Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - TAG Oil Ltd. - Exhibit 4.1

CONSULTING AGREEMENT

THIS AGREEMENT IS MADE EFFECTIVE DECEMBER 22, 2004

AMONGST:

  
    
      TAG OIL LTD. a company incorporated under the
        laws of Yukon Territory with business offices at 1407-1050 Burrard Street,
        Vancouver, British Columbia, V6Z 2S3

      (the “Company”)

    

  

AND:

  
    
      RIMU RESOURCES LTD. (“RIMU”), of 4019
        15 Street, SW, Calgary, Alberta, T2T 4A8

      (the “Consultant”)

    

  

AND: 

  
    
      Drew Cadenhead of the same address as the Consultant
        (“Cadenhead”)

    

  

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WHEREAS the Consultant is wholly-owned
  by Cadenhead and the Company wishes to retain the Consultant to provide certain
  services and the Consultant has agreed that Cadenhead, on behalf of the Consultant
  shall provide such services to the Company, namely executive services to manage
  a junior oil and gas issuer under the general directions of its board of directors
  (the “Board”).

NOW THEREFORE, in consideration of the mutual promises
and covenants as hereinafter set forth, the parties hereto agree as follows:

1.                      
PROVISION OF SERVICES

1.1                   
The Company hereby retains the services of the Consultant and the Consultant
hereby agrees to provide executive services of Cadenhead from the Consultant’s
workplace in Calgary, Alberta to enable the Company to compete in the oil and
gas exploration business in New Zealand, and in the discretion of the Board,
North America, upon the terms and conditions set forth in this Agreement. If the
Board deems it necessary for the Consultant to provide executive services to the
Company from a different location, then the Company agrees to cover reasonable
moving expenses associated with doing so. Reasonable moving costs will be
approved on the basis of the Consultant submitting two quotes from reputable
moving companies and the Company will agree to pay the lower quote. 

1.2                    
Consultant and Cadenhead hereby unconditionally guarantee to the Company that
Cadenhead will remain the sole shareholder of Consultant during the term of this
agreement or any extension thereof and Cadenhead shall guarantee to the Company
the due performance of the Consultant’s obligations herein subject to the terms
and conditions hereof .The Consultant agrees that the services herein
contemplated to be performed by the Consultant shall be performed throughout the
term hereof on its behalf by Cadenhead. All confidentiality and non-competition
provisions herein shall apply jointly to Consultant and to Cadenhead and every
other person who may from time to time provide services to the Company on behalf
of the Consultant.

2.                      
TERM

2.1                    
Term for Services. The term for the provision of services by the
Consultant to the Company will commence on January 1, 2005 and will continue for
twenty-four months (the “Term”) subject to earlier termination by either
the Consultant or the Company in accordance with the terms hereof. The Term may
be extended thereafter upon the mutual agreement of the parties by written
request given by either party providing such extension request is accepted by
the other party at least 30 days before the two-year anniversary of this
Agreement.

2.2                    
Prior Agreements. This Agreement supersedes any prior employment or
consulting arrangements or agreements between the Company (including all of its
affiliates) and the Consultant and/or Cadenhead.

3.                      
COMPENSATION

3.1                    
For services rendered by the Consultant pursuant to this Agreement the Company
will pay the Consultant consideration of CAD$185,000 for the first year and
$200,000 for the second year, payable semi-monthly in arrears. 

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3.2                    
The Consultant or Cadenhead, at the direction of the Consultant, shall also be
entitled to retain certain incentive shares and receive an incentive option on
shares as part of the consideration for the services to be provided hereunder as
more particularly described herein.

4.                      
DUTIES

4.1                    
The Consultant shall cause Cadenhead; to assume the offices of and act as the
Company’s President, Chief Executive Officer as well as a Director. Consultant
will provide services to assist in the development of Company’s business by
implementing a strategy for executing the business plan and shall perform such
other duties and assignments as may be from time to time determined by the Board
..The Consultant shall be responsible for all aspects of the sound management of
the Company including establishment of proper internal control procedures and
documentation of same, reporting protocols, preparation of proper financial
statements and corporate disclosure documents in accordance with all applicable
Canadian and United States standards and compliance by the Company with all
applicable laws, including securities laws generally and in particular the US
Sarbanes-Oxley legislation.

4.2                    
Expenses. The Company will reimburse the Consultant for reasonable
out-of-pocket business expenses incurred by the Consultant on behalf of the
Company. Expenses in excess of $2,000 individually or $5,000 in aggregate per
month must be pre-approved by the Board.

5.                      
FULL TIME SERVICES

5.1                    
The Consultant shall cause Cadenhead to devote substantially full time
attention, energies and best efforts to the Company but it may engage in other
business activity outside of normal business hours as long as such activity does
not unreasonably interfere, compete with or conflict with the duties of the
Consultant hereunder or contravene sections 7,8 or 10 hereof. The Consultant
shall be paid for 52 weeks per year but shall be obligated to perform services
hereunder for only 48 weeks to permit it to allow Cadenhead an annual vacation
at times to be mutually agreed with the Company. 

