TAG Oil Begins 2013 with a 13-Well Taranaki Basin Drilling Campaign

     TAG Oil Begins 2013 with a 13-Well Taranaki Basin Drilling Campaign

PR Newswire

VANCOUVER, Jan. 23, 2013

VANCOUVER, Jan. 23, 2013 /PRNewswire/ - TAG Oil Ltd. (TSX: TAO and OTCQX:
TAOIF), is pleased to announce the Company's anticipated 2013 Taranaki Basin
drilling program within the Cheal and Sidewinder fields, and within TAG's
newly awarded acreage. This drilling campaign is expected to consist of a
minimum 13 wells, and will continue to target the Mt. Messenger/Urenui
Formation targets, as well as deeper high-impact targets in the Kapuni
Formation.

TAG's CEO, Garth Johnson, stated "Building on our string of success in 2011
and 2012 and driving revenue as a result, we expect calendar 2013 to be
another exciting and transformational year for TAG. With a record number of
wells to drill in Taranaki as well as plans for the upcoming drilling in the
East Coast Basin, I'm confident our plans will continue to become our
reality."

TAG has enjoyed significant growth in the last two years, drilling 21
consecutive successful wells in Taranaki. Given this success, and the
correlative increase in operating cash flows, TAG will now begin to include a
higher risk, higher impact deep drilling component to its Taranaki Basin
exploration efforts.

The deeper wells will target the Kapuni Formation, which is a proven prolific
play in Taranaki and where most of New Zealand's landmark onshore and offshore
fields have been discovered, including the large Maui, Kapuni and Mangahewa
fields. TAG holds a number of attractive Kapuni prospect opportunities within
its portfolio, including the Cardiff prospect where gas-rich condensates were
discovered and tested within a 600m interval in the Kapuni Formation in 1992.
TAG will contract Ensign Drilling's Deep Rig #31 to drill one or more deep
prospects including Cardiff, which are tentatively scheduled to commence in
May 2013.

Details of Anticipated 2013 Taranaki Basin Drilling Activity:

Permit Number Permit Name           # of Wells (1) Target
PMP 53803     Sidewinder (TAG 100%)       2        Miocene < 2500m
PEP 54877     East Cheal (TAG 70%)        5        Miocene < 2500m
PEP 54879     South Cheal (TAG 50%)       3        Miocene < 2500m
PEP 54876     North Cheal (TAG 50%)       1        Miocene < 2500m
PEP 54873     Heatseeker (TAG 100%)       1        Eocene > 4000m
PMP 38156     Cardiff (TAG 100%)          1        Eocene > 4000m

(1) Contingent on success of SW5 and SW6 TAG may drill an additional two
Sidewinder wells.

The capital expenditure to drill, complete and test the 13 wells is estimated
at US$36 million and will be funded primarily by operating cash flow generated
from current production of approximately 2,000 boepd, plus production that is
currently behind pipe, which is anticipated to be on stream in late March
2013.

In addition to the anticipated new wells, consenting operations are underway
seeking approvals for an additional 10 new surface drilling pads within TAG's
Taranaki Basin permits. Each drill pad is intended to host up to 12 wells per
pad, providing potential for TAG to drill up to 120 new wells in the coming
years.

Late March 2013 Completion of TAG's Infrastructure Expansion on Schedule

TAG's $30 million infrastructure expansion investment continues to proceed on
schedule to meet the expected March 31, 2013 completion date. At that time,
the Company expects wells already drilled and tested but currently shut-in to
be placed into full time production.

With this infrastructure expansion TAG's two main goals will be accomplished:

  *To maximize the commercial potential of existing and future wells at Cheal
    and Sidewinder, and

  *To become a completely independent processor, transporter and marketer of
    the natural gas TAG Oil discovers, extracts and produces.

This latter point allows TAG to secure contracts directly with the end user
rather than through third-party infrastructure, moving TAG up the "value
chain" and creating attractive new profit centers to build upon.

Despite the oversupply of natural gas in North America, the Taranaki region of
New Zealand is undersupplied. More importantly, a further imbalance between
supply and demand  is forecasted in the long term.

