Exploring for Oil and Gas in New Zealand

Stable Government, Low Costs and Above-Average Energy Value
New Zealand is an economically developed country where TAG Oil can continue to explore, develop and produce, enjoying the benefits of an international oil and gas portfolio without the political and economic disadvantages associated with many other parts of the world. New Zealand's permitting regime and fiscal terms are ranked among the best in the world, oil produced is sold at premium world prices, and there is a thriving domestic natural gas market.

Multiple Basins with Multiple Opportunities
Most of the exploration attention in New Zealand has been focused around the Taranaki Basin. This Basin covers an area of about 100,000 sq km, but with only 125 wildcats drilled since 1955, this commercially proven basin is still in infancy. With proved oil reserves of 528 million barrels and proved gas reserves of 6.9 trillion cubic feet, TAG has found fertile hunting grounds in Taranaki.

Many basins exhibit dramatic oil and gas seeps, and exploration data reveals multiple structures with hydrocarbon potential. Encouraging discoveries have also been made in the offshore Canterbury and Great South Basins where ExxonMobil and Origin Energy are exploring. Start-up Kea Petroleum is in the preliminary stages of exploring in the Northland Basin, a remote area once explored by ConocoPhillips.

A Ready Market with Built-In Demand: New Zealand's Natural Gas Supply Dwindles For 40 years, Taranaki's giant offshore Maui Field has dominated the gas market in New Zealand by meeting nearly 90% of demand at costs far below world prices. However Maui is in rapid decline. The Pohokura gas field came on-stream in 2006, replacing some of the declining production, but there is no doubt that new gas field discoveries are needed soon. With strong public resistance to coal-fired power plants, hydroelectric dams and nuclear-power stations, no viable alternative to natural gas currently exists in New Zealand. This presents a unique opportunity for exploration companies like TAG Oil to create value when gas demand is at its maximum and energy alternatives are at a minimum.

For the more information on New Zealand oil and gas exploration, as well as the latest news, maps and publications, please access New Zealand's Crown Minerals website.