6.                      
AGREEMENT TO CANCEL INCENTIVE SHARES AND GRANT OF INCENTIVE OPTIONS

6.1                    
As partial consideration for the Company entering into this Agreement, the
Consultant hereby agrees to sell to the Company for cancellation and return to
treasury, 1,800,000 of the Consultant’s previously issued 2,100,000 incentive
common shares at a price of US$0.00333 per share or US$5,994 total which is
payable on execution hereof against delivery of a stock power of attorney and
any other documents required to transfer the certificate(s) representing
1,800,000 shares of the Issuer, duly endorsed with signature guarantee. As
incentive for the Consultant to continue to use its best efforts in providing
services to the Company, the Consultant will hereby retain 300,000 purchased
common shares (the “Incentive Shares”) of the Company, according to the terms
and vesting conditions listed in Exhibit “1” hereto.

6.2                    
The Consultant agrees to vote any unvested Incentive Shares at the direction of
the Board at all shareholders’ meetings of the Company held until the vesting of
the Incentive Shares from the date hereof. The Consultant shall forthwith on
request execute and deliver a proxy on the Incentive Shares to the Secretary of
the Company prior to the time required for deposit of proxies in order to
facilitate this undertaking.

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6.3                    
In the event that this agreement is terminated for cause or not renewed by
either party upon expiry of each of the first two-year terms, then the
Consultant agrees to immediately sell back to the Company all of the Incentive
Shares which have not then vested at a price of US$0.00333 per share. The
Company’s Corporate Secretary from time-to-time appointed shall keep possession
of certificates representing the Incentive Shares pending their release to the
Consultant upon vesting or release to the Company upon re-purchase by the
Company. The Consultant agrees that he shall neither sell nor agree to sell nor
purport to, sell, transfer, pledge or otherwise deal with the Incentive Shares
prior to completion of the vesting requirements. The Company as incentive for
the Consultant to continue to use its best efforts in providing services to the
Company, the Company will hereby grant 400,000 stock options of the Company to
Mr. Cadenhead, according to the terms listed in Exhibit “2” hereto.

6.4                    
The Company, as incentive for the Consultant to continue to use its best efforts
to further the interests of the Company, will hereby agree to grant an
additional 200,000 stock options to Mr. Cadenhead of the Company upon the
conditions being met and according to the terms listed in Exhibit “3”. 

6.5                    
The Consultant agrees to duly and promptly pay all income taxes related to the
remuneration and benefits (including the Incentive Shares and Options) received
in connection with this Agreement and to save harmless the Company and its
officers and directors in connection with this undertaking.

6.6                    
The Company may appoint the Company’s Canadian counsel, as determined from time
to time, as escrow agent to administer the Incentive Shares in accordance with
the terms hereof. In such event the Company, the sole shareholder and the
Consultant agree to enter into an escrow agreement in such counsels’ usual
format.

6.7                    
The Company may in its sole discretion permit Cadenhead to hold or acquire the
foregoing options or Incentive Shares personally (in lieu of the Consultant) for
tax optimization reasons, subject to the Consultant’s written request, but in
such event all the restrictions and agreements herein provided with respect to
such shares and options shall then apply to Cadenhead 

7.                      
TERMINATION

7.1                    
Termination With Cause. The Company may, at any time, without advance
notice to the Consultant, or payment of any compensation in lieu of notice,
forthwith terminate the services of the Consultant for cause. The term “cause”
means (i) a persistent breach of this Agreement by the Consultant and the
Consultant fails to cure the breach within thirty days following written notice
of a breach by the Company; or (ii) the existence or occurrence of malfeasance
or gross negligence entitling the Company to terminate the Consultant at common
law or (iii) Cadenhead no longer being solely responsible to provide the
services of the Consultant hereunder or Cadenhead ceasing to wholly-own and
manage the Consultant.

7.2                    
Termination Without Cause. In addition to the Company’s absolute
discretion to not renew this Agreement after two years, the Company may at any
time, upon 12 months advance notice to the Consultant, forthwith terminate the
services of the Consultant other than for cause. In the case of termination
other than for cause, all unvested options will immediately vest ( but subject
to expiry 30 days later if the Company is then listed on the TSX Venture
Exchange (or TSX-V)) 

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and the Company will be liable to pay the Consultant an amount
equal to one year of the annual cash compensation hereunder. In addition, in the
case for termination other than for cause, all unvested incentive shares will
immediately vest and be deemed free and clear of resale restrictions except
those of general application. This Agreement will terminate upon the death or
disability (incapacity for not less than 45 days) of Cadenhead, which
termination will be deemed to be “other than for cause”. 

7.3                    
Termination by the Consultant. The Consultant may terminate the provision
of its services under this Agreement on not less than 120 days’ notice to the
Company, in which case the obligations of the Company will be the same as though
the services were terminated for cause.

