---

THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE U.S. SECURITIES ACT) OR
THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON (AS DEFINED IN
REGULATION S UNDER THE U.S. SECURITIES ACT) UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.

TAG OIL LTD.SUBSCRIPTION AGREEMENT FOR COMMON
SHARES(U.S. Subscription Agreement)

|TO:     | TAG OIL LTD.                                                      
|------- | ------------------------------------------------------------------
|        |                                                                   
|AND TO: | CANACCORD CAPITAL CORPORATION (the
      Underwriter)           
|        |                                                                   
|AND TO: | CANACCORD CAPITAL CORPORATION (USA), INC.
      (the U.S. Agent)

The undersigned (the Subscriber) hereby irrevocably
subscribes for and agrees to purchase through the U.S. Agent from TAG Oil Ltd.
(the Corporation) that number of Common Shares of the Corporation (the
Common Shares) set out on page 2 at a price of $0.75 per Common Share
(the Subscription Price) for the aggregate subscription price (the
Aggregate Subscription Price) set out on page 2. The Subscriber agrees
to be bound by the terms and conditions set forth in the attached Terms and
Conditions of Subscription for Common Shares including without limitation the
representations, warranties and covenants set forth in the applicable schedules
attached thereto. The Subscriber further agrees, without limitation, that the
Corporation, the Underwriter, the U.S. Agent and their respective counsel may
rely upon the Subscribers representations, warranties and covenants contained
in such documents.

Please make sure that your subscription
includes:

| | 1. | one (1)signed copy of this Subscription Agreement
      with the information on pages 2, 3 and 4 completed;                                                                                                                         
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                     
| | 2. | a certified cheque or bank draft in an amount equal to
      the Aggregate Subscription Price, payable in Canadian funds to
      Canaccord Capital Corporation unless other acceptable payment
      arrangements have been made;
| |    |                                                                                                                                                                                                                                     
| | 3. | a properly completed and duly executed copy of the U.S.
      Accredited Investor Certificate in the form attached to this Subscription
      Agreement as Schedule B, and                                                        
| |    |                                                                                                                                                                                                                                     
| | 4. | if applicable, a properly completed and duly executed
      TSX-V Form 4C Corporate Placee Registration Form in the form attached to
      this Subscription Agreement as Schedule D.                                             

Please deliver your subscription to:

Canaccord Capital Corporation (USA), Inc.Suite 3000, 161 Bay
StreetToronto, ON M5J 2S1

Attention: Jennifer LeungFax: (416) 869-7706

---

2

SUBSCRIPTION AND SUBSCRIBER INFORMATIONPlease
print all information (other than signatures), as applicable, in the space
provided below



---

3

OTHER INFORMATION TO BE COMPLETED BY EACH SUBSCRIBER

|A. | Corporate Placee or Investment Portfolio Manager
      Registration Form(Schedule D)                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | The Subscriber, if not an individual (i.e., a natural
      person), either [CHECK WHERE **APPROPRIATE]**:                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                     
|   | has previously filed with the TSX Venture Exchange (the
      TSX-V) a Form 4C, Corporate Placee Registration Form, and represents and
      warrants that there has been no change to any of the information in the
      Corporate Placee Registration Form previously filed with the TSX-V up to
      the date of this Agreement; or          
|   |                                                                                                                                                                                                                                                                                                                                                     
|   | hereby delivers to the Corporation a completed
      Form 4C, Corporate Placee Registration Form, in the form attached hereto
      for filing with the TSX-V; and                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                     
|B. | Present Ownership of Securities of the Corporation                                                                                                                                                                                                                                                                                                  
|   | The Subscriber either [CHECK APPROPRIATE ITEM]:                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                     
|   | does not own, directly or indirectly, or exercise control
      or direction over, any common shares in the capital of the Corporation or
      securities convertible into common shares in the capital of the
      Corporation (excluding the Common Shares subscribed for herein); or                                                           
|   |                                                                                                                                                                                                                                                                                                                                                     
|   | owns directly or indirectly, or exercises control
      or direction over, common shares in the capital of the Corporation and options,
      warrants and convertible securities entitling the Subscriber to acquire
      an additional common shares in the capital of the Corporation (excluding
      the Common Shares subscribed for herein).
|   |                                                                                                                                                                                                                                                                                                                                                     
|C. | Insider Status                                                                                                                                                                                                                                                                                                                                      
|   | The Subscriber either [CHECK IF APPROPRIATE]:                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                     
|   | is NOTan Insider of the Corporation
      as defined in the Securities Act(British Columbia);                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                     
|   | is an Insider of the Corporation as
      defined in the Securities Act(British Columbia), namely:                                                                                                                                                                                                                                                

(a) a director or senior officer of the
Corporation; (b) a director or senior officer of a person that is itself an
insider or subsidiary of the Corporation; (c) a person that has

(i) direct or indirect beneficial ownership
  of; 
  (ii) control or direction over; or 
  (iii) a combination of direct or indirect beneficial ownership of and of control
  or direction over
  securities of the Corporation carrying more than 10% of the voting rights attached
  to all the Corporations outstanding voting securities, excluding, for
  the purpose of the calculation of the percentage held, any securities held by
  the person as underwriter in the course of a distribution, or

(d) the Corporation itself, if it has
purchased, redeemed or otherwise acquired any securities of its own issue, for
so long as it continues to hold those securities.

---

4

D. Member of Pro GroupThe Subscriber either [CHECK IF APPROPRIATE]:

| | is NOTa Member of the Pro Group as defined in the
      Rules of the TSX-V; or  
| | ----------------------------------------------------------------------------------
| |                                                                                   
| | is a Member of the Pro Group as defined in the Rules of the
      TSX-V, namely:

1. Subject to subparagraphs (2), (3)
and (4), Pro Group includes, either individually or as a group:

| | (a) | the member (i.e. a member of the TSX-V under its
      requirements);        
| | --- | -----------------------------------------------------------------------------
| | (b) | employees of the member;                                                     
| | (c) | partners, officers and directors of the member;                              
| | (d) | affiliates of the member; and                                                
| | (e) | associates of any parties referred to in subparagraphs
      (a) through (d).

2. The TSX-V may, in its discretion,
include a person or party in the Pro Group for the purposes of a particular
calculation where the TSX-V determines that the person is not acting at arms
length of the member;

3. The TSX-V may, in its discretion,
exclude a person from the Pro Group for the purposes of a particular calculation
where the TSX-V determines that the person is acting at arms length to the
member; and

4. The member may deem a person who would
  otherwise be included in the Pro Group pursuant to subparagraph (1) to be excluded
  from the Pro Group where the member determines that: (a) the person is an affiliate
  or associate of the member acting at arms length to the member; (b) the
  associate or affiliate has a separate corporate and reporting structure; (c)
  there are sufficient controls on information flowing between the member and
  the associate or affiliate; and (d) the member maintains a list of such excluded
  persons.

(a) the person is an affiliate or associate
  of the member acting at arm’s length to the member; 
  (b) the associate or affiliate has a separate corporate and reporting structure;
  
  (c) there are sufficient controls on information flowing between the member
  and the associate or affiliate; and 
  (d) the member maintains a list of such excluded persons

---

5

TERMS AND CONDITIONS OF SUBSCRIPTION FORCOMMON SHARES

PART 1 - INTERPRETATION

|1.1 | Definitions
|--- | -----------

Whenever used in this
Subscription Agreement, unless there is something in the subject matter or
context inconsistent therewith, the following words and phrases shall have the
respective meanings ascribed to them as follows:

Accredited Investor means an accredited investor as
defined in Rule 501(a) of Regulation D under the U.S. Securities Act.

