Activity

    Gross daily production rates from the Cheal discovery for fiscal 2009
averaged 443 barrels of oil per day; currently the oil field is producing
approximately 350 gross barrels of oil per day. During the 2009 fiscal year
the Cheal field produced 161,713 gross barrels of oil; 174,558 gross barrels
of oil were sold with oil prices averaging $92 per barrel. Royalty and
production costs averaged $33 per barrel, resulting in a netback per barrel of
approximately $59. An independent assessment of reserves conducted as of March
31, 2009 has assigned gross proved/probable reserves of 530,000 barrels of oil
equivalent ("BOE") and a net present value of US$9.3 million (TAG 30.5% Share
US$3 million) based on year-end oil prices and a 10% discount rate.
    On June 17 and July 2, 2009 TAG signed binding agreements (subject to
various approvals) to acquire the remaining 69.5% interest in the Cheal Mining
Licence, oil production facilities and the remaining 66.67% interest in
Petroleum Exploration Permit 38748, where a number of prospects are defined by
3D.
    Mr. Johnson further commented, "I am very pleased with the acquisition of
the remaining interest in Cheal and in PEP 38748. In my opinion, full
development of the Cheal discovery and further exploration was held back by
the financial difficulties of the previous operator and joint venture partner.
Upon TAG taking over full control, we are poised to unlock the value of the
acreage by initiating optimization and workover plans to the existing wells,
reducing operating costs and planning our exploration drilling campaign."

    BOE Cautionary Statement
    BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 Mcf:1bbl is based on an energy equivalency at the burner
tip and does not represent a value equivalency at the wellhead.

    For further information please visit our website at http://www.tagoil.com
and www.sedar.com.

    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
has made and estimates its independent evaluator has made, including the
Company's most recent reports in Canada under National Instrument 51-102 and
in the United States under Forms 20-F and 6K.

    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.

For further information: Garth Johnson, CEO, (604) 609-3350, Website:
http://www.tagoil.com