TAG Oil to raise up to C$10 million to accelerate development activities and high impact drilling program
Friday, Feb 17, 2017
TAG Oil Ltd. (the “Company” or “TAG Oil”) (TSX: TAO and OTCQX: TAOIF) is pleased to announce that it has entered into an agreement with Mackie Research Capital Corporation and Pareto Securities Ltd. acting as co-lead agents and joint bookrunners on behalf of a syndicate of agents (collectively, the “Agents”), in connection with an agency offering on a commercially reasonable basis for aggregate gross proceeds up to C$10,000,250 (the “Offering”).

The Offering will consist of the offering for sale of 15,385,000 units (“Units”) of the Company at a price per Unit of C$0.65 (the “Offering Price”). Each Unit will consist of one common share of the Company (“Common Share”) and one-half of one Common Share purchase warrant (each whole warrant a “Warrant”). Each Warrant shall be exercisable into one Common Share (a “Warrant Share”) at a price of C$0.90 for 24 months following the Closing Date (defined below) of the Offering. The Company will make an application to list the Common Shares, Warrants and Warrant shares on the Toronto Stock Exchange.

In addition, the Company has granted the Agents an option (“Over-Allotment Option”) to purchase up to an additional 15% of the number of Units sold under the Offering at the Offering Price to cover over-allotments, if any. The Over-Allotment Option shall be exercisable by the Agents, in whole or in part, at any time up to 30 days following the Closing Date.

Members of the Company’s board and management will be participating in the Offering alongside investors for a minimum of $2.5 million of Units.

Closing of the Offering is expected to occur in mid-March 2017 and is subject to certain  conditions including, but not limited to, the receipt of all necessary approvals including  the approval of the Toronto Stock Exchange and the securities regulatory authorities.

The Units will be offered by way of a short form prospectus to be filed in all of the provinces of Canada (other than the Province of Québec) pursuant to National Instrument 44-101 – Short Form Prospectus Distributions and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”). This press release is not an offer of securities for sale in the United States. The Units will not be registered under the U.S. Securities Act and may not be offered or sold absent registration requirements of the U.S. Securities Act. The Units may also be offered in the U.K. and Europe pursuant to the appropriate exemptions and registration requirements.


The net proceeds of the Offering will be used for general corporate purposes, which will include the following appraisal and development activities(1):

  • In follow-up to the successful testing of the Supplejack-1 well, which tested at a rate of 1,200 boe/d over an initial 7 day period (see press release dated November 8, 2016), drilling of the Supplejack-A2X appraisal well (Q1 2017).
  • Completion and testing program to evaluate bypassed pay zones in the Cardiff-2 appraisal well geared towards unlocking a best estimate prospective resource of 160 bcf of gas and 5.5 MMbbls of natural gas liquids across three separate sand intervals in the Kapuni formation (Q2 2017), of which TAG Oil has a 100% working (2)
  • Ongoing testing of gas/condensate from the Cardiff-3 well (Q2 2017).
  • Drilling of either a Cheal exploration well or to farm-in to an existing high impact exploration opportunity in New Zealand on already identified opportunities (second half of 2017).
  • Drilling of two appraisal wells at Sidewinder East (Q1 2018).
  • Production optimization and waterflood activities across the Company’s Cheal oil fields area where the Company has identified an inventory of lower risk recompletions and development locations, which could substantially increase TAG Oil’s corporate base production.
  • TAG Oil (70% working interest) also plans to drill its high impact Pukatea well during second half of 2017 with its partner Melbana Energy Limited (30% working interest) using internal cash flow or its existing cash resources on hand. The Pukatea prospect underlies the Puka field in the Tkiorangi Limestone formation and is adjacent to the Waihapa oil field, which has produced 23 mmbbls of oil to date from the Tikorangi
  1. Timing is approximate and is subject to regulatory approval, equipment availability and
  2. Pursuant to the Sproule Report, as defined

TAG Oil expects to exit fiscal 2017 (March 31, 2017) with production of between 1,250 and 1,300 boe/d slightly ahead of guidance. Further, during the last six months, TAG Oil took five of its wellbores offline with productive capabilities of approximately 250 boe/d in aggregate. These  wells produce mainly natural gas and were shut-in to ensure best reservoir management practices.

Excluding production growth from exploration and appraisal drilling activities outlined above, TAG Oil expects to exit fiscal 2018 at over 2,000 boe/d. A portion of the growth is expected to come from the water flood and a portion from the commencement of production from Supplejack. A minor amount of production is expected from TAG Oil’s Australian operations. Additional growth from the testing of Cardiff-2 and Cardiff-3 wells could also impact production growth positively. Finally, appraisal success from any of the four planned wells to be drilled in the next 12 months would be additive to fiscal 2018 production growth.

TAG Oil has a solid balance sheet with no debt and $17.5 million in positive working capital  prior to the Offering.


TAG Oil received an average of C$66.12 per barrel for its oil and C$6.36 per Mcf for its natural gas produced during Q3 2017 (Oct-Dec/16). Due to New Zealand’s favourable fiscal regime and the sweet, light and high quality crude oil the Company produces, the Company received netbacks of C$23.86/boe during Q3 2017. TAG Oil continues to expect that its netbacks will improve as it comes off an operationally intensive quarter and as commodity prices trend higher.

This press release is not an offer or a solicitation of an offer of securities for sale in the United States. The Common Shares have not and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

About TAG Oil Ltd.

TAG Oil Ltd. is a development-stage international oil and gas producer with established high netback production, development and exploration assets, including production infrastructure in New Zealand and Australia. TAG Oil is poised for significant reserve and production growth with several oil and gas fields under development and high-impact exploration in proven oil and gas fairways. TAG Oil is debt-free and currently has 62,212,252 shares outstanding.

For more information, please visit: http://www.tagoil.com
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