Tap announces share buy-back

Shares in West Perth-based oil and gas producer and explorer Tap Oil Ltd have surged almost 6 per cent after it announced an on market share buy back of up to 10 million shares to enhance returns to shareholders.

At 1242 WST, shares in Tap were up 11 cents to $1.96.

A similar buy back was announced in February 2005 whereby a total of 1.8 million shares were bought back.

Below is the edited announcement:

Tap Oil Limited ("Company") intends to carry out an on-market share buy-back of up to
10 million shares to enhance returns to shareholders.

A similar buy back was announced in February 2005 whereby a total of 1.8 million shares were bought back. In support of this decision, Tap's Board points to the Company's following near-term activities and plans.

Woollybutt South Development
The Woollybutt Joint Venture has recently agreed to purchase the long lead time equipment
necessary for the development of the Woollybutt South field by completing Woollybutt-4 as a
fourth production well. A rig slot has been procured to complete this well in Q3/4 2006 as a
producer which will be tied into the northern field via sub-sea flexible flow lines. Additional oil
from development of this well will significantly extend the field life and recoverable oil volumes
from both the Woollybutt North and South fields whilst the production, storage and off take vessel
is on location. Similar long lead time equipment is also being ordered for Woollybutt-6 to keep
open the option to accelerate development of this well.
Harriet Joint Venture Production and Exploration
The Harriet Joint Venture has an intensive drilling programme scheduled for 2006. The first well
in this programme, Zephyrus-1, was a small discovery and is already on production.
A further 10 wells are planned for the balance of 2006 with two rigs expected to be in the area by
mid year.
Other Exploration
Tap has budgeted over $45 million for exploration in 2006 which is expected to be fully funded
from production cash flows. These funds are allocated over Tap's exploration acreage in Australia
and New Zealand and to acquire interests in new areas. Whilst the recent dry hole outcome at the
high risk/high reward Jacala-1 was a disappointment, Tap remains enthusiastic at the chances of
discovering more reserves from the remainder of its large 2006 exploration programme.
Key wells, if successful, have the potential to add material value. Specifically, the Amulet-1 well
(which is targeting up to 40 mmbls of oil) is expected to spud by 22 May 2006. Later in the year,
Galloway-1 and Cutter -1 are scheduled to be drilled and rig slots are already allocated for these
wells. Marley-1 will be re-drilled later this year or early next year.
With continued high oil prices and ongoing production from both the Woollybutt and Harriet
group of fields, Tap's Board has confidence in the Company's future cash flows, which along with
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its balance sheet strength, will enable a sustained exploration programme and provide the ability to
fund attractive acquisitions.
Any shares acquired by the Company pursuant to the buy-back will be immediately cancelled,
reducing the total number of shares on issue in the Company and proportionately increasing all
shareholders' interests in the Company and return on equity.