TAG Oil Files Third Quarter 2008 Results

    VANCOUVER, Feb. 29 /CNW/ - Independent Canadian oil and gas production
and exploration company TAG Oil Ltd. (TSX-V: TAO and OTCBB: TAGOF) announced
today that the Company has filed its third quarter 2008 financial statements
along with the accompanying management's discussion and analysis as required
pursuant to National Instruments 51-101 and 51-102. Copies of these documents
can be obtained electronically through the SEDAR system at www.sedar.com or
through the Company's website at www.tagoil.com.

    Summary of selected financial information:

    TAG started the 2008 fiscal year with $13.43 million in cash and cash
equivalents and ended the third quarter with $6.29 million at December 31,
2007 with the decrease in cash resulting materially from capital expenditures
related to the Cheal oil field facilities. Shareholders' equity at quarter end
was $32.02 million (March 31, 2007: $40.13 million).
    During the third quarter TAG recorded $1,238,819 in production revenue
(9 months: $2,921,973) from its 30.5% interest in the Cheal oil field that
produced 38,814 (9 months: 115,396) gross barrels of oil and sold 44,997
(9 months: 113,936) gross barrels of oil, with associated gas produced at
Cheal to generate electricity on-site. Daily production rates for the third
quarter averaged approximately 422 barrels of oil gross per day and currently
the field is cycling oil from six different wells, seeking optimum production
    The loss recorded for the quarter was $6,596,933 ($0.07 per share)
(9 months: $8,182,530) ($0.09 per share) and included production costs and
royalties amounting to $462,056 (9 months: $1,026,191) and $54,766 (9
months: $141,422), respectively as well as a one-time write-down for the
quarter amounting to $6,342,933 that relates to certain exploration interests
of the Company. Other significant contributors to the loss included depletion
of $495,547 (9 months: $1,045,837), general exploration costs of $87,712
(9 months: $479,892) and a foreign exchange loss of $188,290 (9 months:
$1,373,180). General and administrative costs for the quarter amounted to
$421,921 (9 months: $1,585,634) which is slightly lower than the comparable
quarter last year.

    Cheal Operational Update

    The Cheal Production Facility (TAG: 30.5%) is now completed and is fully
commissioned with six wells capable of production. Following several months of
production through temporary facilities, the three "B-Site" wells were shut-in
on October 2, 2007 to allow the construction and tie-in of permanent flowlines
back to the facility located at the "A-Site". Production continued through the
remainder of October and November from Cheal A-3X and A-4 and over these two
months production totals were 10,652 bbls (TAG share: 3,249 bbls) and 9,125
(TAG share: 2,783 bbls), respectively. Commissioning of the "B-Site" commenced
on December 4, 2007, with Cheal B-3 production being brought on through
permanent facilities on December 6, 2007 and Cheal B-2 on December 21, 2007.
Production for the month of December totaled 19,037 bbls (TAG share:
5,806 bbls), the highest monthly total from the field to date, with daily
production up to 791 bbl/day (TAG share: 241 bbl/d). Initial flush production
decline, as well as a cycling plan intended to maximize ultimate recovery of
the field, has subsequently resulted in recent production rates of
approximately 500 bbls/day gross. Gas export from the field commenced on
December 21, 2007 with a total of 2.830 mmscf being exported to the
Waihapa Production Station. Subsequent to the quarter end, Cheal A3X and
Cheal A4, which had temporary connections to the production facility, have now
been permanently connected and are available for long term production.
    Further increases to daily oil production will require additional wells
to be successfully drilled along with further workovers potentially required
on Cheal A3X and A4. The Company is currently in discussions with the operator
of the permit to resolve the matters relating to the significant project
revisions made to the development plan by the operator as well as to agree to
a suitable forward work program at Cheal.
    Commenting on the Cheal operational results, Garth Johnson,
Chief Executive Officer, said: "We're glad to have the Cheal Facility fully
commissioned, producing oil and we expect to finish the 2008 fiscal year
strongly with consistent oil, gas and associated liquids production from the
Cheal A and B sites for the first time since this project began. Oil prices
remain robust, positioning TAG with ongoing cash flow, working capital and no
debt. We look forward to leveraging this position as we grow the Company."

    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
and its independent evaluator have 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.

    About TAG Oil:

    TAG Oil Ltd. is an independent Canadian oil and gas exploration and
production company with international operations in the Taranaki Basin of
New Zealand.

    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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