TAG Confirms New Oil and Gas Discoveries in Taranaki Basin Exploration Wells Strong test results confirm

new oil and gas discoveries in the Sidewinder-2 well and the Cheal-C1 well, both located in the Taranaki Basin, New Zealand. The Sid ewinder oil and gas discoveries are located in TAG Oil's Petroleum Exploration P ermit 38748. The Cheal oil and gas discoveries are located in TAG Oil's Petroleu m Mining Permit 38156. Vancouver, BC, August 13, 2011 -- TAG Oil Ltd. (TSX: TAO) and (OTCQX: TAOIF) is pleased to report that strong test results confirm new oil and gas discoveries i n the Sidewinder-2 well and the Cheal-C1 well, both located in the Taranaki Basi n, New Zealand. Lower Mt. Messenger Oil Discovery in Sidewinder-2 Well TAG has completed isolated flow testing on oil-and-gas-bearing zones discovered in the Sidewinder-2 well. These additional productive zones were encountered in the shallower Urenui Formation and in the lower Mt. Messenger Formation, below t he main Sidewinder gas zone discovery, which tested at stabilized rates of 8.8 m illion cubic feet per day (~1467 BOE per day). Of particular importance are the oil-bearing sands Sidewinder-2 discovered in th e lower section of the Mt. Messenger Formation (~1800m), where the Company recov ered significant volumes of light oil during recent swab testing. Technical data suggests that this oil zone can produce at rates consistent with other establis hed Mt. Messenger oil wells in the immediate area. These oil-bearing Mt. Messeng er sands are interpreted to be widespread in the Sidewinder permit area and will be a primary target in future exploration wells. TAG will proceed to commercialize oil production from the lower Mt. Messenger zo ne and will acquire artificial lifting equipment that will best suit the overall Sidewinder exploration and development strategy. Also of interest in Sidewinder-2 is the gas discovered in the shallow Urenui For mation (~1400m). The Company tested clean, dry natural gas at rates ranging from 1 to 2 million cubic feet of gas per day Taranaki Basin (167- 333 BOE's per day ) utilizing various choke sizes. Production from the Urenui Formation zone can b e commercialized by comingling with the main Sidewinder gas zone. TAG CEO Garth Johnson commented, "We continue to achieve excellent exploration r esults which indicate that TAG has potentially discovered a large oil and gas fi eld at Sidewinder. In addition to the prolific main gas zone discovered, there a re now two significant high-impact discovery zones to pursue in this acreage. Th is new Mt. Messenger oil discovery will add high net-back oil production to the ~5000 BOE's of behind pipe awaiting commissioning of the Sidewinder production f acilities." The Sidewinder oil and gas discoveries are located in TAG Oil's Petroleum Explor ation Permit 38748 (TAG 100%) in the Taranaki Basin, New Zealand. Cheal-C1 Testing Confirms Oil Discovery TAG also reports that testing of the Cheal-C1 exploration well confirms the oil and gas discovery in the Cheal "C" area. Cheal-C1 intercepted oil-and-gas-bearin g sands in the Mt. Messenger Formation producing substantial volumes of light oi l during swab testing along with clean, dry gas at rates between 1.5 million to 3 million cubic feet per day. Artificial lifting equipment is now being acquired to establish daily oil produc tion rates, however the Company estimates production capabilities from Cheal-C1

to be similar to TAG's Cheal-B4ST well. This well tested 360 barrels of oil + 24 0 thousand cubic feet of gas per day. The Cheal-C1 well also encountered strong oil shows within a 73-meter-thick sect ion of sandstone within the deeper Moki Formation. The Moki zone was tested but commercial flow rates were not achieved. TAG's technical interpretation indicate s that Cheal-C1 penetrated a "transitional zone" where oil migrated through the contacted zone into a large structural closure, updip from the Cheal-C1 penetrat ion. Given the extensive oil shows recorded while drilling coupled with the exce llent reservoir quality interpreted from electric logs, TAG will plan a new well that will directly target the Moki Formation prospect, drilled from a more opti mal location on the structure. TAG CEO Garth Johnson said, "I'm pleased to achieve such positive results from t he Cheal-C1 well, significantly expanding the Cheal development area. We expect to commercialize the Cheal-C1 discovery in conjunction with appraisal drilling i ncluded in our next drilling campaign, scheduled to start in September 2011." The Cheal oil and gas discoveries are located in TAG Oil's Petroleum Mining Perm it 38156 (TAG 100%) in the Taranaki Basin, New Zealand. TAG Oil Ltd. TAG Oil Ltd. (http://www.tagoil.com/)is a Canadian-based production and explorat ion company with operations focused exclusively in New Zealand. With 100% contro l over all its core assets, including oil and gas production infrastructure, TAG is anticipating substantial oil and gas production and reserve growth through d evelopment of several light oil and gas discoveries. TAG is also actively drilli ng high-impact exploration prospects identified across more than 2,600 sections of land in the onshore Taranaki and East Coast Basins of New Zealand's North Isl and. In the East Coast Basin, TAG Oil is pursuing the significant unconventional reso urce potential estimated in the fractured shale source-rock formations that are widespread over the Company's acreage. These oil-rich and naturally fractured fo rmations have many similarities to North America's Bakken Shale source-rock form ation in the successful Williston Basin. 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 ra tio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primaril y 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 forw ard-looking statements that involve various risks and uncertainty affecting the business of TAG Oil. All estimates and statements that describe the Company's ob jectives, goals, or future plans, including the drilling plans and flow testing related to the exploration, testing, development and commercialization of produc tion of TAG Oil's Sidewinder oil and gas discovery wells, the Cheal-C1 oil and g as discovery well and the Moki Formation located in the Taranaki Basin of New Ze aland, are forward-looking statements under applicable securities laws and neces sarily involve risks and uncertainties including, without limitation: risks asso ciated with oil and gas exploration, development, exploitation, production, mark eting and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, and changes i

n the regulatory and taxation environment. These forward-looking statements are based on certain factors and assumptions. Consequently, the Company's actual res ults may vary materially from the information provided in this release and there is no representation by TAG Oil that actual results realized in the future woul d be the same in whole or in part as those presented herein. Additional risk factors and uncertainties that could cause actual results to dif fer 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 Annual Information Form and its most recent repor ts in Canada under National Instrument 51-101. Contact: Dan Brown TAG Oil Ltd 1050-2901 Burrard St Vancouver, B.C. V6Z 2S3 6046826496 media@tagoil.com http://www.tagoil.com