VANCOUVER, July 2 /PRNewswire-FirstCall/ - Oil and gas producer and explorer, TAG Oil Ltd. (TSX-V: TAO), is pleased to announce that the Company's binding offer to acquire Austral Pacific Energy's (in receivership) 66.67% interest in the 7,910 acre exploration permit "PEP 38748" has been accepted by the Receivers appointed to Austral Pacific Energy Ltd. Combined with TAG's current 33.33% operated interest the permit, TAG will control 100% of this Permit.

    The consideration to be paid by TAG for these assets includes:

    -  US$50,000 in cash; and
    -  an initial 5% overriding royalty on any future net oil sale revenue
       per barrel on PEP 38748 for the first 200,000 barrels of oil produced
       (reduced to 2.5% for the life of the field after 200,000 barrels of
       oil have been produced); and
    -  certain permit work commitments to be completed in the next 20 months.

Garth Johnson, TAG Oil CEO, commented, "We are pleased to acquire the remaining interest in this strategically located onshore acreage situated in the heart of the Taranaki discovery fairway. A number of drillable prospects have been identified by 3D seismic that indicates the potential for significant upside. This high-grade exploration asset is highly complimentary to our Cheal production permit by providing exploration opportunities with a reasonable risk profile."

The offer is subject to certain standard conditions precedent being satisfied for a transaction of this nature.

About TAG Oil Ltd.

TAG Oil Ltd. is a Canadian based oil and gas producer and explorer with assets in the onshore Taranaki Basin of New Zealand. TAG is poised to grow through existing profitability, acquisition, development and exploration. TAG remains in a strong financial position, with sufficient working capital to fund operations and meet all commitments for the foreseeable future. For further information please visit our website at http://www.tagoil.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.

SOURCE TAG Oil Ltd.

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