November 16, 2012

TAG OIL LTD. (TAO-T, $6.37)

Recommendation: Strong Buy; Target: $14.50

Analyst: Ryan Galloway, CFA, CMA (403) 879-2777 RGalloway@casimircapital.ca Associate: Jin Yan (403) 879-2782 JYan@casimircapital.ca

Key Infrastructure Work at Cheal & Sidewinder Remains on Track for Q1; Short Term Change to Oil Mix Briefly Reduces Cash Flow as Work Proceeds
Projected Total Return Market Data 52-Week Trading Range Median Weekly Volume Shares Outstanding, Basic (mm) Shares Outstanding, Diluted In-the-Money (mm) Market Capitalization ($mm) Estimated Net Debt (Cash) Q4/12 ($mm) Potential Dilutive Proceeds ($mm) Enterprise Value ($mm) Forecasts Fiscal Year End: Mar 31 Average Gas Production (mcf/d) Average Oil & Liquids (bbls/d) Average Total Production (boe/d) Percentage Oil Realized Gas Price ($/mcf) Realized Oil & Liquids Price ($/bbl) Modeled Revenues ($mm) CF From Operations ($mm) Year-End Net Debt (Net Cash) ($mm) Capex (ex A&D) ($mm) Net Debt / Cashflow (x) Per Share ($) EPS ($, FDTSM) CF From Operations (FDTSM) DACF/sh (Diluted, In-The-Money) P/E (x) EV/DACF (x) EV/(Avg Boe/d) Asset Values 1P Proved Reserves (2012) Probable Reserves (2012) 2P Proved Plus Probable Reserves (2012) Working Capital at 2013FYE Proceeds from Dilutive Securities Other Estimated Reserve Additions 2013 127.6% $4.80 - $10.99 787,913 59.7 63.5 $404.2 $(75.4) $23.1 $305.8

Operating results generally in line, with cash flow temporarily down on ops impact to product mix TAG produced 1,848 boe/d in the quarter, with an FFO of $4.4mm versus expectations of $9mm. The cash flow difference was driven primarily by a change in product mix, with oil temporarily reduced (by ~300 bbls/d vs. estimates) from Cheal wells shut-in during infrastructure work, offset by better than expected gas rates from Sidewinder compression facility commissioning. 16 behind pipe Cheal and Sidewinder wells to be tied in following infrastructure upgrades Infrastructure work at Cheal and Sidewinder continues to press forward with all landowner agreements signed & consented during the quarter. With work completing for Q1/13, we should see a minimum of 3,000 boe/d of behind pipe production coming from 16 current wells, with upside from further drilling. Shale exploration drilling with Apache remains on track for Q2/13 post well site construction Tag and Apache (each 50% W.I.) continue to prep for a 4-well drilling campaign in the East Coast Basin, as the JV continues to seek final approvals from regulatory authorities and regional councils. Multiple drilling targets have already been identified from 2D seismic data. Upside for the region could be worth up to $10.28/sh risked. Maintaining $14.50 Target as behind-pipe tie-in progress continues at Taranaki Our target is derived from a F2013E NAV of $6.86/sh, plus incremental risk adjusted value of $4.77/sh for other Taranaki & partial incl. of East Coast Shale (up to $10.28/sh risked).
Casimir Capital Ltd., Member of IIROC and the CIPF Toronto, Ontario M5H 4E5, Canada 145 Adelaide St. W, Suite 200

2011A 606 413 514 80% 86.00 13.1 (1.2) (68.3) 15.6 n/a $(0.01) $(0.03) $(0.03) n/a n/a n/a

2012A 3,090 918 1,433 64% 4.16 115.57 42.9 15.6 (65.5) 44.9 n/a $0.23 $0.29 $0.26 27.4x 18.8x $213,377

2013E 5,318 1,328 2,215 60% 4.08 103.53 56.5 33.9 (54.5) 81.9 n/a $0.28 $0.56 $0.53 22.6x 9.2x $138,070 (m m ) $ 91.85 $ 65.03 $ 156.88 $ $ $ 54.46 23.06 $ $ $ $ $ $ $

