TAG Oil Clarifies Resource Assessments

VANCOUVER , Dec. 22 /CNW/ - TAG Oil Ltd. (TSX-V: TAO) advises that the AJM Petroleum Consultants report dated September 2008 and the Sproule International Limited report dated September 2007 indicate a total hydrocarbon potential having a best estimate volume of 12.6 billion barrels and 1.736 billion barrels of oil equivalent ("boe"), respectively, of undiscovered Hydrocarbon-In-Place.

Similarly the Company's internal report on PEP 38748 indicates a total hydrocarbon potential having a best estimate volume of 19.1 million stock tank barrels of undiscovered hydrocarbon in place effective December 17, 2009 .

Important information:

Undiscovered Hydrocarbon-In-Place (equivalent to undiscovered resources) is that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered. There is no certainty that any portion of the undiscovered resources will be discovered or that, if discovered, it will be economically viable or technically feasible to produce.

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 effective December 17, 2009 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 dated December 17, 2009 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
    

The term "barrels of oil equivalent" or "boe" may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (6 mcf) to one barrel (1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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.

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: Investor Contact: Dan Brown [phone]; Media Contact: Denise Marshall [phone] ext. 706, [email protected]; TAG Oil Website: http://www.tagoil.com/