TAG Oil Ltd., Vancouver, (TSX: TAO) (OTCQX: TAOIF) has reported that the initial flow test of the Sidewinder-3 discovery well is now complete. The Sidewinder-3 well is located in TAG Oil's 100% controlled Petroleum Exploration Permit 38748 in the Taranaki Basin, New Zealand, where TAG has now drilled four successful discovery wells to date.

Located 1.1 km to the south of the Sidewinder-1 discovery, the Sidewinder-3 well was drilled to a total depth of 2,160 meters (7,085 feet), encountering 15.4 meters (50 feet) of net gas-bearing sandstones. With the four wells drilled to date, the interpreted total hydrocarbon column at Sidewinder exceeds 60 meters (196 feet) in thickness, with no water column evident in any of the Sidewinder wells.

A 4-Point Isochronal test on the Sidewinder-3 discovery well achieved a stabilized flow rate of 7.2 million cubic feet per day (1200 BOE per day) with less than a 50% drawdown. These results are consistent with the Sidewinder-1 well flow test, which achieved stabilized flow rates of 8.5 million cubic feet of gas plus 44 barrels of oil per day (1461 BOE per day) from 14m (46 feet) of net pay encountered.

Further reservoir engineering analysis of the 4-point Isochronal test for the Sidewinder-1 well, calculated the absolute open flow rate to be 30 million cubic feet of gas per day or 5000 barrels of oil equivalent per day. A similar analysis will be completed on Sidewinder-3 once the down hole gauges are retrieved in approximately two weeks.

"The strong flow rates we are achieving in the Sidewinder wells support our decisions to expand the through put capabilities as well as fast-tracking the construction of the new production facilities. As a result, we are on-track to produce the first oil and gas from the Sidewinder discoveries by August 2011," says Garth Johnson, chief executive officer. "Our Sidewinder acreage is proving to be a very exciting and prolific discovery area that we believe can provide TAG with substantial near-term production increases, as well as significant reserve growth. We also look forward to flow testing the recent Sidewinder-2 and Sidewinder-4 discoveries, and continuing our pursuit of the many high-impact exploration opportunities TAG has identified on 3D seismic permit-wide."

TAG also reports that the service rig has now been moved onto the Sidewinder-4 discovery well for flow testing. The Sidewinder-4 penetration is approximately 1 km to the east of the Sidewinder-1 well and encountered 19 meters (62 feet) of net oil-and-gas bearing sandstones. Once the Sidewinder-4 flow test is complete, the service-rig will move to the Sidewinder-2 well, which encountered 47 meters (154 feet) of net oil-and-gas bearing sandstones to the west of Sidewinder-1 well.