2014E 20,210 3,084 6,452 48% 5.25 97.97 149.0 82.6 (67.1) 70.0 n/a $1.05 $1.37 $1.30 6.1x 3.7x $47,392 /sh 1.45 1.02 2.47 0.86 0.36 3.16

$ 200.64 64 50 22 595 302

EMV of Exploration & Developm ent Projects - Taranaki Basin Gross Unrisked Recoverable Resource (mmboe) Net Unrisked Recoverable Resource (mmboe) Net Risked Recoverable Resource (mmboe) EMV ($mm) Success $ EMV ($mm) Risked $

$ $

9.38 4.77

EMV of Exploration & Developm ent Projects - East Coast Basin Gross Unrisked Recoverable Resource (mmboe) 718 Net Unrisked Recoverable Resource (mmboe) 359 Net Risked Recoverable Resource (mmboe) 74 EMV ($mm) Success $ 3,129 EMV ($mm) Risked $ 652

$ $

49.31 10.28

Price

Volume (000s)

$12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 16-Nov-11 16-Mar-12 16-Jul-12

2,000 1,500 1,000 500 0

Source: ThomsonOne, Company Reports, Casimir Capital Ltd.

TAG OIL LTD.

Figure 1: Reserves and Forecast Net Asset Value for Fiscal 2013E
Volumes Proved Producing Proved Non-Producing Undeveloped Total Proved (1P) Total Probable Total Proved + Probable (2P) NPV ($mm) Proved Producing Proved Non-Producing Undeveloped Total Proved (1P) Total Probable Total Proved + Probable (2P) Oil mmbbl 0.8 1.7 2.5 2.9 5.4 Gas bcf 0.8 4.2 5.0 2.3 7.3 NGLs mmbbl 0.0 0.0 0.0 0.0 Total mmboe 1.0 2.4 0.0 3.3 3.3 6.6 % of Total 14.6% 35.8% 0.0% 50.4% 49.6% 100.0%

40.2 51.7 0.0 0.0 0.0 0.0 0.0 0.0 91.9 65.0 156.9

25.6% 32.9% 0.0% 58.6% 41.4% 100.0%

Other NAV Components Value of Undeveloped Land Proceeds from Dilutive Securities Plus (Minus) Working Capital at Fiscal 2013 Year-End Estimated Core NAV ($mm) Estimated Core NAV (per Share)

$0.00 $23.06 $54.46 $234.40 $3.69

Forecast Changes to Reserves 2013 Proven Producing Non-Producing and Undeveloped Total Reserve Additions Estimated Reserve Deductions from Production Net Risk-Adjusted F2013E Reserves Additions Risk-Adjusted F2013E Core Asset NAV ($mm) Risk-Adjusted F2013E NAV (per Share)
Source: Company Reports, Casimir Capital Ltd.

mmboe 6.4 2.5 8.9 0.8 8.1

NPV/boe $28.49 $20.60 $26.26 $41.56 $24.73

NPV (mm) $182.3 $51.9 $234.2 $33.6 $200.6 $435.04 $6.86

Analyst: Ryan Galloway, CFA, CMA (403) 879-2777 RGalloway@casimircapital.ca Associate: Jin Yan (403) 879-2782 JYan@casimircapital.ca

Casimir Capital Ltd., Member of IIROC and the CIPF Toronto, Ontario M5H 4E5, Canada 145 Adelaide St. W, Suite 200

TAG OIL LTD.

Figure 2: Risk Adjusted EMV of Upside in Taranaki Basin (50% Inclusion)
Region / Project Initial COS Capital/Exploration (%) Cost ($mm) $0.00 $0.00 $10.00 $25.00 $20.00 $55.00 80% 65% 30% 10% 20% Working Participating Interest Interest (%) (%) 100.0% 100.0% 100.0% 20.0% 100.0% 100.0% 100.0% 100.0% 20.0% 100.0% Gross Unrisked Recoverable Resource (mmboe) 11.5 9.0 12.1 17.4 13.7 63.7 Success Case NPV/boe $20.00 $20.00 $10.00 $16.00 $8.00 NPV Time Value Adjustment 0.91 0.91 0.79 0.65 0.83 EMV/sh EMV/sh ($) Success ($) Risked $3.30 $2.58 $1.51 $0.57 $1.43 $9.38 $2.64 $1.68 $0.37 $0.01 $0.08 $4.77

Cheal Oil and Gas Sidewinder Gas Cardiff Gas/Condensate Kaheru Offshore Hellfire Gas/Condensate Total

Source: Company Reports, Casimir Capital Ltd.

