Over the last few years, Tap Oil has suffered from a failure to...

Over the last few years, Tap Oil has suffered from a failure to find sufficient oil to boost reserves. However, with the company set to embark on an exciting period of exploration, we expect to see better times ahead.

The company retains a cash balance of over $100 million and has budgeted more than $40 million on exploration over the next 12 months. Furthermore, Tap is debt free and completely unhedged with respect to its current oil and gas production.

One very exciting exploration project is area WA-351-P, (Tap holds a 25 percent stake) offshore Western Australia. The company is currently examining the immense deeper gas potential of the block, which is a proven gas fairway hosting discoveries containing trillions of cubic feet of gas.

Meanwhile in New Zealand, Tap has a 40 percent stake and is the operator of the Barque prospect, offshore the East Coast of New Zealand's South Island. Tap anticipates drilling a well in early 2008 that will test a massive 5 trillion cubic feet gas/500 million barrel condensate target.

With such an aggressive exploration program, supported by a strong balance sheet, we believe the prospects for Tap Oil are better than they have been for several years