7.4                    
No Other Entitlements The Consultant acknowledges and agrees that the
notice and provisions for compensation on termination provided in this Section
are fair and reasonable and agrees that upon any termination of the Consultant’s
services by the Company, or upon any termination of this Agreement by the
Consultant, neither the Consultant nor Cadenhead will have any action, cause of
action, claim or demand against the Company or any other person as a consequence
of such termination.

7.5                    
Resignation, Return of Company Records. On termination hereof for any
reason, Cadenhead shall immediately resign from any office or directorship of
the Company and any affiliate. The Consultant and Cadenhead shall return to the
Company’s Secretary any records and documents pertaining to the Company, its
business, assets and prospects (including potential acquisitions) to the Company
immediately on termination hereof without retaining copies of such documents
except to the extent required by law. If any record copies are retained
Consultant shall identify these to the Board and shall keep them confidential.

7.6                    
In the event of termination with cause, or non-renewal prior to the listing on
TSX-V or prior to vesting provisions of the incentive shares after listing on
TSX-V, hereof the Consultant (and/or Cadenhead as the case may be) will
immediately sell the Incentive Shares back to the Company at $0.00333 each. In
the case for termination other than for cause, all unvested incentive shares
will immediately vest and be deemed free and clear of resale restrictions except
those of general application.

7.7                    
Cadenhead shall not be personally entitled to any additional consideration from
the Company for personally supplying any of the services of the Consultant
hereunder or for personally serving as an officer or director of the
Company.

8.                      
CONFIDENTIAL INFORMATION AND WORK PRODUCT 

8.1                    
The Consultant will not, during the Term or at any time after the termination of
his services by the Company, use for himself or others, divulge or convey to
others, or aid or abet others to divulge or convey to others, any information or
knowledge relating to the properties, prospects and business of the Company, or
any of their affiliates, including information relating to employees, Business
Partners (as defined below), and intellectual property in any way obtained by
him during his association with the Company or in any way obtained by other
employees of the Company, unless (i) such information, knowledge, data or
property is properly in the public domain other than through a breach of this
Agreement; (ii) the Consultant has received prior authorization by the Company
or such use divulgence or conveyance is reasonably necessary in the course of
the 

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Consultant’s duties; or (iii) required by law. All intellectual
property, resource property prospects and work product conceived or developed by
the Consultant or Cadenhead during the term hereof belongs to the Company
absolutely.

8.2                    
Notwithstanding anything else in this Agreement, it is expressly acknowledged
and understood by the Consultant and Cadenhead that all of the work product of
the Consultant and Cadenhead while retained by the Company hereunder or holding
any office in the Company shall belong to the Company absolutely and
notwithstanding the generality of the foregoing, all maps, logs, data, notes,
documents, correspondence produced by the Consultant or Cadenhead during the
term of employment hereunder shall be the exclusive property of the Company. The
Consultant and Cadenhead further agree to execute without delay or request for
further consideration any necessary documents and assurances as may be necessary
to transfer all rights to same to the Company. In the event of the termination
of the Consultant for any reason hereunder, the Consultant shall promptly turn
over to the Company any intellectual property which is evidenced by any physical
documentation (whether written, digital, magnetic, electronic or otherwise)
together with any other of the Company’s assets or property in his possession or
under his control as further described below.

9.                      
SURVIVAL OF COVENANTS

9.1                    
Except as otherwise specifically provided herein and notwithstanding the
termination of the services of the Consultant or termination of this Agreement,
the covenants, representations and warranties contained in §7, 8and §10 hereof
will survive such termination and will continue in force and effect for the
benefit of the Company for a time period unlimited in duration.

10.                      NON-COMPETITION
COVENANTS OF THE EXECUTIVE

10.1                    Definitions.
  In this Section:

“Business” means the
  business carried on by the Company and its affiliates relating to exploration
  for oil and gas;

“Competitive Business”
  means any business which is involved in the acquisition, exploration or development
  of oil and/or gas permits, properties or other hydrocarbon interests (including
  joint venture interests) in which the Company is, during the term hereof or
  at the date of termination hereof, active in the investigation, negotiation
  or exploration of or in which it holds an interest;

“Business Partner”
  means any person who has been a customer, supplier, joint venture party, property
  optionor or vendor to the Company or any its affiliates at any time within a
  period of one year prior to the date of termination of this Agreement;

“Restricted Area” means
  any claim, concession, prospect or property interest which fall within the definition
  of a Competitive Business; and

“Restricted Period”
  means one year from the date of termination of this Agreement whether by expiry
  or voluntary or involuntary termination.

