TAG Oil Announces Terms of Overnight-Marketed Equity Financing


VANCOUVER, April 21 /CNW/ - TAG Oil Ltd. (TSX-V: TAO) (the "Company") is pleased to announce that, in connection with its previously announced overnight-marketed public offering (the "Offering"), it has entered into an underwriting agreement with a syndicate of underwriters led by GMP Securities L.P. and including Cormark Securities Inc. (collectively, the "Underwriters"), to sell 6,700,000 Units at a price of $2.60 per Unit (the "Offering Price") to raise gross proceeds of $17,420,000 pursuant to a short-form prospectus. Each Unit shall be comprised of one common share of the Company (a "Common Share") and one-half of one common share purchase warrant (a "Warrant"). Each whole Warrant will be exercisable at $3.60 and will entitle the holder thereof to acquire one Common Share for a period of 18 months following the closing of the Offering. The Company will file an amended and restated preliminary prospectus in all provinces of Canada, except Québec, to reflect the announced Offering terms.

The Company has also granted to the Underwriters an over-allotment option, exercisable in whole or in part for a period of 30 days from and including closing to purchase up to 15% of the Units sold pursuant to the Offering at the Offering Price for market stabilization purposes. The Underwriters may elect to exercise the over-allotment option to purchase additional Units only or additional Warrants only (in which case the additional Warrants will be acquired at $0.687 per Warrant and each full Warrant will remain exercisable at $3.60 for a period of 18 months), or any combination of additional Units and additional Warrants, so long as the aggregate number of additional Common Shares and additional Warrants issued upon the exercise of the over-allotment option does not exceed 1,000,000 Common Shares and 500,000 Warrants, respectively.

The Offering is expected to close on or about May 5, 2010 and is subject to certain customary conditions and regulatory approvals, including the approval of the TSX Venture Exchange.

The Company intends to use the net proceeds of the Offering to fund its exploration and development programs in the onshore portion of the Taranaki Basin and the East Coast Basin of New Zealand, for working capital and general corporate purposes.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state of the United States in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the 1933 Act, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such terms are defined in Regulation S under the 1933 Act) absent registration or an applicable exemption from the registration requirements.

Cautionary Note Regarding Forward-Looking Statements Certain statements contained herein constitute forward-looking statements, including statements concerning the anticipated closing date of the Offering and the anticipated use of proceeds. We believe the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon. Closing could be delayed if TAG cannot obtain necessary regulatory approvals within anticipated timelines and will not be completed unless certain conditions customary for transactions of this kind are satisfied. The forward-looking statements included in this press release are made as of the date of this press release and TAG disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.

TAG Oil Ltd.

TAG Oil Ltd. is a Canadian-based company with 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 potential undiscovered 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 2.4 million-acre holding.

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: For further information: Garth Johnson or Dan Brown, TAG Oil Ltd., (604) 682-6496, Website: http://www.tagoil.com/

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