Aggregate Subscription Price has the meaning ascribed
to such term on the front page of this Agreement.

Business Day means a day other than a Saturday, Sunday
or any other day on which the principal chartered banks located in Toronto or
Vancouver are not open for business.

Closing shall have the meaning ascribed to such term
in Section 4.1.

Closing Date shall have the meaning ascribed to such
term in Section 4.1.

Closing Time shall have the meaning ascribed to such
term in Section 4.1.

Common Share means a common share in the capital of
the Corporation as constituted as at the Closing Date.

Control Person means a person, company or combination
of persons or companies described in clause (c) of the definition of
distribution in subsection 1(1) of the Securities Act (British
Columbia).

Corporation means TAG Oil Ltd. and includes any
successor corporation to or of the Corporation.

Directed Selling Efforts means directed selling
efforts as that term in defined in Regulation S adopted pursuant to the U.S.
Securities Act. Without limiting the foregoing, but for greater clarity, it
includes, subject to the exclusions from the definition of directed selling
efforts contained in Regulation S, any activity undertaken for the purpose of,
or that could reasonably be expected to have the effect of, conditioning the
market in the United States for the Common Shares, and includes the placement of
any advertisement in a publication with a general circulation in the United
States that refers to the offering of the Common Shares.

Foreign Private Issuer shall have the meaning ascribed
to the term foreign private issuer as defined in Rule 405 of Regulation C
under the U.S. Securities Act.

Institutional Accredited Investor means an Accredited
Investor that meets the criteria set forth in Rule 501(a)(1), (2), (3) and (7)
of Regulation D under the U.S. Securities Act.

Offering means the offering of Common Shares pursuant
to this Subscription Agreement and the Underwriting Agreement.

---

6

person means any individual (whether acting as an
executor, trustee, administrator, legal representative or otherwise),
corporation, firm, partnership, sole proprietorship, syndicate, joint venture,
trustee, trust, unincorporated organization or association, and pronouns have a
similar extended meaning.

Securities Laws means, as applicable, the securities
laws, regulations, rules, rulings and orders in the United States and each of
the states of the United States, and each of the provinces and territories of
Canada, the applicable policy statements issued by the securities regulators in
the United States and each of the states of the United States and each of the
provinces of Canada, and the rules of the TSX-V.

Subscriber means the subscriber for Common Shares as
set out on page 2 of this Subscription Agreement.

Subscription Agreement means this subscription
agreement (including any schedules hereto) and any instrument amending this
Subscription Agreement; hereof, hereto, hereunder,
herein and similar expressions mean and refer to this Subscription
Agreement and not to a particular Part or Section; and the expression Part or
Section followed by a number means and refers to the specified Part or Section
of this Subscription Agreement.

Subscription Price shall have the meaning ascribed to
such term on the front page of this Subscription Agreement.

Term Sheet means the term sheet delivered to potential
purchasers of Common Shares, a copy of which is attached hereto as Schedule A.

TSX-V means the TSX Venture Exchange.

Underwriting Agreement means the Underwriting
Agreement effective as of May 12, 2006 entered into between the Underwriter and
the Corporation in respect of the Offering.

Underwritermeans Canaccord Capital Corporation.

United States means the United States of America, its
territories and possessions, any State of the United States and the District of
Columbia.

U.S. Agent means Canaccord Capital Corporation (USA),
Inc.

U.S. Person means U.S. person as that term is
defined in Rule 902(k) of Regulation S under the U.S. Securities Act.

U.S. Securities Act means the United States Securities
Act of 1933, as amended.

|1.2 | Gender and Number
|--- | -----------------

Words importing the singular
number only shall include the plural and vice versa, words importing the
masculine gender shall include the feminine gender.

|1.3 | Currency
|--- | --------

Unless otherwise specified, all
dollar amounts in this Subscription Agreement, including the symbol $,
are expressed in Canadian dollars.

---

7

|1.4 | Subdivisions, Headings and Table of
      Contents
|--- | --------------------------------------------------

The division of this Subscription
Agreement into Parts, Sections, Schedules and other subdivisions, the inclusion
of headings and the provision of a table of contents are for convenience of
reference only and shall not affect the construction or interpretation of this
Subscription Agreement. The headings in this Subscription Agreement are not
intended to be full or precise descriptions of the text to which they refer.
Unless something in the subject matter or context is inconsistent therewith,
references herein to an Part, Section, Subsection, paragraph, clause or Schedule
are to the applicable part, section, subsection, paragraph, clause or schedule
of this Subscription Agreement.

PART 2 - SCHEDULES

|2.1 | Description of Schedules
|--- | ------------------------

The following are the Schedules
attached to and incorporated in this Subscription Agreement by reference and
deemed to be a part hereof:

Schedule A Term SheetSchedule
B U.S. Accredited Investor CertificateSchedule C Form of Declaration for
Removal of LegendSchedule D Form 4C Corporate Placee Registration
FormSchedule E Acknowledgment  Personal Information

PART 3 - SUBSCRIPTION AND DESCRIPTION OFCOMMON SHARES

|3.1 | Subscription for the Common Shares
|--- | ----------------------------------

The Subscriber hereby confirms
its irrevocable subscription for the number of Common Shares set out on page 2
hereof from the Corporation, on and subject to the terms and conditions set out
in this Subscription Agreement, for the Aggregate Subscription Price which is
payable as described in Part 4.

|3.2 | Acceptance and Rejection of Subscription by
      the Corporation
|--- | -----------------------------------------------------------------

The Subscriber acknowledges and
agrees that the Corporation reserves the right, in its sole absolute discretion,
to reject this subscription for Common Shares, in whole or in part, at any time
prior to the Closing Time. If this subscription is rejected in whole, any
cheques or other forms of payment delivered to the U.S. Agent representing the
Aggregate Subscription Price will be promptly returned to the Subscriber without
interest or deduction. If this subscription is accepted only in part, a cheque
representing any refund of the Aggregate Subscription Price for that portion of
the subscription for the Common Shares which is not accepted, will be promptly
delivered to the Subscriber without interest or deduction.

---

8

PART 4 - CLOSING

|4.1 | Closing
|--- | -------

Delivery and sale of the Common
Shares and payment of the Aggregate Subscription Price will be completed (the
Closing) at the offices of the Underwriters counsel, Bennett Jones LLP, 4500
Bankers Hall East, 855 2nd Street SW, Calgary, Alberta T2P 4K7 at
8:00 a.m. (Calgary time) (the Closing Time) on June 1, 2006 or such
other place or date or time as the Corporation and the Underwriter may agree
(the Closing Date). If, prior to the Closing Time, the terms and
conditions contained in this Subscription Agreement and the Underwriting
Agreement have been complied with to the satisfaction of the Underwriter, or
waived by it, the Underwriter and the U.S. Agent shall deliver to the
Corporation all completed Subscription Agreements and payment of the Aggregate
Subscription Price for all of the Common Shares sold pursuant to the
Underwriting Agreement against delivery by the Corporation of certificates
representing the Common Shares and such other documentation as may be required
pursuant to this Subscription Agreement and the Underwriting Agreement.

|4.2 | Authorization of the Underwriter and the
      U.S. Agent
|--- | ---------------------------------------------------------

The Subscriber irrevocably
authorizes the Underwriter and the U.S. Agent in their sole and absolute
discretion, to act as the Subscribers representative at the Closing, and hereby
appoints the Underwriter, with full power of substitution, as its true and
lawful attorney with full power and authority in the Subscribers place and
stead:

(a) to receive certificates
representing the Common Shares, to execute in the Subscribers name and on its
behalf all closing receipts and required documents, to complete and correct any
errors or omissions in any form or document provided by the Subscriber in
connection with the subscription for the Common Shares and to exercise any
rights of termination contained in the Underwriting Agreement;

(b) to extend such time periods and to
waive, in whole or in part, any representations, warranties, covenants or
conditions for the Subscribers benefit contained in this Subscription
Agreement, the Underwriting Agreement or any ancillary or related document;

(c) to terminate this Subscription
Agreement if any condition precedent is not satisfied, in such manner and on
such terms and conditions as the Underwriter in its sole discretion may
determine; and

(d) without limiting the generality of
the foregoing, to negotiate, settle, execute, deliver and amend the Underwriting
Agreement.