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10.2                   
  Non-Competition. The Consultant will not, during the Restricted Period
  and within the Restricted Area, 

(a)          
  directly or indirectly carry on, engage in or participate in, any Competitive
  Business either alone or in partnership or jointly or in conjunction with any
  other person;

(b)          
  directly or indirectly assist (as principal, beneficiary, director, shareholder,
  partner, nominee, executor, trustee, agent, servant, employee, independent contractor,
  supplier, consultant, lender, guarantor, financier or in any other capacity
  whatever) any person to carry on, engage in or participate in, a Competitive
  Business or within the restricted Area ; and

(c)          
  have any direct or indirect interest or concern (as principal, beneficiary,
  director, shareholder, partner, nominee, executor, trustee, agent, servant,
  employee, consultant, independent contractor, supplier, creditor or in any other
  capacity whatever) in or with any person, if any part of the activities of such
  person consists of carrying on, engaging in or participating in a Competitive
  Business or within the Restricted Area except holding securities of a public
  company constituting less than 10% of its outstanding share capital;

10.3                   
  Non-Solicitation. During the Restricted Period and within the Restricted
  Area, the Consultant will not,

(a)          
  directly or indirectly solicit any Business Partner;

(b)          
  directly or indirectly assist (whether as principal, beneficiary, servant, director,
  shareholder, partner, nominee, executor, trustee, agent, employee, independent
  contractor, supplier, consultant, lender, financier or in any other capacity
  whatever) any person directly or indirectly to solicit any Business Partner;
  or

(c)          
  have any direct or indirect interest or concern (be it as principal, beneficiary,
  director, shareholder, partner, nominee, executor, trustee, agent, servant,
  employee, consultant, independent contractor, supplier, creditor or in any other
  capacity whatever) in or with any person if any of the activities of which person
  consists of soliciting any Business Partner except holding securities of a public
  company constituting less than 10% of its outstanding share capital;

if such solicitation would, directly or indirectly, be intended
to result in a sale of any product or service to such Business Partner and is
directly or indirectly competitive or potentially competitive with any product
or service then produced by the Business;.

10.4                   
Employees, etc. The Consultant will not:(a) during the Restricted Period,
directly or indirectly, induce any individual who to his knowledge is then
employed by the Company or the Parent, or any of their subsidiaries, to leave
the employ of the Company or the Parent, or any of their subsidiaries without
the prior written consent of the Company.

10.5                   
  Covenants Reasonable. The Consultant agrees that,

(a)          
  the covenants in this Agreement are reasonable in the circumstances and are
  necessary to protect the Company; and

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(b)          
  the breach by him of any of the provisions of this Agreement would cause serious
  and irreparable harm to the Company, and their shareholders which could not
  adequately be compensated for in damages in the event of a breach by him of
  such provisions or an order of injunction being issued against him restraining
  him from any further breach of such provisions and agrees that such injunction
  may be issued against him without the necessity of an undertaking as to damages
  by the Company, or their shareholders; the provisions of this section shall
  not be construed so as to be in derogation of any other remedy which the Company,
  or any of their shareholders may have in the event of such a breach.

10.6                   
Covenants Independent. The existence of any claim or cause of action of
the Consultant against the Company, or any of their shareholders will not
constitute a defence to the enforcement by the Company, or any of their
shareholders of the provisions of this Agreement.

10.7                   
Invalidity. In the event that any term or provision of this Agreement
shall, to any extent, be invalid or unenforceable, the remaining terms and
provisions of this Agreement shall not be affected thereby and shall be valid
and enforceable to the fullest extent permitted by law.

10.8                   
Rights in Addition. The rights and remedies of the Company, hereunder are
in addition to and not in substitution for any other rights of remedies which
they may have at any time against the Consultant or Cadenhead, at law or in
equity.

11.                      SUCCESSORS
AND ASSIGNS

11.1                   
This Agreement will inure to the benefit of, and be binding upon, the parties
hereto and their legal representatives, successors and permitted assigns except
that no claims may be asserted by the legal representatives, successors and
assignees of Consultant or Cadenhead in respect of compensation or other
benefits for periods following the death or total incapacity of Cadenhead other
than those expressly provided for in this Agreement.

12.                     
NOTICES

12.1                   
Any notice required or permitted, to be given, under this Agreement will be
deemed to have been duly given only if such notice is in writing and is
delivered to addresses of the parties hereto first above written. A party may
change an address for notices at any time by notice duly given.

13.                     
GOVERNING LAW

13.1                   
This Agreement is and will be deemed to be made in British Columbia and for all
purposes will be governed exclusively by and construed and enforced in
accordance with the laws prevailing in British Columbia, and the rights and
remedies of the parties will be determined in accordance with those laws.

14.                     
SEVERABILITY

14.1                   
If any provision of this Agreement is at any time unenforceable or invalid for
any reason it will be severable from the remainder of this Agreement and, in its
application at that time, this Agreement will be construed as though such
provision was not contained herein and the 

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remainder will continue in full force and effect and be
construed as if this Agreement had been executed without the invalid or
unenforceable provision.

15.                      INDEPENDENT
LEGAL ADVICE

15.1                   
Each of the parties hereto acknowledges that they have each received independent
legal advice in relation to the terms and conditions of this Agreement.