Figure 3: Risk Adjusted EMV of Upside in East Coast Basin (50% Inclusion)
Region / Project Initial Working Participating Gross Unrisked COS Capital/Exploration Interest Interest Recoverable (%) Cost ($mm) (%) (%) Resource (mmboe) Success Case NPV/boe NPV Time Value Adjustment EMV/sh EMV/sh ($) Success ($) Risked

Waitangi Hill Oil Boar Hill Oil Waipawa Black Oil Shale Whangai Oil Shale Total

$10.00 $10.00 $40.00 $40.00 $100.00

25% 25% 20% 20%

50.0% 50.0% 50.0% 50.0%

0.0% 0.0% 0.0% 0.0%

50.1 35.5 260.4 372.4 718.4

$20.00 $20.00 $16.00 $16.00

0.62 0.62 0.51 0.51

$4.90 $3.47 $16.85 $24.09 $49.31

$1.23 $0.87 $3.37 $4.82 $10.28

Source: Company Reports, Casimir Capital Ltd.

Figure 4: Target Derivation

Valuation Method: Net Asset Value and Risk-Adjusted EMV

Value Estimated Core Asset NAV 2012 Estimated Risk-Adjusted NAV Additions Forecast Risk-Adjusted F2013E Core Asset NAV EMV of Risk-Adjusted Incremental Upside - Taranaki Basin EMV of Risk-Adjusted Incremental Upside - East Coast Basin Valuation
Source: Company Reports, Casimir Capital Ltd.

Inclusion 100% 100%

$3.69 $3.16 $6.86 $4.77 $10.28

Valuation Build-Up $3.69 $3.16 $6.86 $2.38 $5.14 $14.38

50% 50%

Analyst: Ryan Galloway, CFA, CMA (403) 879-2777 RGalloway@casimircapital.ca Associate: Jin Yan (403) 879-2782 JYan@casimircapital.ca

Casimir Capital Ltd., Member of IIROC and the CIPF Toronto, Ontario M5H 4E5, Canada 145 Adelaide St. W, Suite 200

TAG OIL LTD.

Company Name TAG Oil Ltd. Disclosures 1

Disclosure List
1. 2. 3. 4. 5. 6. 7. Within the last 12 months, Casimir or its affiliates have provided investment banking and/or related services for remuneration from the subject issuer. Within the last 12 months, a director, officer, or analyst with Casimir has provided services for remuneration, other than investment advisory or trading services, to the subject issuer. The research analyst(s) or associate(s) or a member of the research analyst's(s) or associate's(s) household has a long position in the shares and/or is long calls/short put options of the subject issuer. Casimir or its affiliates is a market maker, or is associated with the specialist that makes a market in the securities of the subject issuer. Casimir or its affiliates collectively beneficially own 1% or more of any class of the issuers equity securities. An employee, officer, or director of Casimir is a member of the Board of Directors, Officer of, or an advisor to, the subject issuer. The research analyst(s) has viewed the material operations of the subject issuer.

8. 9.

Casimir Capital Ltd. has a conflict of interest with the subject issuer. The research analyst(s) and/or their associate(s) has a conflict of interest with the subject issuer.