PART 5 - REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

|5.1 | Representations and Warranties of the
      Corporation
|--- | -------------------------------------------------------

(a) By execution of this Subscription
Agreement, the Corporation hereby agrees with the Subscriber that the Subscriber
shall have the benefit of the representations and warranties made by the
Corporation to the Underwriter and the U.S. Agent as set forth in the
Underwriting Agreement. Such representations and warranties shall form an
integral part of this Subscription Agreement and shall survive the closing of
the purchase and sale of the Common Shares and shall

---

9

continue in full force and effect for
the benefit of the Subscriber in accordance with the Underwriting Agreement and
the Subscription Agreement.

(b) The Corporation is a Foreign
Private Issuer.

(c) No form of general solicitation or
general advertising (including advertisements, articles, notices or other
communications published in any newspaper, magazine or similar media or
broadcast over radio or television or any seminar or meeting whose attendees had
been invited by general solicitation or general advertising) was used by the
Corporation or, to the best of its knowledge, any other person acting on behalf
of the Corporation, in respect of or in connection with the offer and sale of
the Common Shares in the United States or elsewhere or to citizens or residents
of the United States or elsewhere. Neither the Corporation nor any person
authorized to act on its behalf has sold or offered for sale any Common Shares,
or solicited any offers to buy any Common Shares thereby so as to cause the
issuance or sale of any of the Common Shares to be in violation of Section 5 of
the U.S. Securities Act, Canadian or other securities laws. The transactions
contemplated hereby, and conducted by the Underwriter and the U.S. Agent in
accordance with the terms and conditions of the Underwriting Agreement, are
exempt from the registration requirements of the U.S. Securities Act and all
other applicable securities laws, including Canadian securities laws, such
exemptions being based in part on the representations, warranties, statements,
and agreements contained herein and those of other subscribers contained in
similar agreements. None of the Corporation, its subsidiaries or any persons
acting on its or their behalf has engaged or will engage in any Directed Selling
Efforts.

(d) The Corporation is not an open-end
investment company, closed-end investment company, unit investment or
face-amount certificate company that is or is required to be registered under
Section 8 of the United States Investment Company Act of 1940, as
amended.

PART 6 - ACKNOWLEDGEMENTS, COVENANTS, REPRESENTATIONS
ANDWARRANTIES OF THE SUBSCRIBER

|6.1 | Acknowledgements, Representations,
      Warranties and Covenants of the Subscriber
|--- | -----------------------------------------------------------------------------------

The Subscriber, on its own behalf
and, if applicable, on behalf of others for whom it is acting hereunder, hereby
represents and warrants, and covenants with, the Corporation, the U.S. Agent and
the Underwriter (and acknowledges that the Corporation, the U.S. Agent and the
Underwriter and their respective counsel are relying thereon) as follows:

(a) The Subscriber is an Accredited
Investor (other than an Institutional Accredited Investor) acquiring the Common
Shares for its own account or an Institutional Accredited Investor acquiring the
Common Shares for its own account or for the account of another Accredited
Investor over which the Subscriber exercises sole investment discretion and as
to which the Subscriber has the authority to make the statements set forth in
this Subscription Agreement, in each case not with a view to, or for offer or
sale in connection with, any resale, distribution or other disposition of the
Common Shares in any transaction that would be in violation of the U.S.
Securities Act or applicable state securities laws.

(b) The Common Shares have not been and
will not be registered under the U.S. Securities Act or any applicable state
securities laws, and the offer and sale of the Common Shares to the Subscriber
is being made in reliance on the exemption from registration provided by
sections 4(2)

---

10

and 4(6) of the U.S. Securities Act and
by Rule 506 of Regulation D promulgated under the U.S. Securities Act, and
exemptions from registration under applicable state securities laws.

(c) The Subscriber has properly
completed, executed and delivered to the Corporation a U.S. Accredited Investor
Certificate in the form set forth in Schedule B and the information contained
therein is true and correct.

(d) The Subscriber is aware that the
Common Shares have not been and will not be registered under the U.S. Securities
Act, or the securities legislation of any state and that the Common Shares may
not be offered or sold, directly or indirectly, in the United States without
registration under the U.S. Securities Act or compliance with the requirements
of an exemption from registration and it acknowledges that the Corporation has
no obligation to file, and no present intention of filing, a registration
statement under the U.S. Securities Act in respect of the Common Shares.

(e) The execution and delivery of this
Subscription Agreement, the performance and compliance with the terms hereof,
the subscription for the Common Shares and the completion of the transactions
described herein by the Subscriber will not result in any breach of, or be in
conflict with or constitute a default under, or create a state of facts which,
after notice or lapse of time, or both, would constitute a default under any
term or provision of the constating documents, by-laws or resolutions of the
Subscriber, the Securities Laws or any other laws applicable to the Subscriber,
any agreement to which the Subscriber is a party or by which it is bound, or any
judgment, decree, order, statute, rule or regulation applicable to the
Subscriber.

(f) If the Subscriber is not
subscribing for the Common Shares as principal, it acknowledges that the
Corporation may be required by law to disclose to certain regulatory authorities
the identity of each beneficial purchaser for the Common Shares for whom it is
acting.

(g) In the case of a subscription for
the Common Shares by the Subscriber acting as trustee or agent (including, for
greater certainty, a portfolio manager or comparable adviser) for a principal,
the Subscriber is duly authorized to execute and deliver this Subscription
Agreement and all other necessary documentation in connection with such
subscription on behalf of each such beneficial person, each of whom is
subscribing as principal for its own account, not for the benefit of any other
person, for investment only and not with a view to the resale or distribution of
the Common Shares, and this Subscription Agreement has been duly authorized,
executed and delivered by or on behalf of and constitutes a legal, valid and
binding obligation of, such principal.

(h) In the case of a subscription for
the Common Shares by the Subscriber acting as principal, this Subscription
Agreement has been duly authorized, executed and delivered by, and constitutes a
legal, valid and binding obligation of, the Subscriber. This Subscription
Agreement is enforceable in accordance with its terms against the Subscriber and
any beneficial purchasers on whose behalf the Subscriber is acting.

(i) If the Subscriber, or (if
applicable) any beneficial purchaser for whom the Subscriber is contracting
hereunder, is:

(i) a corporation, the Subscriber has
been duly incorporated and is validly subsisting under the laws of its
jurisdiction of incorporation and has all requisite legal and corporate power
and authority to execute and deliver this Subscription Agreement, to subscribe
for the Common Shares as contemplated herein and to carry out and perform its
obligations

---

11

under the terms of this Subscription
Agreement and has obtained all necessary approvals in respect thereof; or

(ii) a partnership, syndicate or other
form of unincorporated organization, the Subscriber has the necessary power and
authority to execute and deliver this Subscription Agreement and to observe and
perform its covenants and obligations hereunder and has obtained all necessary
approvals in respect thereof.

