VANCOUVER, Sept. 2 /PRNewswire-FirstCall/ -- Oil and gas producer and explorer, TAG Oil Ltd. (TSX-V: TAO/OTCBB: TAGOF), announces that on August 30, 2008 the Cheal A7 well (TAG 30.5%), which was drilled in July, has commenced oil production through the Cheal Production Facility, onshore Taranaki Basin, New Zealand. Cheal A7 will produce through a temporary tie back for three months while permanent installations are planned. The well flow is being restricted on choke to 200 barrels of oil per day during the initial clean up phase and there was no pressure decline measured during the first 48 hour test period. The optimum flow rate will be established over the coming weeks as the well continues to warm up. TAG Oil CEO, Garth Johnson said, "The A7 well increases the present Cheal field's production to over 500 barrels of oil per day, with further existing well optimization yet to come. This well will build further on the strong financial results TAG recently filed and we look forward to continuing this momentum." About TAG Oil Ltd. TAG Oil Ltd. is a profitable oil and gas producer in the Taranaki Basin, New Zealand. TAG is well funded, debt free and is poised to grow through production, development and exploration drilling on the Company's high-graded Taranaki acreage. Forward Looking Statements: Statements contained in this news release that are not historical facts are forward-looking statements that involve various risks and uncertainty affecting the business of TAG Oil. Actual results may vary materially from the information provided in this release. As a result there is no representation by TAG Oil that the actual results realized in the future will be the same in whole or in part as those presented herein. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ from those contained in the forward-looking statements, are set forth in, but are not limited to, filings that the Company and its independent evaluator have made, including the Company's most recent reports in Canada under National Instrument 51-102 and in the United States under Forms 20-F and 6K. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. DATASOURCE: TAG Oil Ltd. CONTACT: Garth Johnson, CEO, (604) 609-3350, Website: http://www.tagoil.com/

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