IN WITNESS WHEREOF the each of the parties hereto have
duly executed and delivered this Agreement as of the ____day of
_________,
2005 with effect intended as of the date first above written.

THE COMPANY: TAG OIL LTD.

	Per:	 
    
	               
         GARTH JOHNSON, CORPORATE SECRETARY 	Date 

THE CONSULTANT:

RIMU RESOURCES LTD.

	Per: 	 
    
	               
         DREW CADENHEAD, PRESIDENT 	Date 

	Drew Cadenhead,
      in his personal capacity 	 
	 	 
	 	 
	 	 

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EXHIBIT 1 Incentive Shares

Per Item 6 of the Consulting Agreement, the Consultant and
Cadenhead, agree to the following vesting terms of the remaining 300,000
previously purchased Incentive Shares of the Company as such shares are
constituted on the date hereof:

	 	1. 	The Incentive Shares purchased by Cadenhead
        will be subject the following additional share vesting provisions before
        they shall belong to Cadenhead and shall be sold to the Company at cost
        if the Agreement terminates for cause or non-renewal before the achievement
        of the following milestones: 

	 	 	 	 
	 		i) 
	Zero shares vest until the Company obtains a listing
        on the TSX Venture Exchange. 

	 	 	 	 
	 		ii) 
	50,000 shares vest upon the Company obtaining a listing
        on the TSX Venture Exchange. 

	 	 	 	 
	 		iii) 
	25,000 shares shall vest per year starting one year
        after the Company obtains a listing on the TSX Venture Exchange until
        all shares are vested. 

	 	 	 	 
	 		iv) 
	If the Company obtains a Tier 1 listing on the TSX
        Venture Exchange by meeting the financial performance, resource and stage
        of development requirement necessary for a Tier 1 TSX Venture Exchange
        listing the shares will qualify for an accelerated vesting period of an
        additional 25,000 shares vesting every six months from the date the Company
        qualifies for a Tier 1 listing. 

	 	 	 	 
	 		v) 
	In the case for termination other than for cause,
        all unvested incentive shares will immediately vest and be deemed free
        and clear of any resale restrictions except those of general application
        under law 

	 	 	 	 
	 	2. 	Voluntary resale restriction schedule of
        vested shares (non-cumulative): 

	 	 	 	 
	 		i) 
	Up to 20,000 shares within a thirty day period while
        the Company has a Tier 2 listing on the TSX Venture Exchange. 

	 	 	 	 
	 		ii) 
	40,000 per thirty-day period, if the Company achieves
        a Tier 1 listing on the TSX Venture Exchange. 

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	 	3. 	Items 2(i) and 2(ii) shall be waived by the
        Company in the event the Company’s board agrees to support a formal
        take-over bid from a bona fide third party or in the event such a bid
        is made and at least 50% of the Company’s shares (excluding the Incentive
        Shares) are tendered to the bid, and the bid is completed. 

	 	 	 
	 	4. 	Per Item 6.3 and 6.4 in the Consulting and non-competition
        agreement, in the event of termination for cause or expiry of the contract,
        the sole shareholder of the Consultant agrees to sell the unvested Incentive
        Shares back to the Company, immediately upon termination or expiry, at
        a price of US$0.00333 per share. 

EXHIBIT 2 Incentive Stock Option

Per Item 6.5 of the Consulting Agreement above, the Consultant
or Cadenhead (the recipient to be determined by them), is granted by the
Company, an Option to purchase all or any part of 400,000 common shares of the
Company from treasury, exercisable at the price of US$0.65 per share (the
exercise price) for a five year period. The right to exercise the Option and
acquire the Optioned Shares will vest 20% per year from the date of granting of
the optioned shares. 

In addition, if the Company achieves a Tier 1, TSX Venture
Exchange listing, the Company agrees to grant to the Consultant or Cadenhead (at
their determination), the option to purchase all or any part of an additional
200,000 common shares of the Company from treasury, exercisable at the
prevailing market price per share (the exercise price) for a five year period.
The Optioned shares will vest 20% per year from the date of achieving a Tier 1
listing on the TSX Venture Exchange.Filed by Automated Filing Services Inc. (604) 609-0244 - TAG Oil Ltd. - Exhibit 4.2

DIRECTOR’S COMPENSATION AND INDEMNITY AGREEMENT

THIS AGREEMENT is made as of the 2nd day of February,
2005.

BETWEEN:

  
    
      TAG OIL LTD., a company incorporated under the
        laws of the Yukon having an office at Suite 400- 534 17th Avenue
        SW, Calgary, Alberta T2S 0B1

      (the “Corporation”)

    

  

AND:

  
    
      Paul Infuso, of Winnipeg, Manitoba, R3P 2K1

      (the “Indemnitee”)

    

  

WHEREAS:

(A)              
 For the benefit of the Corporation, the Indemnitee has consented and has
been duly elected to act as a director and/or officer of the Corporation;
and

(B)                 The
Indemnitee, as a condition to his acting as a director of the Corporation, has
requested that the Corporation, and the Corporation has agreed to, indemnify and
save harmless the Indemnitee in respect of all damages, liabilities, costs,
charges and expenses arising by reason of his being a director or officer of the
Corporation or of any of its affiliates as hereinafter provided.