(j) Other than the Underwriter and the
U.S. Agent, there is no person acting or purporting to act in connection with
the transactions contemplated herein who is entitled to any brokerage or
finders fee. If any person establishes a claim that any fee or other
compensation is payable in connection with this subscription for the Common
Shares, the Subscriber covenants to indemnify and hold harmless the Corporation,
the Underwriter and the U.S. Agent with respect thereto and with respect to all
costs reasonably incurred in the defense thereof.

(k) The Subscriber is not, with respect
to the Corporation or any of its affiliates, a Control Person.

(l) If required by applicable
securities legislation, policy, order or the Corporation, the Subscriber will
execute, deliver and file or assist the Corporation in filing such reports,
undertakings and other documents with respect to the issue of the Common Shares
as may be required by any securities commission, stock exchange or other
regulatory authority.

(m) The Subscriber, and each beneficial
person for whom it is contracting hereunder, have been advised to consult their
own legal advisors with respect to trading in the Common Shares and with respect
to the resale restrictions imposed by the Securities Laws of the state in which
the Subscriber was offered, and agreed to purchase, the Common Shares, the U.S.
Securities Act and the rules and regulations thereunder, and the Subscriber is
solely responsible (and neither the Corporation nor the Underwriter are in any
way responsible) for compliance with applicable resale restrictions and the
Subscriber is aware that it (or beneficial persons for whom it is contracting
hereunder) may not be able to resell such securities except in accordance with
limited exemptions under the Securities Laws and other applicable securities
laws.

(n) The Subscriber has not received or
been provided with a prospectus or offering memorandum within the meaning of the
Securities Laws, or any sales or advertising literature in connection with the
Offering and the Subscribers decision to subscribe for the Common Shares was
not based upon, and the Subscriber has not relied upon, any verbal or written
representations as to fact made by or on behalf of the Corporation or the
Underwriter. The Subscribers decision to subscribe for the Common Shares was
based solely upon this Subscription Agreement, the Term Sheet attached hereto as
Schedule A and information about the Corporation which is publicly available
(any such information having been obtained by the Subscriber without independent
investigation or verification by the Underwriter).

(o) The Subscriber is not purchasing
the Common Shares with knowledge of material information concerning the
Corporation, which has not been generally disclosed.

(p) No person has made any written or
oral representations:

(i) that any person will resell or
repurchase the Common Shares;

(ii) that any person will refund the
Aggregate Subscription Price; or

---

12

(iii) as to the future price or value
of the Common Shares.

(q) The Subscriber was not solicited
through, and did not subscribe for or purchase the Common Shares as a result of,
any general solicitation or general advertising (as those terms are used in
Regulation D in the U.S. Securities Act), including advertisements, articles,
notices or other communications published in any newspaper, magazine, or any
press release.

(r) The Subscriber consents to the
Corporation making a notation on its records or giving instructions to the
registrar and transfer agent of the Corporation in order to implement the
restrictions on transfer set forth and described herein.

(s) The address at which the Subscriber
received and accepted the offer to purchase the Common Shares is the address
listed on the signature page of the Subscription Agreement.

(t) There are risks associated with the
purchase of and investment in the Common Shares and the Subscriber, and any
beneficial person for whom it is contracting hereunder, is knowledgeable,
sophisticated and experienced in business and financial matters and is capable
of evaluating the merits and risks of an investment in the Common Shares fully
understands the restrictions on resale of the Common Shares and is able to bear
the economic risk of the loss of its entire investment in the Common Shares.

(u) The Subscriber has not been formed
solely for the purpose of entering into the transactions described herein.

(v) The Subscriber has not and does not
presently intend to enter into any contract, undertaking, agreement or
arrangement with any person or entity to sell, transfer or pledge the Common
Shares.

(w) Neither the Subscriber nor any
party on whose behalf it is acting is an investment club.

(x) Except as disclosed in writing to
the Corporation, the Subscriber does not act jointly or in concert with any
other person for the purposes of acquiring securities of the Corporation.

|6.2 | Acknowledgments of the Subscriber
|--- | ---------------------------------

The Subscriber, on its own behalf
and, if applicable, on behalf of any beneficial purchaser for whom it is acting
hereunder, acknowledges and agrees as follows:

(a) The Subscriber has received a copy
of the Term Sheet setting out the principal terms of the Offering.

(b) No securities commission, agency,
governmental authority, regulatory body, stock exchange or similar regulatory
authority has reviewed or passed on the merits of the Common Shares.

(c) There is no government or other
insurance covering the Common Shares.

(d) There are risks associated with the
purchase of the Common Shares.

---

13

(e) There are restrictions on the
Subscribers ability to resell the Common Shares and it is the responsibility of
the Subscriber to determine what those restrictions are and to comply with them
before selling the Common Shares.

(f) The Corporation has advised the
Subscriber that the Corporation is relying on an exemption from the requirements
to provide the Subscriber with a prospectus and, as a consequence of acquiring
Common Shares pursuant to this exemption, certain protections, rights and
remedies provided by the Securities Laws, including statutory rights of
rescission or damages, may not be available to the Subscriber. The Subscriber
may not receive information that would otherwise be required to be provided to
it under Securities Laws and the Corporation is relieved from certain
obligations that would otherwise apply under Securities Laws.

(g) The Common Shares shall be subject
to statutory resale restrictions under the Securities Laws of the Province of
British Columbia and the State in which the Subscriber purchased the Common
Shares, under the U.S. Securities Act and the rules and regulations thereunder,
and any other applicable securities laws, and the Subscriber covenants that it
will not resell the Common Shares except in compliance with such laws and the
Subscriber acknowledges it is solely responsible (and neither the Corporation
nor the Underwriter, nor the U.S. Agent is responsible) for such compliance. The
Corporation has no obligation or present intention of filing a registration
statement under the U.S. Securities Act in respect of the Common Shares.

(h) The certificates representing the
Common Shares will bear, as of the Closing Date, legends substantially in the
following form and with the necessary information inserted:

Unless permitted under securities
legislation, the holder of the securities shall not trade the securities before
[insert date that is four (4) months and one (1) day after the Closing Date].

Without prior written approval of
the TSX-V Venture Exchange and compliance with all applicable securities
legislation, the securities represented by this certificate may not be sold,
transferred, hypothecated or otherwise traded on or through the facilities of
the TSX-V Venture Exchange or otherwise in Canada or to or for the benefit of a
Canadian resident until [insert that date which is four months and a day from
the Closing Date.]