Analyst Certification: Each analyst of Casimir Capital Ltd. whose name appears in this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analysts personal views about any and all of the securities or issuers discussed herein that are within the analysts coverage universe and (ii) no part of the research analysts compensation was, is, or will be, direct or indirectly related to the provision of specific recommendations or view expressed by the research analyst in the research report. The compensation of Research Analysts and Research Associates is intended to reflect the value of the services they provide to the clients of Casimir Capital. As with most other employees, the compensation of Research Analysts is impacted by the overall profitability of the firm, which may include revenues from investment banking activities of the firm's Corporate Finance department. Research Analysts' compensation is not, however, directly related to any specific corporate finance transactions. Distribution Policy: Casimir endeavours to make all reasonable efforts to disseminate research to all eligible clients in a timely manner through either physical or electronic distribution such as mail, fax, email, or by posting to Casimir proprietary websites. Disclaimer: This report has been prepared by Casimir Capital Ltd. (Casimir) Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information contained herein is for information purposes only and this report is not, and is not to be construed as, and offer to sell or a solicitation of an offer to buy any securities. The information and opinions contained herein have been compiled or derived from the sources believed reliable, but no representation or warranty, expressed or implied, is made to their accuracy or completeness. Neither Casimir nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents. Casimir and/or its affiliates may have acted as financial adviser and/or underwriter for certain of the issuers mentioned herein and may have received remuneration for such services. Casimir, its affiliates and/other respective officers, directors and employees may from time to time acquire, hold or sell positions in the securities mentioned herein as principal or agent. Affiliate Related Disclosures: TAG Oil Ltd. (the subject company) is a client of Casimir Capital L.P. and its affiliate Casimir Capital Ltd. and has been a client during the 12-month period preceding the date of distribution of this research report. During aforementioned period, Casimir Capital L.P. and its affiliate Casimir Capital Ltd. have provided investment banking services to the subject company and have received investment banking or non-investment banking related fee or compensation from the subject company. Casimir Capital L.P. and its affiliate Casimir Capital Ltd. intend to seek compensation for investment banking services from the subject company during the next 3 months. This report has been prepared by Casimir Capital Ltd., not Casimir Capital L.P. and is therefore deemed by Casimir Capital L.P. to be a Third-Party Research Report as per FINRA rules and regulations. This report is distributed in the United States by Casimir Capital L.P. as a Third-Party Research Report. United States recipients are required to effect transactions in securities discussed in the report through Casimir Capital L.P. and not Casimir Capital Ltd.

Analyst: Ryan Galloway, CFA, CMA (403) 879-2777 RGalloway@casimircapital.ca Associate: Jin Yan (403) 879-2782 JYan@casimircapital.ca

Casimir Capital Ltd., Member of IIROC and the CIPF Toronto, Ontario M5H 4E5, Canada 145 Adelaide St. W, Suite 200

TAG OIL LTD.

Investment Ratings System
Casimirs system for rating oil & gas investment opportunities assumes that these securities have higher levels of risk than the broader stock market. As a result, our oil and gas research evaluates securities primarily on a return basis. In addition, due to a variety of factors including but not limited to market conditions, political risk, and news flow, we may at our discretion adjust our investment ratings to reflect short-term trading conditions that are different than our long-term view of the returns on specific securities. Below is a summary example of these investment ratings: Investment Rating Speculative Buy Rating Description A security, which at the time the rating is instituted and or reiterated, indicates an expectation of exceptionally strong returns but the risk of a significant loss is materially higher than other oil and gas companies. A security, which at the time the rating is instituted and/or reiterated, indicates that we expect it to significantly outperform the broader market. A security, which at the time the rating is instituted and/or reiterated, indicates that we expect it to modestly outperform the broader market. A security which at the time the rating is instituted and/or reiterated, indicates that we expect the security to perform at levels comparable to the broader market. A security which at the time the rating is instituted and/or reiterated, indicates that the security is likely to underperform the broader market. Casimir Capital Ltd. does not have an opinion or expectation as to the price of the security.

Strong Buy

Buy

Hold

Sell

Not Rated

Analyst: Ryan Galloway, CFA, CMA (403) 879-2777 RGalloway@casimircapital.ca Associate: Jin Yan (403) 879-2782 JYan@casimircapital.ca

Casimir Capital Ltd., Member of IIROC and the CIPF Toronto, Ontario M5H 4E5, Canada 145 Adelaide St. W, Suite 200

TAG OIL LTD.

CASIMIR CAPITAL LTD.

145 Adelaide St. W, Suite 200 Toronto, Ontario M5H 4E5, Canada

MEMBER OF IIROC & CIPF

Analyst: Ryan Galloway, CFA, CMA (403) 879-2777 RGalloway@casimircapital.ca Associate: Jin Yan (403) 879-2782 JYan@casimircapital.ca

Casimir Capital Ltd., Member of IIROC and the CIPF Toronto, Ontario M5H 4E5, Canada 145 Adelaide St. W, Suite 200