Vancouver, B.C. (PRWEB) November 16, 2011

TAG Oil Ltd. (TSX: TAO) and (OTCQX: TAOIF), a Canadian-based production and exploration company with extensive operations in New Zealand, reports the Company has filed its September 30, 2011 condensed consolidated unaudited financial statements and management discussion and analysis with the Canadian Securities Administrators for the second quarter of the Companys 2012 fiscal year. Copies of these documents can be obtained electronically at http://www.sedar.com, or for additional information please visit TAG Oils website at http://www.tagoil.com/.

September 30, 2011 Results (Q2 2012 fiscal year)

????Production revenue increased to $ 7,377,177 (six months: $ 13,230,278) compared
????????to $ 2,413,333 (six months: $ 4,227,063) in Q2 2011 fiscal year.

????A net profit of $ 2,799,434 (six months: $ 4,983,742) was recorded before deducting
????????non-cash stock-based compensation expenses.

????Per barrel production, storage and transportation costs of $ 18.20 per boe
????????(six months: $ 15.83) for the quarter compared to $ 16.83 (six months: $ 17.79)

????????for the comparable period last year.

????Net operating cash flow of $ 3.53 million (six months: $ 6.29 million) for the quarter.
????TAG produced 60,826 barrels (six months: 117,335) of light oil in the quarter and
????????sold 63,633 barrels (six months: 114,585) of oil at an average price of $ 112 per barrel.

????TAGs current daily production averaging approximately 2000 boe/day with significant
????????production increases in coming months.

????Preparing to test 4 new discovery wells at Cheal.
????Sidewinder-1, the first well tied into the new Sidewinder Production Station on
????????September 22, 2011, averaged 6 million cubic feet of gas and 43 barrels of oil per

????????day (1043 boe/day).

Taranaki Basin Operations:

TAGs drilling operations in Taranaki continue to achieve excellent results with the first three wells (Cheal-C2, A8 and B5) in the next 10-well drilling campaign now cased and completed for upcoming testing operations. Oil and gas were encountered during drilling and electric logs indicated high-quality oil and gas pay in all wells.

Testing operations are now being conducted on the four most recent Cheal wells over the next 30 to 60 days (Cheal-C1, C2, A8 and B5) with drilling continuing to target the Mt. Messenger (~1800m) and the shallower Urenui (~1400m) Formations.

As the current Cheal testing program progresses, TAG is revising its production and reserve profile upward for the Cheal field. Recent drilling success has exceeded expectations, and after all new wells are adequately tested, TAG will consider all options to increase daily production and cash flow while maximizing the net present value of the field. Provision for high-impact deep prospects such as Cardiff, will also be included in TAGs expanding development plans for the Cheal field.

Summary of last 10 TAG wells drilled in Taranaki:

Sidewinder-1????Producing

Sidewinder-2????Awaiting tie-in

Sidewinder-3????Producing

Sidewinder-4????Awaiting tie-in

Cheal-BH-1????Producing

Cheal-B4ST ????Producing

Cheal-C1 ????????????Testing

Cheal-C2????????????Testing

Cheal-A8????????????Testing

Cheal-B5????????????Testing

TAG Oil CEO, Garth Johnson commented Our drilling operations to date are continuing to exceed our expectations. As a result our revenue and cash flow have significantly increased and we are continuing to drill and test new discovery wells. We are currently conducting testing operations on Cheal-C1, C2, A8 and B5 and with each new well we drill we learn more about Cheal. Once this testing program is completed we will determine the most optimal way of producing the Cheal field long-term, which may include some enhancement to our current infrastructure to meet the production capabilities these wells can provide. At the same time, our development and infrastructure plan will not only address our most recent wells, but will also prepare for the productive potential of our deeper prospects such as Cardiff (PMP 38156) and Hellfire (PEP 38748) that we intend to drill in 2012/2013.

Cheal Oil and Gas Field – 100% Interest

The Cheal field continues to perform strongly with low decline rates. Daily production of approximately 800 barrels of oil equivalent per day is coming from just 5 of 12 wells proven capable of production at Cheal. Production will be ramped up from newly drilled wells Cheal-A8, Cheal-B5, Cheal-C1 and Cheal-C2 and from the existing Cheal-A1, B1 and B2 wells that are undergoing artificial lift optimization. All wells are scheduled to be on stream in January 2012.

In addition to this active drilling campaign, TAG is also conducting Cheal’s first secondary recovery scheme at the “A” pool, a program forecast to cost-effectively increase recovery factors significantly within the Cheal A site’s oil reserves.

Sidewinder Oil and Gas Field – 100% Interest

Permanent tie-in of the Sidewinder-2 through 4 wells is expected to be completed by December 31, 2011; current daily Sidewinder production is averaging 1200 boe per day. TAG is currently acquiring a 60 square kilometer 2D seismic program that will be followed by a multi-well drilling program within this lightly explored permit.

East Coast Basin Operations

TAG recently entered into a farmout agreement with Apache Corporation in Q2 2012 to explore and potentially develop oil and natural gas resources in the East Coast Basin of New Zealand.

Apache has agreed to spend up to $ 100 million to conduct a multi-phased exploration, appraisal and potential development program within TAG’s East Coast Basin Petroleum Exploration Permits PEP 38348, PEP 38349 and PEP 50940 (“the Permits”).

Currently TAG and Apache are undergoing a consultation process with various parties related to exploration activities planned in the East Coast and preparation is underway to begin a 130 km seismic program within PEP 38348 and PEP 38349.

Liquidity and Financial Summary

TAG ended the second quarter of fiscal 2012 in a strong financial position: the Company remains debt free with net working capital at September 30, 2011 of $ 57.9 million. Subsequent to the end of Q2, more than 3.27 million warrants were exercised providing an additional $ 11.7 million to working capital.

Production revenue was $ 7.38 million for Q2 and $ 13.23 million for the six months ended September 30, 2011 compared to $ 2.41 million and $ 4.23 million for the same periods last year. The Company generated a net profit for the quarter of $ 2.8 million before deducting $ 1.9 million for non-cash stock-based compensation and a net profit of $ 4.98 million for the six months ended September 30, 2011.

During the second quarter TAG produced 60,826 (six months: 117,335) barrels and sold 63,633 (six months: 114,585) barrels of light oil with a selling price averaging $ 112 per barrel. Per barrel production cost for the quarter was $ 18.20 (six months: $ 15.83) per boe; the slight increase in per unit production costs is associated with the initial commissioning of the Sidewinder Production Facility. This facility is scheduled to become un-manned by December 2011, at which point overall per unit production costs are forecast to reduce significantly.

Expenditures on the Company’s oil and gas properties during the second quarter totaled $ 9.4 million (six months: 19.8 million) primarily invested in the Company’s Taranaki operations. TAG will continue to focus on developing the shallow formations through vertical drilling operations at Cheal and Sidewinder to build near-term reserves and production revenue as operation

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