VANCOUVER, Dec. 21 /PRNewswire-FirstCall/ - TAG Oil Ltd. (TSX-V: TAO) advises that the Company has completed an internal Resource Assessment on the Company's 100% controlled Winchester exploration permit PEP 38748, located in the onshore Taranaki basin, New Zealand. TAG's internal qualified reserves evaluator prepared the resource assessment in accordance with National Instrument 51-101.

The prospective resources assigned to the six drill-ready prospects, were determined using 3-D seismic data, well log data, core pyrolysis and analog field data. The analysis concludes a "best estimate" (P50) of 19.1 million stock tank barrels of original oil in place effective December 17, 2009.

For further information on TAG's reserves and prospective resources please visit: http://tagoil.com/reserves.asp

The target in Winchester permit 38748 is light oil within the Mt. Messenger Formation, consistent with numerous discoveries in the immediate area. This permit is located between TAG's 100% owned Cheal oil and gas discovery, that is currently under appraisal and immediately offsetting the prolific Ngatoro oil and gas field.

For further information on the Winchester permit, please visit: http://tagoil.com/taranaki-basin.asp

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 in the Taranaki Basin, including a 100% interest in the Cheal oil and gas discovery now under appraisal and development. TAG is positioned to build near-term production through optimization of the existing producing wells, and through further development and exploration of the Cheal Mining License and exploration acreage in close proximity to it in the Taranaki discovery fairway.

In the East Coast Basin, the Company intends to exploit the vast resources that have been demonstrated in the Waipawa Black Shale and Whangai Shale source-rock formations using technologies that are commonplace in North America but not yet employed in New Zealand. In addition, TAG is appraising a shallow historical light oil discovery as well as testing high-impact conventional prospects across a 2.2 million-acre holding.

Important information: It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. The term "prospective resources" refers to those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

Exploration for hydrocarbons is a speculative venture necessarily involving substantial risk. TAG's future success in exploiting and increasing its current reserve base will depend on its ability to develop its current properties and on its ability to discover and acquire properties or prospects that are capable of commercial production. However, there is no assurance that TAG's future exploration and development efforts will result in the discovery or development of additional commercial accumulations of oil and natural gas. In addition, even if further hydrocarbons are discovered, the costs of extracting and delivering the hydrocarbons to market and variations in the market price may render uneconomic any discovered deposit. Geological conditions are variable and unpredictable. Even if production is commenced from a well, the quantity of hydrocarbons produced inevitably will decline over time, and production may be adversely affected or may have to be terminated altogether if TAG encounters unforeseen geological conditions. TAG is subject to uncertainties related to the proximity of any reserves that it may discover to pipelines and processing facilities. It expects that its operational costs will increase proportionally to the remoteness of, and any restrictions on access to, the properties on which any such reserves may be found. Adverse climatic conditions at such properties may also hinder TAG's ability to carry on exploration or production activities continuously throughout any given year. The significant positive factors that are relevant to the estimate contained in the Resource Assessment are:

    -  proven production in close proximity;
    -  proven commercial quality reservoirs in close proximity; and
    -  oil and gas shows while drilling wells nearby.

The significant negative factors that are relevant to the estimate contained in the Resource Assessment are:

    -  tectonically complex geology could compromise seal potential; and
    -  seismic attribute mapping in the PEP 38748 area can be indicative but
       not certain in identifying proven resource

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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