NOW THEREFORE THIS AGREEMENT WITNESSES that in
consideration of the sum of $1.00 now paid by the Indemnitee to the Corporation
(the receipt and sufficiency of which is hereby acknowledged by the Corporation)
and other good and valuable consideration including the Indemnitee acting as a
director of the Corporation, the parties hereby covenant and agree with each
other as follows:

Contracts With The Corporation

1.                 Subject
to the Yukon Business Corporations Act (the “Act”),

	 	(a) 	the Indemnitee will not be disqualified, by being
        a director, or by reason of holding any other office or place of profit
        under the Corporation or under any body corporate in which the Corporation
        is a shareholder or otherwise interested, 

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	 		from entering into any contract, transaction or arrangement
        with the Corporation either as vendor, purchaser or otherwise, or from
        being concerned or interested in any manner whatsoever in any contract,
        transaction or arrangement made or proposed to be entered into with the
        Corporation, 

	 	 	 
	 	(b) 	no such contract, transaction or arrangement is thereby
        void or liable to be avoided, and 

	 	 	 
	 	(c) 	the Indemnitee will not be liable to account to the
        Corporation for any profit arising from any such office or place of profit
        or realized by any such contract, transaction or arrangement. 

Disclosure

	 	(d) 	Except as required by the Act, the Indemnitee will
        not be obliged to make any additional declaration or disclosure of interest
        or refrain from voting in connection with the matters referred to in s.1.
      

Indemnity

2.                 Subject
to §2.(a) and §2.(b) , the Corporation hereby undertakes and agrees to indemnify
and save harmless the Indemnitee and the Indemnitee’s heirs and legal
representatives, respectively, from and against all costs, charges and expenses,
including all amounts paid to settle an action or satisfy any judgment,
reasonably incurred by the Indemnitee in respect of any civil, criminal,
administrative, investigative or other proceeding in which the Indemnitee is
involved by reason of being or having been an Indemnitee of the Corporation,
if

	 	(a) 	the Indemnitee acted honestly and in good faith with
        a view to the best interests of the Corporation, and 

	 	 	 
	 	(b) 	in the case of a criminal or administrative action
        or proceeding that is enforced by a monetary penalty, the Indemnitee had
        reasonable grounds for believing that the Indemnitee’s conduct was
        lawful. 

3.                 In
respect of any action by or on behalf of the Corporation to procure a judgment
in its favour to which the Indemnitee is made a party by reason of being or
having been an Indemnitee of the Corporation, the Corporation hereby undertakes
and agrees (subject to obtaining approval of the Supreme Court of British
Columbia) to indemnify and save harmless the Indemnitee and the Indemnitee’s
heirs and legal representatives, respectively, against all damages, liabilities,
costs, charges and expenses reasonably incurred by the Indemnitee in connection
with any such action if the Indemnitee fulfilled the conditions set forth in s.
3 above. The Corporation also agrees to make application, and use commercially
reasonable efforts, to obtain such approval of the court.

4.                 The
Corporation may indemnify the Indemnitee in connection with a proceeding or part
thereof initiated by the Indemnitee only if such proceeding or part thereof was
authorized by the board of the Corporation.

- 3 -

Compensation for Services as a Director

5.                
The Corporation will compensate the Indemnitee for services provided to the
Corporation by the Indemnitee for so long as he is a director of the Corporation
as follows:

	 	(a) 	in an amount equal to $12,000 per annum, payable
        monthly (the “Fee”). The Indemnitee hereby acknowledges that
        it is responsible for remitting its own taxes and any contributions required
        by law to be remitted in connection with the Fee, and the Corporation
        shall have no responsibility in respect of any failure by the Indemnitee
        to properly remit such amounts when due, and the Indemnitee agrees to
        indemnify and save the Corporation harmless from and against assessments,
        losses or penalties actually incurred by the Corporation in this respect;
        and 

	 	 	 
	 	(b) 	subject to the approval of any stock exchange which
        may list the Corporation’s shares, incentive stock options exercisable
        to purchase 75,000 common shares of the Corporation at a price of US$0.65
        per share until February 2, 2010 based on the terms, conditions and vesting
        requirements of the Corporation’s Stock Option Plan. 

Advance for Expenses

6.                 The
Corporation shall advance moneys to the Indemnitee for the costs, charges and
expenses of a proceeding referred to in §2., or (with the approval of the
Supreme Court of British Columbia) §3, provided that the Indemnitee delivers to
the Corporation a written undertaking by the Indemnitee to repay all amounts so
advanced if it is ultimately determined that the Indemnitee is not entitled to
be indemnified under this Agreement or otherwise.