(i) The Subscriber understands and
acknowledges:

(i) that if it decides to offer, sell
or otherwise transfer any of the Common Shares, such securities may be offered,
sold or otherwise transferred only (A) to the Corporation, (B) outside the
United States in compliance with Rule 903 or Rule 904 of Regulation S under the
U.S. Securities Act and in compliance with applicable local laws and
regulations, (C) in compliance with the exemption from registration under the
U.S. Securities Act provided by Rule 144 or Rule 144A thereunder, if available,
and in compliance with any applicable state securities laws, or (D) in a
transaction that otherwise does not require registration under the U.S.
Securities Act or applicable state securities laws. The Subscriber acknowledges
that the Corporation or its registrar and transfer agent may, if reasonable
under the circumstances, require an opinion from counsel of recognized standing
reasonably satisfactory to the Corporation that registration under the U.S.
Securities Act is not required prior to transfer; and

---

14

(ii) that each certificate
representing the Common Shares originally issued to the Subscriber, as well as
all certificates issued in exchange for or in substitution of the foregoing
securities and until such time as the same is no longer required under
applicable requirements of the U.S. Securities Act or applicable state
securities laws, shall bear a legend to the following effect:

The securities represented hereby
have not been registered under the United States Securities Act of 1933, as
amended (the U.S. Securities Act) or under any state securities laws. The
holder hereof, by purchasing such securities, agrees for the benefit of the
Corporation that such securities may be offered, sold or otherwise transferred
only (a) to the Corporation, (b) outside the United States in compliance with
Rule 903 or 904 of Regulation S under the U.S. Securities Act, (c) in compliance
with the exemption from registration under the U.S. Securities Act provided by
Rule 144 or Rule 144A, if available, and in compliance with any applicable state
securities laws, or (d) in a transaction that otherwise does not require
registration under the U.S. Securities Act or applicable state securities laws.
The Corporation may require an opinion of counsel of recognized standing
reasonably satisfactory to it that registration under the U.S. Securities Act is
not required prior to transfer.

provided, that if at a time the
Corporation is a Foreign Private Issuer any such securities are being sold in
compliance with the requirements of Rule 904 of Regulation S under the U.S.
Securities Act and in compliance with Canadian local laws and regulations, the
legend may be removed by providing a declaration to the Corporation's registrar
and transfer agent to the effect set forth in Schedule C hereto or such other
evidence as the Corporation or its registrar and transfer agent may prescribe
from time to time, which may include an opinion of counsel; and provided,
further, that, if any such securities are being sold pursuant to Rule 144 of the
U.S. Securities Act or a transaction that does not require registration under
the U.S. Securities Act or applicable state securities laws, the legend may be
removed by delivery to the registrar and transfer agent of the Corporation of an
opinion of counsel, of recognized standing reasonably satisfactory to the
Corporation, to the effect that such legend is no longer required under
applicable requirements of the U.S. Securities Act or state securities laws.

(j) The Underwriter, the U.S. Agent
and/or their respective directors, officers, employees, agents and
representatives assume no responsibility or liability of any nature whatsoever
for the accuracy or adequacy of any publicly available information concerning
the Corporation, or as to whether all information concerning the Corporation
that is required to be disclosed or filed by the Corporation under the
Securities Laws has been so disclosed or filed.

(k) The Corporation, the Underwriter,
the U.S. Agent and their respective legal counsel are relying on the
representations, warranties and covenants contained herein and in the U.S.
Accredited Investor Certificate attached hereto as Schedule B to determine the
Subscribers eligibility to subscribe for Common Shares under applicable
Securities Laws and the Subscriber agrees to indemnify the Corporation, the
Underwriter, the U.S. Agent, their respective legal counsel and each of their
directors and officers against all losses, claims, costs, expenses, damages or
liabilities which any of them may suffer or incur as a result of or arising from
reliance thereon. The Subscriber undertakes to immediately notify the
Corporation, the Underwriter and the U.S. Agent of any change in any statement
or other information relating to the Subscriber set

---

15

forth in the U.S. Accredited Investor
Certificate attached hereto as Schedule B which takes place prior to the
Closing Time.

(l) The Subscriber understands and
agrees that there may be material tax consequences to the Subscriber of an
acquisition, holding, or disposition of the Common Shares. The Corporation, the
Underwriter and the U.S. Agent give no opinion and make no representation with
respect to the tax consequences to the Subscriber under the tax laws of Canada
or any Province of Canada or under United States federal, state, or local tax
law or any other tax law of the Subscribers acquisition, holding or disposition
of such securities. In particular, no determination has been made whether the
Corporation will be a passive foreign investment company (PFIC) within the
meaning of Section 1291 of the United States Internal Revenue Code. Nothing in
this Subscription Agreement (or any document referenced herein) is intended or
written by the Corporation or any of its advisors to be used, and it cannot be
used, by the Subscriber or other person for the purpose of avoiding penalties
that may be imposed under U.S. federal income tax law. Any discussion of the
impact of U.S. income tax laws contained in this Subscription Agreement (or any
document referenced herein) or otherwise provided to the Subscriber has been or
will be provided solely to support the promotion or marketing of an investment
in the Corporation and other matters addressed in this Subscription Agreement
(and any document referenced herein).

(m) The Subscriber understands and
agrees that the financial statements of the Corporation have been prepared in
accordance with Canadian generally accepted accounting principles, which differ
in some respects from United States generally accepted accounting principles,
and thus may not be comparable to financial statements of United States
companies. The Corporation is organized under the laws of the Yukon Territory
and the majority of its directors or officers are either citizens or residents
of Canada. The Corporation is domiciled outside of the United States, and
substantially all of the assets of the Corporation are located outside of the
United States. As a result, it may be difficult for the Subscriber to effect
service of process within the United States upon the Corporation. There is
uncertainty as to the enforceability:

(i) in an original action in Canadian
courts of liabilities predicated solely upon United States federal securities
laws; or

(ii) judgments of United States courts
obtained in actions predicated upon the civil liability provisions of United
States securities laws in Canadian courts.

(n) The Subscriber, and each beneficial
person for whom it is contracting hereunder, is responsible for obtaining such
legal and tax advice as it considers appropriate in connection with the
execution, delivery and performance of this Subscription Agreement and the
transactions contemplated under this Subscription Agreement.

(o) The Corporation has provided to the
Subscriber the opportunity to ask questions and receive answers concerning the
terms and conditions of the offering and it has had access to such information
concerning the Corporation as it has considered necessary or appropriate in
connection with its investment decision to acquire the Common Shares.

(p) The funds representing the
Aggregate Subscription Price which will be advanced by the Subscriber to the
Underwriter hereunder will not represent proceeds of crime for the purposes of
the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada) (the PCMLFTA) and the Subscriber acknowledges that the
Corporation may in the future be required by law to disclose the Subscribers
name and other information relating to this

---

16

Subscription Agreement and the
Subscribers subscription hereunder, on a confidential basis, pursuant to the
PCMLFTA. To the best of its knowledge (a) none of the subscription funds to be
provided by the Subscriber (i) have been or will be derived from or related to
any activity that is deemed criminal under the law of Canada, the United States
of America, or any other jurisdiction, or (ii) are being tendered on behalf of a
person or entity who has not been identified to the Subscriber, and (b) the
Subscriber shall promptly notify the Corporation if the Subscriber discovers
that any of such representations ceases to be true, and to provide the
Corporation with appropriate information in connection therewith.

PART 7 - SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS

|7.1 | Survival of Representations, Warranties and
      Covenants of the Corporation
|--- | ------------------------------------------------------------------------------

The representations, warranties
and covenants of the Corporation contained in this Subscription Agreement shall
survive the Closing and the purchase of the Common Shares by the Subscriber and,
notwithstanding such Closing or any investigation made by or on behalf of the
Subscriber with respect thereto, shall continue in full force and effect for the
benefit of the Subscriber, the Underwriter and the U.S. Agent (as provided
herein) as if they had been made by the Corporation at the Closing Time and
shall continue in full force and effect notwithstanding any subsequent
disposition by the Subscriber of any of the Common Shares.

|7.2 | Survival of Representations, Warranties and
      Covenants of the Subscriber
|--- | -----------------------------------------------------------------------------

The representations, warranties
and covenants of the Subscriber contained in this Subscription Agreement shall
survive the Closing and the purchase of the Common Shares by the Subscriber and,
notwithstanding such Closing or any investigation made by or on behalf of the
Corporation, the Underwriter or the U.S. Agent with respect thereto, shall
continue in full force and effect for the benefit of the Corporation, the
Underwriter and the U.S. Agent as if they had been made by the Subscriber at the
Closing Time, and shall continue in full force and effect notwithstanding any
subsequent disposition by the Subscriber of any of the Common Shares.

