TAG Oil Reviewing Strategic Options

    VANCOUVER, Sept. 7 /CNW/ - Independent Canadian oil and gas production
and exploration company TAG Oil Ltd. (TSX-V: TAO and OTCBB: TAGOF) announced
today that the Company is holding talks with a number of advisory firms to
execute an agreement to assist the Company in its review of strategic
alternatives for its New Zealand operations. Alternatives under consideration
for TAG include an outright sale of some or all of its New Zealand interests
and facilities, consideration of potential merger opportunities, farming-out
certain prospects to key industry participants and entering into promising new
joint venture opportunities that meet the Company's risk profile.
    "With the Cheal production facility fully operational, TAG is in an
excellent position to leverage its New Zealand oil and gas assets. Cheal is
now producing approximately 850 barrels per day (TAG 30.5%) and is projected
to increase to 1200-1500 barrels per day in 2008," stated Garth Johnson, TAG
Oil Chief Executive Officer.
    TAG's primary asset is a 30.5% interest in the Cheal Oil field and the
associated Cheal production facility with proved and probable reserves having
been independently estimated at 2.6 million barrels of oil gross for the
field. The Company also holds a number of oil and gas prospects holding
significant resource potential, some of which are: the Crossroads oil prospect
(TAG: 30.5.%), the Waitoriki deep gas prospect (TAG: 45%), the Cardiff deep
gas prospect (TAG: 15.1%), the Kahili deep gas prospect (TAG: 15%) and the
Onaero gas prospect (TAG: 16.67%).
    Mr. Johnson further stated, "In addition to some attractive development
and high graded exploration prospects, TAG Oil is one of the few small
Canadian-based internationals that has developed and established oil
production in a politically stable environment and I believe we can use this
to our advantage."
    The Company cautions that there can be no assurance that the review of
strategic alternatives will ultimately result in a transaction.

    About TAG Oil:

    TAG Oil Ltd. is an independent Canadian oil and gas exploration and
production company with international operations in the Taranaki and East
Coast Basins of 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, 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.

    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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