"Over the last few years, we've successfully followed our strategy of
increasing cash flow by targeting our lower-risk drilling opportunities -
allowing us to minimize shareholder dilution," continued Mr. Johnson. "Now
we're in a position to self-fund additional low-risk drilling, while also
including higher impact drilling opportunities from a position of strength.
Our financial position remains very strong with no debt, approximately $65
million in working capital and estimated fiscal 2014 (FYMarch 31) operating
revenue of more than $100 million. Furthermore, success on our 2013 drilling
campaign, particularly from the deeper plays, could have an additional
significant impact on projected revenues."

TAG Oil Ltd.

TAG Oil Ltd. (http://www.tagoil.com/) is a Canadian-based production and
exploration company with operations focused exclusively in New Zealand. With
100% ownership over all its core assets, including extensive oil and gas
production infrastructure, TAG is enjoying substantial oil and gas production
and reserve growth through development of several light oil and gas
discoveries. TAG is also actively drilling high-impact exploration prospects
identified across more than 2,953,810 net acres of land in New Zealand.

In the East Coast Basin, TAG is pursuing the major unconventional resource
potential believed to exist in the tight oil source-rock formations that are
widespread over the Company's acreage. These oil-rich and naturally fractured
formations have many similarities to North America's Bakken source-rock
formation in the successful Williston Basin.

TAG Oil has adopted the standard of six thousand cubic feet of gas to equal
one barrel of oil when converting natural gas to "BOE's". BOEs may be
misleading, particularly if used in isolation. A BOE conversion ratio of 6Mcf:
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.

Cautionary Note Regarding 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. Such statements can generally, but not
always, be identified by words such as "expects", "plans", "anticipates",
"intends", "estimates", "forecasts", "schedules", "prepares", "potential" and
similar expressions, or that events or conditions "will", "would", "may",
"could" or "should" occur. These statements are based on certain factors and
assumptions including:

A. All estimates and statements that describe the Company's objectives, goals,
operating revenue, production rates, infrastructure capacity and or future
plans relating to the seismic, testing, workover and drilling programs in the
Taranaki and East Coast Basins and the expected results are forward-looking
statements under applicable securities laws and necessarily involve risks and
uncertainties including, without limitation: risks associated with oil and gas
exploration, development, exploitation, production, marketing and
transportation, volatility of commodity prices, imprecision of reserve
estimates, environmental risks, competition from other producers, changes in
the regulatory and taxation environment and available funding. These
forward-looking statements are based on certain factors and assumptions,
including factors and assumptions regarding the management's views on the oil
and gas potential in the Permits, well performance, the success of any
operations, completing infrastructure and the costs necessary to complete the
operations; and

B. Those relating to TAG Oil's exploration and development of its oil and gas
properties within the Cheal and Sidewinder project areas, the production and
establishment of additional production of oil and gas in accordance with TAG
Oil's expectations at Cheal and Sidewinder, well performance, drilling the
completion of new infrastructure at Cheal and Sidewinder, the increase of cash
flow from new production, expected growth, results of operations, performance,
prospects, evaluations and opportunities. While TAG Oil considers these
factors and assumptions to be reasonable based on information currently
available, they may prove to be incorrect. Actual results may vary materially
from the information provided in this release, and 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.

TAG Oil is involved in the exploration for and production of hydrocarbons, and
its property holdings with the exception of the Cheal and Sidewinder project
areas are in the grass roots or primary exploration stage. Exploration for
hydrocarbons is a speculative venture necessarily involving substantial risk.
There is no certainty that the expenditures incurred on TAG Oil's exploration
properties will result in discoveries of commercial quantities of
hydrocarbons. TAG Oil's future success in exploiting and increasing its
current reserve base will depend on TAG Oil's ability to develop its current
properties and on its ability to discover and acquire properties or prospects
that are producing. There is no assurance that TAG Oil's future exploration
and development efforts will result in the discovery or development of
additional commercial accumulations of oil and natural gas.

Other factors that could cause actual results to differ from those contained
in the forward-looking statements are also set forth in filings that TAG and
its independent evaluator have made, including TAG's most recently filed
reports in Canada under National Instrument 51-101, which can be found under
TAG's SEDAR profile at www.sedar.com.

TAG undertakes no obligation, except as otherwise required by law, to update
these forward-looking statements in the event that management's beliefs,
estimates or opinions, or other factors change.

SOURCE TAG Oil Ltd.

Contact:

Dan Brown or Garth Johnson
TAG Oil Ltd., 1-604-682-6496
Email:info@tagoil.com
Website:http://www.tagoil.com/
Blog:http://blog.tagoil.com/