PART 8 - MISCELLANEOUS

|8.1 | Further Assurances
|--- | ------------------

The Subscriber, upon the request
of the Corporation, whether before or after the Closing Time, shall do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all such further acts, deeds, documents, assignments, transfers,
conveyances, powers of attorney and assurances as may reasonably be necessary or
desirable to complete the transactions contemplated herein.

|8.2 | Collection of Personal Information
|--- | ----------------------------------

The Subscriber acknowledges and
consents to the fact that the Corporation, the Underwriter and the U.S. Agent
are collecting the Subscribers (and any beneficial purchasers) personal
information (as that term is defined under applicable privacy legislation,
including, without limitation, the

Personal Information Protection and Electronic Documents
Act (Canada) and any other applicable similar replacement or supplemental
provincial or federal legislation or laws in effect from time to time) for the
purpose of completing the Subscribers subscription. The Subscriber acknowledges
and consents

---

17

to the Corporation, the Underwriter and the U.S. Agent
retaining the personal information for so long as permitted or required by
applicable law or business practices. The Subscriber further acknowledges and
consents to the fact that the Corporation, the Underwriter or the U.S. Agent may
be required by United States or Canadian Securities Laws, stock exchange rules
and/or Investment Dealers Association of Canada or National Association of
Securities Dealers rules to provide regulatory authorities any personal
information provided by the Subscriber respecting itself (and any beneficial
purchaser for which the Subscriber is contracting hereunder). The Subscriber
represents and warrants that it has the authority to provide the consents and
acknowledgements set out in this paragraph on behalf of all beneficial
purchasers for which the Subscriber is contracting hereunder. In addition to the
foregoing, the Subscriber agrees and acknowledges that the Corporation, the
Underwriter or the U.S. Agent, as the case may be, may use and disclose the
Subscribers personal information, or that of each beneficial purchaser for whom
the Subscriber are contracting hereunder, as follows:

(a) for internal use with respect to
managing the relationships between and contractual obligations of the
Corporation, the Underwriter, the U.S. Agent and the Subscriber or any
beneficial purchaser for whom the Subscriber is contracting hereunder;

(b) for use and disclosure to the
Corporations transfer agent and registrar;

(c) for use and disclosure for income
tax related purposes, including without limitation, where required by law,
disclosure to Canada Revenue Agency;

(d) disclosure to securities regulatory
authorities (including the TSX-V) and other regulatory bodies with jurisdiction
with respect to reports of trade and similar regulatory filings;

(e) disclosure to a governmental or
other authority (including the TSX-V) to which the disclosure is required by
court order or subpoena compelling such disclosure and where there is no
reasonable alternative to such disclosure;

(f) disclosure to professional advisers
of the Corporation, the Underwriter or the U.S. Agent in connection with the
performance of their professional services;

(g) disclosure to any person where such
disclosure is necessary for legitimate business reasons and is made with the
Subscribers prior written consent;

(h) disclosure to a court determining
the rights of the parties under this Subscription Agreement; or

(i) for use and disclosure as otherwise
required or permitted by law.

The Subscriber further acknowledges and agrees that the TSX-V
collects personal information in forms submitted by the Corporation. The
Subscriber further agrees that the TSX-V may use this information in the manner
provided for in Appendix 6A to the TSX-V Corporate Finance Manual, a copy of
which is attached as Schedule E to this Subscription Agreement.

|8.3 | Notices
|--- | -------

(a) Any notice, direction or other
instrument required or permitted to be given to any party hereto shall be in
writing and shall be sufficiently given if delivered personally, or transmitted
by facsimile tested prior to transmission to such party, as follows:

---

18

(i) in the case of the Corporation,
to:

TAG Oil Ltd.Suite 400, 534 
17th Avenue SWCalgary, Alberta T2S 0B1

Attention: Drew
Cadenhead                  
President and Chief Executive OfficerFax: (403) 770-1935

with a copy to :

Blake, Cassels & Graydon
LLP2600  595 Burrard StreetVancouver, British Columbia V7X 1L3

Attention: Peter
KalbfleischFax:(604) 631-3377

(ii) in the case of the Subscriber, at
the address specified on the face page hereof, with a copy to the Underwriter
at:

Canaccord Capital CorporationSuite
2200  450 1st Street SWCalgary, Alberta T2P 5P8

Attention: Richard CawkwellFax:
(403) 508-3866

with a copy to :

Bennett Jones LLP855
2nd Street SW, Suite 4500Calgary, Alberta T2P 4K7

Attention: John KousiniorisFax:(403) 265-7219

(b) Any such notice, direction or other
instrument, if delivered personally, shall be deemed to have been given and
received on the day on which it was delivered, provided that if such day is not
a Business Day then the notice, direction or other instrument shall be deemed to
have been given and received on the first Business Day next following such day
and if transmitted by fax, shall be deemed to have been given and received on
the day of its transmission, provided that if such day is not a Business Day or
if it is transmitted or received after the end of normal business hours then the
notice, direction or other instrument shall be deemed to have been given and
received on the first Business Day next following the day of such transmission.

(c) A party hereto may change its
address for service from time to time by notice given to the other party hereto
in accordance with the foregoing provisions.

---

19

|8.4 | Time of the Essence
|--- | -------------------

Time shall be of the essence of this Subscription Agreement and
every part hereof.

|8.5 | Costs and Expenses
|--- | ------------------

All costs and expenses
(including, without limitation, the fees and disbursements of legal counsel)
incurred in connection with this Subscription Agreement and the transactions
herein contemplated shall be paid and borne by the party incurring such costs
and expenses.

|8.6 | Applicable Law
|--- | --------------

This Subscription Agreement shall
be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the laws of the Province of British Columbia and the laws
of Canada applicable therein. Any and all disputes arising under this
Subscription Agreement, whether as to interpretation, performance or otherwise,
shall be subject to the non-exclusive jurisdiction of the courts of the Province
of British Columbia and each of the parties hereto hereby irrevocably attorns to
the jurisdiction of the courts of such Province.

|8.7 | Entire Agreement
|--- | ----------------

This Subscription Agreement,
including the Schedules hereto, constitutes the entire agreement between the
parties with respect to the transactions contemplated herein and cancels and
supersedes any prior understandings, agreements, negotiations and discussions
between the parties. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements or understandings, express or
implied, between the parties hereto other than those expressly set forth in this
Subscription Agreement or in any such agreement, certificate, affidavit,
statutory declaration or other document as aforesaid.

|8.8 | Amendment
|--- | ---------

This Subscription Agreement may
not be amended or modified in any respect except by written instrument executed
by each of the parties hereto.

|8.9 | Counterparts
|--- | ------------

This Subscription Agreement may
be executed in one or more counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one and the same
Subscription Agreement. Counterparts may be delivered either in original or
faxed form and the parties adopt any signature received by a receiving fax
machine as original signatures of the parties.

|8.10 | Assignment
|---- | ----------

This Subscription Agreement may
not be assigned by either party except with the prior written consent of the
other party hereto.

|8.11 | Severability
|---- | ------------

The invalidity or
unenforceability of any particular provision of this Subscription Agreement
shall not affect or limit the validity or enforceability of the remaining
provisions of this Subscription Agreement.

