TAG Oil Ltd. provides cash flow and production guidance for the fiscal year 2015. The company estimates cash flow from operations of approximately $40 million, with production averaging approximately 2,000 barrels of oil equivalent per day (BOE/D) net to TAG for fiscal year 2015 with oil contributing 80% to daily production estimates. This guidance is based on TAG's shallow development wells and existing production: additional success on the Company's current and ongoing exploration programs could have significant impact on this guidance. This guidance assumes initial production rates of 150 bbls of oil + 50 BOE/D of gas in seven new shallow Taranaki wells to be drilled. The capital budget for fiscal year 2015 is CAD 60 million; funded entirely by forecasted cash flow and working capital on hand. The capital budget spend will focus on three key components: low-risk shallow development drilling, high-impact deep and offshore drilling in the Taranaki Basin, and the fractured source rock prospects on the East Coast.

The company successfully drilled and cased the Cardiff-3 well to total depth of 4,853m. The well intercepted 230 meters of potential oil-and-gas bearing sands in numerous zones within the Kapuni Formation. The deepest of three zones identified for further completion, the K3E zone, was perforated and hydraulically fractured. The following parameters were independently interpreted from that fracture stimulation: The reservoir pressure is 10,400psi; The reservoir contains hydrocarbon gas with low (7%) CO2; The reservoir pressure and induced perforation pressure was suitable to give a 3,000psi drawdown; Original permeability was 0.17mD to 1.2mD; and The K3E zone produced gas, oil and condensate with no formation water, but not at the commercial rates expected, given the above parameters. Independent experts and further analysis has concluded that either the fracture stimulation was affected by a poor cement bond over the interval, or skin damage must exist in the near wellbore area, restricting flow. As a result, TAG is now planning to move uphole and initiate testing on the second of the three identified potential zones, where there is a competent cement bond in place, while incorporating the results of the K3E zone to the overall completion strategy for the well. Offshore Kaheru Prospect: Planning and preparations are now underway to drill the shallow-water Kaheru-1 well (TAG-40%) to a total depth of 4,400 meters. The Kaheru Prospect is a large well defined Miocene-age four way dip closure, situated in a discovery trend that is referred to as the "last pearl" in a string of discoveries. On May 31, 2011 Sproule International Limited, a qualified reserves evaluator in accordance with NI 51-101 and the Canadian Oil and Gas Evaluation Handbook estimated the Kaheru Prospect to have potential cumulative undiscovered petroleum initially-in-place, net to TAG, of over 17.4 million barrels of oil on a mid-range (P50) basis. In 2015 fiscal year, the company will drill six development wells within the Cheal and Greater Cheal area. Four of these wells will be drilled with a 100% interest; one well drilled will be at a 70% interest in the new Cheal-E site acreage, and one well has already been drilled at Southern Cross at a 50% interest.