TAG Oil Reports Second Quarter 2011 Financial Results and Operational

Highlights

TAG Oil Ltd., (TSX-V: TAO) a Canadian-listed, New Zealand-focused oil production and
exploration company, has filed its second quarter financial report for the period ended September
30, 2010.

Vancouver, BC, Canada, December 16, 2010 --(PR.com)-- TAG Oil Ltd., (TSX-V: TAO) a
Canadian-listed, New Zealand-focused oil production and exploration company, is pleased to provide an
operational update and advises that the Company has filed its second quarter financial report for the
period ended September 30, 2010. All figures reported are in Canadian dollars unless otherwise noted.

TAG Recent Highlights:

- Production revenue for second quarter of $2.41 million.
- Successful workover operations completed on Cheal-B3 and Cheal-1 increase daily production.
- TAG acquires Cardiff condensate-rich deep gas discovery.
- Sidewinder-1 oil and gas discovery in PEP 38748 is drilled.
- Cheal-BH-1 horizontal well is drilled and completed.
- $60 million bought-deal equity financing closed.
- Rig agreement signed for five wells, with an additional five-well option starting early 2011.

Taranaki Basin Operations

TAG is anticipating substantial near-and-long-term production growth in Taranaki through development

of multiple oil and gas discoveries within the Company's 100%-controlled Taranaki Basin assets. The
Company plans to drill up to 10 prospects identified on 3-D seismic coverage, commencing in early 2011.
This program consists of development and step-out wells within Cheal and further exploration wells in
the Sidewinder project area.

For further information on TAG Oil's Operations please visit http://www.tagoil.com/operations.asp

Sidewinder-1 Oil / Gas Discovery

TAG plans to immediately proceed with development and the commercialization of Sidewinder-1. The
Sidewinder-1 exploration well was drilled to 1601m and encountered 14m of net (22m gross)
oil-and-gas-bearing sandstones with excellent reservoir porosities and permeability. A 10-day production
test recorded stabilized flow rates of 1461 barrels of oil equivalent ("BOE") per day, consisting of 8.5
million cubic feet of gas and 44 barrels of oil per day.

Subsequent interpretation of bottom hole pressure build-up data indicated no measurable pressure
depletion, and the extended unrestricted flow rate was calculated at 30 million cubic feet of gas per day.
Production forecast modeling has focused initially on gas to date and results indicate the initial flow rates
anticipated from Sidewinder-1 to be greater than 10 million cubic feet of gas per day declining over 36

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months to rates still in excess of 5 million cubic feet of gas per day. Production profiles and facility plans
also anticipate oil contributing more significantly to daily flow rates over time, which would be consistent
to analogous oil and gas fields nearby Sidewinder.

With Sidewinder's close proximity to existing gas and oil infrastructure, combined with New Zealand's
low royalties and oil and gas prices that are substantially higher than in North America, development of
the Sidewinder discovery will be cost-effective, efficient and commercially attractive.

Cheal Oil and Gas Field

Cheal-B3, the second Mt. Messenger vertical well that TAG Oil recently optimized, has recorded
significantly improved oil and gas production rates during the 50 days since the workover was completed.

Cheal-B3 is currently producing 330 BOE per day (290 barrels of oil and 40 BOE of gas per day)
compared to 156 BOE per day (140 barrels of oil and 16 BOE of gas) prior to the workover operations.

The Cheal-BH-1 horizontal well reached total depth of 2285m, including a 550m horizontal section
within the Mt. Messenger Formation (1735-2285m). Uphole mudlogs have recorded better than expected
oil and gas shows within the secondary Urenui Formation target at a depth of approximately 1400m. In
the Mt. Messenger horizontal section of the well, a total of 430m of continuous reservoir was encountered
with high oil and gas readings during the drilling operations. The multi-phase fracture stimulation of the
horizontal section of the well has now been completed and the Company has mobilized a coil-tubing unit
to prepare the well for production testing, commencing approximately December 5, 2010.

Current production from the Cheal Field is 570 BOE per day consisting of 490 barrels of oil and 80 BOE
of gas per day.

Summary of Second Quarter Results

The Company recorded production revenue of $2.41 million (six months: $4.23 million) and a net loss for
the three-month period of $508,823 (six month loss: $389,384). Expenditures on the Company's oil and
gas properties during the quarter totaled just under $3.5 million (six months: $5.3 million) relating
primarily to costs of the Cheal-B3 and Cheal-1 optimization operations and the Cheal-BH-1 horizontal
well and the Sidewinder-1 vertical exploration well.

Liquidity and Capital Resources

The Company ended the second quarter of the 2011 fiscal year with 37,646,608 shares outstanding
(44,291,060 fully diluted) with no debt, $23.96 million in cash and $22.9 million in working capital.

Subsequent to September 30, 2010 the Company issued a total of 11,550,000 common shares at a price of
$5.20 per share for aggregate gross proceeds of $60,060,000, inclusive of the over-allotment option
granted to the Underwriters.

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This news release summarizes the Company's 2011 second-quarter results of operations and financial
condition and should be read in conjunction with its Quarterly Report, which contains unaudited
consolidated financial statements and Management's Discussion and Analysis. Copies of these documents
can be obtained electronically at: www.sedar.com or through the Company's website
http://www.tagoil.com/financial-reports.asp.

Contact:

Dan Brown or Garth Johnson

TAG Oil Ltd. 1-604-682-6496
Website: http://www.tagoil.com

"BOE"s 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 Anticipated Results and 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. These statements are based on
certain factors and assumptions including those relating to TAG Oil's successful exploration and
development of its oil and gas properties within Cheal and the Sidewinder project area, the production of
oil and gas in accordance with TAG Oil's expectations at Cheal and at Sidewinder-1, oil and gas price
assumptions and fluctuations, foreign exchange rates, expected growth, results of operations,
performance, prospects, evaluations and opportunities and effective income tax rates. 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 all of its current property
holdings, with the exception of the Cheal Oil Field and Sidewinder-1 project area, 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. But, 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 related to upcoming operations, production forecast modeling and other items that are set forth
in, but are not limited to, filings that the TAG Oil and its independent evaluator have made, including the

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TAG Oil's most recent reports in Canada under National Instrument 51-101.

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.

###

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Contact Information:
TAG Oil Ltd.
Dan Brown
1-604-682-6496
media@tagoil.com
www.tagoil.com

Online Version of Press Release:

You can read the online version of this press release at: http://www.pr.com/press-release/281463

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