---

20

|8.12 | Enurement
|---- | ---------

This Subscription Agreement shall
enure to the benefit of and be binding upon the parties hereto and their
respective heirs, executors, successors (including any successor by reason of
the amalgamation or merger of any party), administrators and permitted assigns.

|8.13 | Language
|---- | --------

Each of the Corporation and the Subscriber hereby
acknowledges that it has consented and requested that all documents evidencing
or relating in any way to the Common Shares and this Subscription Agreement be
drawn up in the English language only. La Société et le souscripteur
reconnaissent par les présentes avoir consenti et demandé que tous les documents
faisant foi ou se rapportant de quelque manière aux bons spéciaux et la présente
convention de souscription soient rédigés en anglais seulement.

The Corporation hereby accepts the subscription for Common Shares as set
forth on the face page of this Subscription Agreement on the terms and
conditions contained in this Subscription Agreement (including all applicable
schedules) this ___________ day of June, 2006.

TAG OIL LTD.

Per:
___________________________________      
Authorized Signing Officer

---

SCHEDULE A

TAG OIL LTD.Terms of Issue

|Issue:                 | 40,000,000 Common Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Issue Price:           | $0.75 per Common Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Amount of Issue:       | $30,000,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Selling Jurisdictions: | The Common Shares will be eligible for sale in Alberta,
      British Columbia, and Ontario (the "Selling Provinces") and such other
      provinces as the Corporation and Canaccord agree. The Common Shares may be
      offered or sold in the United States only by the Corporation to Accredited
      Investors by way of private placement pursuant to Sections 4(2) and 4(6)
      of the U.S. Securities Act and Regulation D promulgated thereunder or by
      the Underwriter pursuant to Rule 144A under the U.S. Securities Act and in
      other eligible foreign jurisdictions pursuant to applicable registration
      exemptions.
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Private Placement:     | The Common Shares will be sold, on a bought deal basis,
      in the Selling Provinces pursuant to applicable prospectus exemptions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Use of Proceeds:       | Net proceeds of the bought deal will be used to complete
      the acquisition of Cheal Petroleum Ltd., PEP 38757 Ltd., PEP 38758 Ltd.,
      participate in the development of the Cheal oil field and continue the
      Corporations exploration, drilling and seismic surveys in New Zealand as
      well as for working capital.                                                                                                                                                                                                                                                                                                               
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Hold Period            | The Common Shares will be subject to a four month hold
      period under Canadian securities laws and Common Shares sold to purchasers
      that are in the United States or who are U.S. persons will be restricted
      securities as defined in Rule 144 under the U.S. Securities Act and,
      accordingly, may be transferred only if registered under the U.S.
      Securities Act and applicable state securities laws, in compliance with
      Rule 903 or Rule 904 under the U.S. Securities Act, or pursuant to an
      exemption from registration thereunder.                                                                   
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Underwriter:           | Canaccord Capital Corporation 100%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Commission:            | Canaccord Capital will be entitled to a commission of
      6.0% of the total gross proceeds payable upon Closing of the Offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Due Diligence:         | Canaccord Capital will have the right to conduct adequate
      due diligence, inquiries and investigations and obtain satisfactory
      results therefrom, including satisfactory due diligence with the
      Corporation's auditors. The Corporation will use its reasonable commercial
      efforts to have its auditors and independent engineers attend any and all
      oral diligence sessions.                                                                                                                                                                                                                                            
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Closing:               | On or about June 1, 2006, or such other date as mutually
      agreed upon by the Corporation and Canaccord.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

SCHEDULE B

U.S. ACCREDITED INVESTOR CERTIFICATE

This certificate is given in connection with the subscription
for Common Shares of TAG Oil Ltd. pursuant to the attached Subscription
Agreement. Unless the context otherwise requires, all capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the
attached Subscription Agreement.

The Subscriber hereby represents, warrants and covenants that
the Subscriber (and any beneficial purchaser for whose account Subscriber is
purchasing the Common Shares) is an accredited investor as defined in Rule
501(a) of Regulation D by virtue of satisfying one or more of the categories
indicated below (please place the letter S on the appropriate line(s))
applicable to that Subscriber and the letters BP on the appropriate lines
applicable to a beneficial purchaser (if any):

|________ | Category 1. | A bank, as defined in Section 3(a)(2) of the U.S. Securities
      Act, whether acting in its individual or fiduciary capacity; or                                                                                                                                                                                                                                                                                                                                                                                                                      
|-------- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ | Category 2. | A savings and loan association or other institution as
      defined in Section 3(a)(5)(A) of the U.S. Securities Act, whether acting
      in its individual or fiduciary capacity; or                                                                                                                                                                                                                                                                                                                                                                 
|         |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ | Category 3. | A broker or dealer registered pursuant to Section 15 of
      the *Securities Exchange Act of 1934*; or                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ | Category 4. | An insurance company as defined in Section 2(13) of the
      U.S. Securities Act; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ | Category 5. | An investment company registered under the Investment
      Issuer *Act of 1940*; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ | Category 6. | A business development company as defined in Section
      2(a)(48) of the Investment Issuer Act of 1940; or                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ | Category 7. | A small business investment company licensed by the U.S.
      Small Business Administration under Section 301(c) or (d) of the *Small
      Business Investment Act of 1958*; or                                                                                                                                                                                                                                                                                                                                                                       
|         |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ | Category 8. | A plan established and maintained by a state, its
      political subdivision or any agency or instrumentality of a state or its
      political subdivisions, for the benefit of its employees, with assets in
      excess of US$5,000,000; or                                                                                                                                                                                                                                                                                                        
|         |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ | Category 9. | An employee benefit plan within the meaning of the
      Employee *Retirement Income Security Act of 1974*in which
      the investment decision is made by a plan fiduciary, as defined in Section
      3(21) of such Act, which is either a bank, savings and loan association,
      insurance company or registered investment advisor, or an employee benefit
      plan with total assets in excess of US$5,000,000 or, if a self-directed
      plan, the investment decisions are made solely by persons who are
      accredited investors; or

---

2

|________ | Category 10. | A private business development company as defined in
      Section 202(a)(22) of the Investment Advisors Act of 1940; or                                                                                                                                                                                                   
|-------- | ------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |              |                                                                                                                                                                                                                                                                                                                            
|________ | Category 11. | An organization described in Section 501(c)(3) of the
      Internal *Revenue Code*, a corporation, a Massachusetts or
      similar business trust, or a partnership, not formed for the specific
      purpose of acquiring the Shares, with total assets in excess of
      US$5,000,000; or                            
|         |              |                                                                                                                                                                                                                                                                                                                            
|________ | Category 12. | A director, executive officer or general partner of the
      Corporation; or                                                                                                                                                                                                                                              
|         |              |                                                                                                                                                                                                                                                                                                                            
|         |              |                                                                                                                                                                                                                                                                                                                            
|________ | Category 13. | A natural person whose individual net worth, or joint net
      worth with that persons spouse, at the time of this purchase exceeds
      US$1,000,000; or                                                                                                                                                               
|         |              |                                                                                                                                                                                                                                                                                                                            
|________ | Category 14. | A natural person who had an individual income in excess
      of US$200,000 in each year of the two most recent years or joint income
      with that persons spouse in excess of US$300,000 in each of those years
      and has a reasonable expectation of reaching the same income level in the
      current year; or
|         |              |                                                                                                                                                                                                                                                                                                                            
|________ | Category 15. | A trust, with total assets in excess of US$5,000,000, not
      formed for the specific purpose of acquiring the securities offered, whose
      purchase is directed by a sophisticated person as described in SEC Rule
      506(b)(2)(ii); or                                                                           
|         |              |                                                                                                                                                                                                                                                                                                                            
|________ | Category 16. | An entity in which each of the equity owners meets the
      requirements of one of the above categories.                                                                                                                                                                                                                  

Note: Subscribers purchasing for the account of a beneficial
purchaser must qualify under one or more of the categories 1 through 11 or
category 15.

