TAG Oil Spuds Ratanui-1, Updates Operations



    VANCOUVER, Jan. 31 /CNW/ - Independent Canadian oil and gas company TAG
Oil Ltd. (TSX-V: TAO and OTCBB: TAGOF) announced that the Ratanui-1
exploration well in PEP 38741 (TAG 45%) in onshore Taranaki, New Zealand, is
expected to commence drilling operations later today. The well is scheduled to
drill to a depth of 2,120m (6,955'), and will take approximately 14 days to
reach total depth. The well is targeting two separate zones within the
Miocene-aged Mt Messenger Formation.
    TAG Oil President Drew Cadenhead commented: "Ratanui-1 is a follow-up to
our SuppleJack discovery last year. We have confirmed this area to be oil and
gas bearing with the SuppleJack wells, Ratanui is targeting the same
Formations."

    Mangamingi-1:

    After analyzing oil shows and wireline log data from the recently drilled
Mangamingi-1 well (TAG 100%) in PEP 38758, onshore Taranaki, New Zealand, a
completion and testing program is now under design. It is anticipated that the
Ensign Service Rig No.6, which is scheduled for availability the fourth week
of February, will be utilized for the work.

    Cheal:

    The Cheal development program in PMP 38156-S (TAG 30.5%), onshore
Taranaki, New Zealand, is progressing on time and on budget. Production
testing has now been initiated on the recently drilled Cheal-B site wells.
Cheal B-3 is currently under test and has averaged 450 BOPD in the first seven
days of the test program. TAG Oil President Drew Cadenhead commented: "Cheal
B-3 is our first well to be tested of the recent four-well drilling campaign.
This well is showing impressive potential so far, we look forward to the cash
flow from the Cheal program as a whole, which is on schedule for full capacity
by mid-year."

    About TAG Oil:

    TAG Oil Ltd. is an independent Canadian oil and gas exploration and
production company with a well-balanced portfolio of assets in and around the
Canterbury, Taranaki and East Coast basins of New Zealand. With exploration
permits totaling 3,686,593 gross acres (net 1,847,593). TAG Oil is one of the
largest holders of prospective acreage in New Zealand.

    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 filings that the Company 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.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.




For further information:

For further information: Garth Johnson, gje@tagoil.com, (604) 609-3350


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