Amplification of Rights

7.                 The
provisions of this Agreement are in amplification of or in addition to, and not
by way of limitation of or substitution for, any rights, immunities or
protection conferred on any director, officer, employee or agent of the
Corporation by the Articles, by-laws, any law or otherwise.

Notice

8.                 Any
notice required or permitted to be given by any party hereto shall be
sufficiently given if delivered or sent by telecopy or prepaid courier,
addressed to the party entitled to receive the same at the address set out on
the first page of this Agreement for such party and shall be deemed to have been
given, if delivered, on the date on which it was delivered, if sent by telecopy,
on the next business day, excluding Saturdays, following the day it was so sent
and, if couriered, on the third business day, excluding Saturdays, following the
day it was so couriered. The parties hereto may change their address for service
from time to time by notice to the other in accordance with this paragraph.

- 4 -

Heirs and Successors

9.                 This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and assigns.
This Agreement may not be assigned by the Corporation without the express
written consent of the Indemnitee.

Further Actions

10.                The
Corporation covenants and agrees to do all acts and things and to execute and
deliver such further and other deeds and assurances as may be necessary to carry
out the true intent and meaning of this Agreement fully and effectually.

Governing Law and Attornment

11.                This
Agreement shall be governed by and construed in accordance with the laws of the
Yukon Territory however each of the parties hereby attorns to the jurisdiction
of the Courts of the Province of British Columbia in the event of a dispute
hereunder.

IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first written above.

	TAG OIL LTD. 	 
	 	  	 
	Per:	  	 
	 	Drew Cadenhead, President and CEO 	 
	 	  	 
	Per:	  	 
	 	Garth Johnson, Corporate Secretary and CFO 	 

- 5 -

	SIGNED, SEALED AND DELIVERED by 	) 	  
	Paul Infuso in the presence of: 	) 	  
	  	) 	  
	  	) 	  
	  	) 	 
    
	Witness 	) 	Paul Infuso 
	  	) 	  
	  	) 	  
	Name 	) 	  
	  	) 	  
	  	) 	  
	  	) 	  
	Address 	) 	  
	  	) 	  
	  	) 	  
	  	) 	  
	  	) 	  

- 6 -

DIRECTOR’S COMPENSATION AND INDEMNITY AGREEMENT

THIS AGREEMENT is made as of the 2nd day of February,
2005.

BETWEEN:

  
    
      TAG OIL LTD., a company incorporated under the
        laws of the Yukon having an office at Suite 400- 534 17th Avenue
        SW, Calgary, Alberta T2S 0B1

      (the “Corporation”)

    

  

AND:

  
    
      James Smith, of Calgary, Alberta T2T 3J2

      (the “Indemnitee”)

    

  

WHEREAS:

(C)               
For the benefit of the Corporation, the Indemnitee has consented and has been
duly elected to act as a director and/or officer of the Corporation; and

(D)                
The Indemnitee, as a condition to his acting as a director of the Corporation,
has requested that the Corporation, and the Corporation has agreed to, indemnify
and save harmless the Indemnitee in respect of all damages, liabilities, costs,
charges and expenses arising by reason of his being a director or officer of the
Corporation or of any of affiliates as hereinafter provided.

NOW THEREFORE THIS AGREEMENT WITNESSES that in
consideration of the sum of $1.00 now paid by the Indemnitee to the Corporation
(the receipt and sufficiency of which is hereby acknowledged by the Corporation)
and other good and valuable consideration including the Indemnitee acting as a
director of the Corporation, the parties hereby covenant and agree with each
other as follows:

Contracts With The Corporation

12.                
Subject to the Yukon Business Corporations Act (the “Act”),

	 	(a) 	the Indemnitee will not be disqualified, by being
        a director, or by reason of holding any other office or place of profit
        under the Corporation or under any body corporate in which the Corporation
        is a shareholder or otherwise interested, from entering into any contract,
        transaction or arrangement with the Corporation 

- 7 -

	 		either as vendor, purchaser or otherwise, or from
        being concerned or interested in any manner whatsoever in any contract,
        transaction or arrangement made or proposed to be entered into with the
        Corporation, 

	 	 	 
	 	(b) 	no such contract, transaction or arrangement is thereby
        void or liable to be avoided, and 

	 	 	 
	 	(c) 	the Indemnitee will not be liable to account to the
        Corporation for any profit arising from any such office or place of profit
        or realized by any such contract, transaction or arrangement. 

Disclosure

	 	(d) 	Except as required by the Act, the Indemnitee will
        not be obliged to make any additional declaration or disclosure of interest
        or refrain from voting in connection with the matters referred to in s.1.
      

