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High Netback Oil and Gas Production

Measuring pressure at the Sidewinder-1 gas flare Taranaki Production
TAG produces high-quality oil from the Taranaki Basin, which is sold primarily to Australian and Asian refineries, receiving Asia-Pacific Tapis pricing — typically at a premium to West Texas Intermediate because of its low sulfur content.

And the natural gas we produce in Taranaki, such as from the Cardiff development, is sold into New Zealand's thriving gas market via a three kilometer tie-in linking TAG's gas infrastructure to the high-capacity LTS gas pipeline and the gas-hungry North Island. Strong demand for natural gas in the Taranaki region, coupled with tight supply, has driven gas pricing to significant premiums well above North American gas pricing.

East Coast Basin oil and gas prospects
New Zealand's strong gas demand with tight gas supply makes Cardiff a strategic asset in the heart of extensive infrastructure.

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 more new gas field discoveries, like TAG's Cardiff gas/condensate discovery 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. We look forward to developing Cardiff to its greatest potential.

East Coast Basin Production Opportunities
Oil from the East Coast Basin is premium quality (50 degree API) and can be easily transported to the nearby ports of Napier or Gisborne for delivery into the Asian market. There is currently minimal gas infrastructure in the East Coast, however there is a thriving forestry, pulp and paper industry, which is one of the largest consumers of electricity in the country. A lack of available electricity results in long term and expensive transport via long-range transmission lines. But a local energy source, such as major gas reserves, can be converted to in situ electricity via gas-fired generators.