TAG Oil Ltd. has secured a revolving credit facility of up to US$10,000,000 with a large New Zealand based lender.

The revolving credit facility, which is secured against TAG Oil’s producing Taranaki Basin assets, has been put into place for an initial period of 12 months. The facility can be drawn by TAG Oil upon request, with balances charged at an interest rate of LIBOR + 3.0% per annum. As part of the credit facility, TAG Oil has agreed to hedge approximately 400 bbl/d of oil production for the 12-month period using a collar with a US$60/bbl floor and a US$75/bbl cap.

Production from TAG Oil’s Taranaki Basin assets remains steady, with current net productionof approximately 1,250 boe/d (75% oil). With Brent oil pricing at US$65/bbl or better, TAG Oil is forecasted to generate net operating revenue of approximately C$1.4mm per month.

Over the coming months ahead, TAG Oil will remain focused on low-risk, infield operations with a view to incrementally grow high netback production in Taranaki. These operations include bringing behind pipe production online, waterflood improvements, field optimization and potential commercialization of the Puka and Supplejack fields.

In addition, TAG Oil is continuing to expand its exploration prospect portfolio in Taranaki and in its 100% controlled PL-17 mining licence in the Surat Basin of Australia, where significant exploration prospects have been identified.

Stock Option Grant

TAG Oil also announces the approval to grant up to 2,400,000 share options at a price of $0.50 per share to various directors, executive officers, employees and consultants. This is part of TAG Oil’s ongoing strategy of granting share options to attract and retain talent, as well as motivating its team to work towards ensuring the success of TAG Oil.