Indemnity

13.                Subject
to §2.(a) and §2.(b) , the Corporation hereby undertakes and agrees to indemnify
and save harmless the Indemnitee and the Indemnitee’s heirs and legal
representatives, respectively, from and against all costs, charges and expenses,
including all amounts paid to settle an action or satisfy any judgment,
reasonably incurred by the Indemnitee in respect of any civil, criminal,
administrative, investigative or other proceeding in which the Indemnitee is
involved by reason of being or having been an Indemnitee of the Corporation,
if

	 	(a) 	the Indemnitee acted honestly and in good faith with
        a view to the best interests of the Corporation, and 

	 	 	 
	 	(b) 	in the case of a criminal or administrative action
        or proceeding that is enforced by a monetary penalty, the Indemnitee had
        reasonable grounds for believing that the Indemnitee’s conduct was
        lawful. 

14.                In
respect of any action by or on behalf of the Corporation to procure a judgment
in its favour to which the Indemnitee is made a party by reason of being or
having been an Indemnitee of the Corporation, the Corporation hereby undertakes
and agrees (subject to obtaining approval of the Supreme Court of British
Columbia) to indemnify and save harmless the Indemnitee and the Indemnitee’s
heirs and legal representatives, respectively, against all damages, liabilities,
costs, charges and expenses reasonably incurred by the Indemnitee in connection
with any such action if the Indemnitee fulfilled the conditions set forth in s.
3 above. The Corporation also agrees to make application, and use commercially
reasonable efforts, to obtain such approval of the court.

15.                The
Corporation may indemnify the Indemnitee in connection with a proceeding or part
thereof initiated by the Indemnitee only if such proceeding or part thereof was
authorized by the board of the Corporation.

- 8 -

Compensation for Services as a Director

16.               
The Corporation will compensate the Indemnitee for services provided to the
Corporation by the Indemnitee for so long as he is a director of the Corporation
as follows:

	 	(a) 	in an amount equal to $6,000 per annum, payable monthly
        (the “Fee”). The Indemnitee hereby acknowledges that it is responsible
        for remitting its own taxes and any contributions required by law to be
        remitted in connection with the Fee, and the Corporation shall have no
        responsibility in respect of any failure by the Indemnitee to properly
        remit such amounts when due, and the Indemnitee agrees to indemnify and
        save the Corporation harmless from and against assessments, losses or
        penalties actually incurred by the Corporation in this respect; and 

	 	 	 
	 	(b) 	subject to the approval of any stock exchange which
        may list the Corporation’s shares, incentive stock options exercisable
        to purchase 50,000 common shares of the Corporation at a price of US$0.65
        per share until February 2, 2010 based on the terms, conditions and vesting
        requirements of the Corporation’s Stock Option Plan. 

Advance for Expenses

17.               
The Corporation shall advance moneys to the Indemnitee for the costs, charges
and expenses of a proceeding referred to in §2., or (with the approval of the
Supreme Court of British Columbia) §3, provided that the Indemnitee delivers to
the Corporation a written undertaking by the Indemnitee to repay all amounts so
advanced if it is ultimately determined that the Indemnitee is not entitled to
be indemnified under this Agreement or otherwise.

Amplification of Rights

18.               
The provisions of this Agreement are in amplification of or in addition to, and
not by way of limitation of or substitution for, any rights, immunities or
protection conferred on any director, officer, employee or agent of the
Corporation by the Articles, by-laws, any law or otherwise.

Notice

19.               
Any notice required or permitted to be given by any party hereto shall be
sufficiently given if delivered or sent by telecopy or prepaid courier,
addressed to the party entitled to receive the same at the address set out on
the first page of this Agreement for such party and shall be deemed to have been
given, if delivered, on the date on which it was delivered, if sent by telecopy,
on the next business day, excluding Saturdays, following the day it was so sent
and, if couriered, on the third business day, excluding Saturdays, following the
day it was so couriered. The parties hereto may change their address for service
from time to time by notice to the other in accordance with this paragraph.

- 9 -

Heirs and Successors

20.               
This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
assigns. This Agreement may not be assigned by the Corporation without the
express written consent of the Indemnitee.

Further Actions

21.               
The Corporation covenants and agrees to do all acts and things and to execute
and deliver such further and other deeds and assurances as may be necessary to
carry out the true intent and meaning of this Agreement fully and
effectually.

Governing Law and Attornment

22.               
This Agreement shall be governed by and construed in accordance with the laws of
the Yukon Territory however each of the parties hereby attorns to the
jurisdiction of the Courts of the Province of British Columbia in the event of a
dispute hereunder.

IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first written above.

TAG OIL LTD.

	Per:		 
	 	Drew Cadenhead, President and CEO 	 
	 	  	 
	Per:		 
	 	Garth Johnson, Corporate Secretary and CFO 	 

- 10 -

	SIGNED, SEALED AND DELIVERED by 	) 	  
	James Smith in the presence of: 	) 	  
	  	) 	  
	  	) 	  
	  	) 	 
    
	Witness 	) 	James Smith 
	  	) 	  
	  	) 	  
	Name 	) 	  
	  	) 	  
	  	) 	  
	  	) 	  
	Address 	) 	  
	  	) 	  
	  	) 	  
	  	) 	  
	  	)

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