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TAG announces the sale of assets and operations in New Zealand



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VANCOUVER, November 6, 2018 / PRNewswire / – TAG Oil Ltd. ("TAG", TSX: TAO and OTCQX: TAOIF) announced today that with some of its subsidiaries New Zealand, has entered into a definitive share purchase agreement with Tamarind Resources Pte based in Australia. Ltd. ("Tamarind") and some of its subsidiaries ("SPA").

This purely commercial transaction concerns the sale of substantially all the assets and activities of TAG Taranaki Basin New Zealand (the transaction). The sale will include 100% TAG's interests in: PMP 38156 (Cheal and Cardiff), PMP 53803 (Sidewinder), PMP 60454 (Supplejack), PEP 51153 (Puka), PEP 57065 (Waitoriki), and TAG interest for PMP 60291Cheal East) and PEP 54877 (Cheal East) (collectively, the "NZ asset"). The formal closure of the Transaction is expected in the calendar quarter of 2019, depending on the timing of regulatory approvals.

Main Trading Points

  • Cash payment at 30 million USD at closure.
  • TAG to receive a 2.5% gross principal right over future production of all NZ assets.
  • Until 5 million USD to specific payments due to the achievement of several milestones (the first milestone, the provision of PMP 60454 (Supplejack) conversion has already been achieved by triggering a payment 500,000 USD at closure).
  • The Transaction will be funded from Tamarind's available financial resources.

Commenting on the Transaction, Tokey Piers, Said TAG CEO, "We are pleased to announce this transaction for TAG New Zealand which represent an attractive premium at the current market value of the assets of the TAG shareholders. In addition, payments on specific rights and events provide ongoing exposure to Tamarind's future asset growth and aggression program."

Upon completion of the Transaction, TAG expects it to be over C $ 0.50 per share in cash and working capital, continued exposure to current operations and upward course of NZ assets. In addition, TAG will be in a better position to continue its exploration prospects covering over 275,000 acres Australia, including an oil production license of 25,000 acres in the Surat basin.

Additional information about the Transaction

The Transaction will require the approval of two-thirds of the votes cast in person or by a representative from the TAG ordinary share holders at the TAG's special meeting of shareholders December 2018 (the "Circular"), information about the Transaction will be contained in the Circular ("Circular"), which TAG will prepare, deposit and send to shareholders in relation to the Meeting. circular, as they contain additional important information.

The completion of the Transaction is also subject to a number of additional terms that characterize such a transaction, including: (i) obtaining approval from the Toronto Stock Exchange, New Zealand regulatory approval and all other required regulatory approvals and approvals or approvals of third parties; (ii) the approval of the TAG shareholders; (iii) the continued accuracy of the parties' documents and warranties at the due date; and (iv) of the commitments and obligations of the Parties under the SPA has been or has been executed in all material respects from the expiry of the time limit.

The SPA provides, inter alia, a non-recourse contract by TAG, subject to a "fiduciary exit" clause enabling TAG to examine and accept a superior proposal of the Transaction. The SPA also provides for non-payment of the fee 1 million USD if the Transaction is terminated by the TAG under certain circumstances, including the case where the TAG concludes an agreement on a superior proposal.

The full text of the SPA can be found on the TAG profile at www.sedar.com. Additional information will be provided in the Circular provided to shareholders in relation to the Meeting.

Council recommendation

The Board of Directors of TAG, following a thorough review and analysis of the Transaction and consideration of other available options, and after consultation with financial and legal advisers and the recommendation of the Special Committee composed of the TAG Board's independent directors: (i) found that the Transaction is in the interest of the TAG. (ii) determined that the consideration offered to TAG is fair in economic terms; and (iii) recommended that the shareholders of TAG vote for their Shares in favor of the Transaction.

Counselors and Knowledge of Justice

PillarFour Securities acts as TAG's financial adviser in relation to the Transaction and has provided the Governing Board with a fair opinion that, taking into account the various factors, assumptions, qualifications and constraints on which the opinion is based, TAG in accordance with Transaction is fair in financial terms to the TAG. FirstEnergy Capital LLP ("GMP FirstEnergy") has provided the Special Committee and the other members of the Board of Directors with a fair view that, taking into account the various factors, assumptions, qualifications and constraints on which the opinion is based, TAG with the Transaction being fair in financial terms to the TAG.

Blake, Cassels and Graydon LLP act as Canadian legal advice to TAG and Greenwood Roche acts as New Zealand TAG Legal Advisor.

About TAG Oil Ltd.

TAG Oil (http://www.tagoil.com/) is an international oil and gas explorer with established assets of high production, development and exploration, including production infrastructure New Zealand and Australia. TAG Oil now has 85,282,252 shares in circulation.

The completion of the Transaction is subject to several conditions, including the acceptance of the TSX, the approval of the Shareholders and the New Zealand regulatory approval. The Transaction can not be closed until, inter alia, the required shareholder, TSX and New Zealand regulatory approval is obtained. There can be no assurance that the Transaction will be completed as proposed or not at all.

Investors caution that, in addition to what is described in the Circular to be prepared in connection with the Transaction, any information released or received in respect of the Transaction may not be accurate or complete and should not be based on them. The negotiation of TAG titles should be considered to be particularly speculative.

TSX has in no way transferred the benefits of the proposed Transaction and has neither approved nor rejected the contents of this version.

Warning notice on prospective statements and disclaimer

The statements contained in this announcement, which are not historical events, are forward-looking statements regarding various risks and uncertainties that affect TAG's business. Such statements can generally, but not always, be identified with words such as "expect", "plans", "forecasts," "intentions," "estimates," "predictions," and similar expressions, or that events or conditions "," Will "," can "," could "or" should "happen.

Forecasts and information on expected economic performance are based on management's assumptions using the available information. The prospects mentioned in this release include the TAG's expectations regarding the ability to complete and the expected outcome of the Transaction, the funds to be made available to the TAG after completion of the Transaction, the achievement of any payments for specific events, the scheduled closing date of the Transaction, the benefits of TAG's gross royalties and the expected timetable for the Meeting.

When viewing the privileged statements of this publication, TAG has applied a number of factors and assumptions based on information currently available to the TAG, as well as TAG's current beliefs and assumptions by TAG, including that TAG will be able to complete the Transaction with the timelines expected or not at all that the Transaction will benefit the TAG, the TAG New Zealand businesses will continue to operate by Tamarind in a way that is beneficial to TAG and will result in the specific payments and payments for specific events under the gross maximum entitlement. Although TAG believes that these beliefs and assumptions are reasonable on the basis of the information available at this time, they may prove to be false and future statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results differ substantially from those expressed or implied in such forward-looking statements. These risks include that the Transaction does not close in the expected timing, or at all, that the TAG New Zealand businesses will not operate in a beneficial way for TAG, or will result in the making of such event-based payments, in line with the gross maximum entitlement. Although TAG has tried to identify important factors that could cause substantial differences between the actual results and the results contained in future information, there may be other factors that will cause the results not to be as predicted, estimated or predicted. There can be no assurance that this information will be accurate as actual results and future events may differ significantly from what is expected in such statements. Consequently, readers should not rely excessively on information about the future. TAG undertakes no obligation, unless otherwise provided by law, to update these future statements if management's beliefs, estimates or opinions or other factors change.

SOURCE TAG Oil Ltd.

related links

www.tagoil.com

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