**__________________________________
  Date**

**__________________________________**

**__________________________________
  (Print name of Investor)**

**By:**

**__________________________________**

**It's:**

**__________________________________**

---

SCHEDULE C

FORM OF DECLARATION FOR REMOVAL OF LEGEND

|TO: | Computershare Trust Company of Canada
|--- | -------------------------------------
|    | as registrar and transfer agent      
|    | for the Common Shares of TAG Oil Ltd.
|    | Calgary, Alberta                     

The undersigned (a) acknowledges that the sale of the
securities of TAG Oil Ltd. (the Corporation) to which this declaration relates
is being made in reliance on Rule 904 of Regulation S under the United States
Securities Act of 1933, as amended (the U.S. Securities Act), and (b)
certifies that (1) the undersigned is not an affiliate of the Corporation as
that term is defined in Rule 405 under the U.S. Securities Act, (2) the offer of
such securities was not made to a person in the United States and either (A) at
the time the buy order was originated, the buyer was outside the United States,
or the seller and any person acting on its behalf reasonably believed that the
buyer was outside the United States, or (B) the transaction was executed in, on
or through the facilities of the Toronto Stock Exchange or the TSX-V Venture
Exchange or any other Designated Offshore Securities Market as defined in
Regulation S under the U.S. Securities Act and neither the seller nor any person
acting on its behalf knows that the transaction has been prearranged with a
buyer in the United States, (3) neither the seller nor any affiliate of the
seller nor any person acting on any of their behalf has engaged or will engage
in any directed selling efforts in connection with the offer and sale of such
securities (4) the sale is bona fide and not for the purpose of washing off
the resale restrictions imposed because the securities are restricted
securities (as such term is defined in Rule 144(a)(3) under the U.S. Securities
Act) and (5) the contemplated sale is not a transaction, or part of a series of
transactions which, although in technical compliance with Regulation S, is part
of a plan or scheme to evade the registration provisions of the U.S. Securities
Act. Terms used herein have the meanings given to them by Regulation S under the
U.S. Securities Act.

|Dated: __________________________ |     | ________________________________
|--------------------------------- | --- | --------------------------------
|                                  |     | Name of Seller                  
|                                  |     |                                 
|                                  |     |                                 
|                                  | By: | ________________________________
|                                  |     | Name:                           
|                                  |     | Title:                          

---

SCHEDULE "D"

FORM 4CCORPORATE PLACEE REGISTRATION
FORM

Where subscribers to a Private Placement are not individuals,
the following information about the placee must be provided. This Form will
remain on file with the Exchange. The corporation, trust, portfolio manager or
other entity (the Placee) need only file it on one time basis, and it will be
referenced for all subsequent Private Placements in which it participates. If
any of the information provided in this Form changes, the Placee must notify the
Exchange prior to participating in further placements with Exchange listed
companies. If as a result of the Private Placement, the Placee becomes an
Insider of the Issuer, Insiders of the Placee are reminded that they must file a
Personal Information Form (2A) or, if applicable, Declarations, with the
Exchange.

|1. | Placee Information:                                                         
|-- | ----------------------------------------------------------------------------
|   | (a)                                                                         
|   |                                                                             
|   | (b)                                                                         
|   |                                                                             
|   | (c)                                                                         
|   |                                                                             
|2. | (a)                                                                         
|   |                                                                             
|   | (b)                                                                         
|   |                                                                             
|3. | If the answer to 2(b) above was
      Yes, the undersigned certifies that:
|   |                                                                             
|   | (a)                                                                         
|   |                                                                             
|   | (b)                                                                         
|   |                                                                             
|   | (c)                                                                         
|   |                                                                             
|   | (d)                                                                         
|   |                                                                             
|   | (e)                                                                         

|50519642.7             |                                    |       
|---------------------- | ---------------------------------- | ------
|FORM 4C                | CORPORATE PLACEE REGISTRATION FORM | Page 1
|(as at March 11, 2004) |                                    |       

---

|4. | If the answer to 2(a) above was No, please provide the
      names and addresses of control persons of the
Placee:
|-- | --------------------------------------------------------------------------------------------------------------------

Name
    City
    Province or State
    Country


The undersigned acknowledges that it is bound by the provisions
of applicable Securities Law, including provisions concerning the filing of
insider reports and reports of acquisitions (See for example, sections 87 and
111 of the Securities Act (British Columbia) and sections 176 and 182 of
the Securities Act (Alberta).

Acknowledgement - Personal Information

Personal Information means any information about an
identifiable individual, and includes information contained in sections 1, 2 and
4, as applicable, of this Form.

The undersigned hereby acknowledges and agrees that it has
obtained the express written consent of each individual to:

|(a) | the disclosure of Personal Information by the undersigned
      to the Exchange (as defined in Appendix 6B) pursuant to this Form;
    and                                                       
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                  
|(b) | the collection, use and disclosure of Personal
      Information by the Exchange for the purposes described in Appendix 6B or
      as otherwise identified by the Exchange, from time to
  time.

Dated at __________________on ___.

_________________________________(Name of Purchaser - please
print)

_________________________________(Authorized Signature)

_________________________________(Official Capacity - please
print)

_________________________________(please print name of
individual whose signature appears above)

THIS IS NOT A PUBLIC DOCUMENT

|50519642.7             |                                    |       
|---------------------- | ---------------------------------- | ------
|FORM 4C                | CORPORATE PLACEE REGISTRATION FORM | Page 2
|(as at March 11, 2004) |                                    |       

---



SCHEDULE E

ACKNOWLEDGEMENT  PERSONAL INFORMATION

TSX-V Venture Exchange Inc. and its affiliates, authorized
agents, subsidiaries and divisions, including the TSX-V Venture Exchange(collectively referred to as the Exchange) collect Personal Information in
certain Forms that are submitted by the individual and/or by an Issuer or
Applicant and use it for the following purposes:

to conduct background checks, to verify the Personal Information
  that has been provided about each individual,
  to consider the suitability of the individual to act as an officer, director,
  insider, promoter, investor relations provider or, as applicable, an employee
  or consultant, of the Issuer or Applicant,
  to consider the eligibility of the Issuer or Applicant to list on the Exchange,
  
  to provide disclosure to market participants as to the security holdings of
  directors, officers, other insiders and promoters of the Issuer, or its associates
  or affiliates, 
  to conduct enforcement proceedings, and 
  to perform other investigations as required by and to ensure compliance with
  all applicable rules, policies, rulings and regulations of the Exchange, securities
  legislation and other legal and regulatory requirements governing the conduct
  and protection of the public markets in Canada.

As part of this process, the Exchange also collects additional
Personal Information from other sources, including but not limited to,
securities regulatory authorities in Canada or elsewhere, investigative, law
enforcement or self-regulatory organizations, regulations services providers and
each of their subsidiaries, affiliates, regulators and authorized agents, to
ensure that the purposes set out above can be accomplished.

The Personal Information the Exchange collects may also be
disclosed:

to the agencies and organizations in the preceding paragraph,
or as otherwise permitted or required by law, and they may use it in their own
investigations for the purposes described above; and on the Exchanges website
or through printed materials published by or pursuant to the directions of the
Exchange.

The Exchange may from time to time use third parties to process
information and/or provide other administrative services. In this regard, the
Exchange may share the information with such third party service providers.

|50519642.7                                         |      
|-------------------------------------------------- | -----
|                                                   |      
|APPENDIX 6A ACKNOWLEDGEMENT  PERSONAL INFORMATION | Page1
|(as at March 11, 2004)                             |      

---