TAG Oil Ltd (TAOIF)

[DANA1]

ariadnddough

There is not doubt that right now TAG is the safer and more established play and I am in no way suggesting anyone dump their TAG shares for NZEC. I am only bringing this to the attention of those who might be looking at an add-on.

What I like about NZEC is that they do have one producing well (580 BOPD)Copper Moki 1 (CM1) and are currently drilling CM2 with CM3 to immediately follow. All wells are being drilled from the same platform so potential is for similar results as CM1.

Secondly, they are currently drilling Ranui 2 on the East Coast which is right next door to TAG. If this hits, this will take not only this stock but TAG into the next level as if they are successful then surely TAG/Apache will be also.

3rdly, they have infrastructure in place to handle all the oil for CM1, CM2 and CM3. If they get enough gas then yes they will have to put in infrastructure to bring the gas to market. Right now they are producing mostly oil and generating cash flow at a higher rate than TAG did until earlier this year.

I did ask the question about raising funds and they felt that they would do so after they see the success of their current drilling program, which they have the money for. It seems like they are leaning initially towards debt versus share dilution, but I'm sure that decision will be made by people smarter than me.

580 BOPD is over $1.7 million per month cashflow so raising money will not be their immediate problem unless they plan a major drilling program and need to fund. If CM2 & CM3 hit they could double or triple their current cashflow.

I have no idea what it might take to bring East Coast production on-line but I wouldn't be too surprised to see a farm out agreement like TAG has with Apache.

One final thing is that NZ has more permitted land than TAG. Who knows how good it is but, it just seems to me like there is potential here.

Dana1