TAG Oil Ltd (TAOIF)

[JB3729]

It would be nice if that poster was accurate.

I'm fairly new to the oil and gas sector, however, I'm pretty sure that $5.47 mil/day of cash flow from Sidewinder is way overstated.

A barrel of oil equivalent (gas) doesn't generate the same revenue as a barrel of oil.

For the qtr ended 9-30-11, Tag recieved $4.04 of revenue for 1 mcfg, or $4,040 for 1 mmcfg. 1 mmcfg equals 170 barrels of oil. 170 barrels of oil x $110 = $18,700. Thus, a barrel of oil is worth more than 4 1/2 times a barrel of oil equivalent (gas).

The 12/5/11 news release stated that Cheal B5 flowed 1870 boe/day consisting of 1700 barrels of oil and 1 million cubic feet of gas per day. Hence, 1 mmcfg = 170 barrels of oil.

The $4.04 number came from the 11/14/11 MD&A on Sedar.

Cash flow - $4,040 per mmcfg less 5% royalty = $3,838 less General and Administrative Expenses = approximately $3,500(?)

$3,500 X 30 mmcfg/day = $105,000 cash flow per day from Sidewinder. This is still $9,000,000 per qtr providing there is extra flow from the wells to make up for depletion and keep Sidewinder operating at 30 mmcfg/day.

I'd appreciate any corrections or additions.

JB