Taipan Resources Inc. Shareholder's Letter and Operational Update
From CEO Maxwell Birley
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/12/12 -- Taipan
Resources Inc. ("Taipan" or the "Company") (TSX VENTURE:TPN) is
pleased to provide the shareholder's letter and operational update
below from CEO Max Birley.
Since closing Taipan's first major round of financing ($11.5 million)
and the amalgamation with Lion Petroleum in July, we have worked
steadily to move the company and its assets in Kenya forward. As the
fourth largest gross acreage holder in Kenya we have been quite busy.
Below, I enclose a brief summary of what has been happening in the
Kenyan oil industry and an update of our operational activities in
In order to facilitate the exploration and development of our two
Blocks in Kenya, I have moved my home and family to Nairobi. Relative
to other frontier markets in which I have lived, worked and
discovered hydrocarbons, Kenya is an easy and friendly place to
conduct business. It is also a very exciting time in the Kenyan oil
business with very high levels of both commercial and drilling
activity post the first major oil discovery in Kenya in March. Kenya
is now widely regarded in the industry as the "hottest" place for
onshore oil exploration.
Taipan Resources has also engaged two key senior Kenyan nationals to
provide the essential local experience and input to operational
decisions. This includes Mr Daniel Ngenoh, a geophysicist who was
previously the head of the Kenyan National Oil Company and Mr. Hari
Ndugu, who is now overseeing Community Relations for the upcoming
seismic survey on Block 2B. Both individuals are highly experienced
in Kenya and have previous experience with our Blocks. Mr. Daniel
Ngenoh has undertaken a significant amount of technical work on Block
1 and Block 2B, while Mr Hari Ndugu worked for many years with the
Ministry of Environment and has undertaken many site visits to the
Block 2B area.
As you are likely aware, in March Tullow Oil and Africa Oil announced
that they had discovered oil in the Tertiary sandstones in the
Ngamia-1 well. This well has created tremendous interest in Kenya
since the announcement. As a follow on, Tullow are currently drilling
a similar Tertiary exploration target to the north of the Ngamia well
named Twiga South-1. Although the well is not expected to reach its
total depth until later this month, Tullow distributed a press
release on the 31st October 2012 declaring that oil has been
encountered in the well. Clearly this will continue to generate much
interest and excitement as Tullow and its partner Africa Oil share
further results later this month on this promising new discovery.
The Tertiary oil discoveries that have been made by Tullow and Africa
Oil are highly relevant to the exploration efforts of Taipan, as we
have more than 3,150 metres of the same age and type of rocks
occurring on Block 2B where we hold a 100% interest.
Tullow also recently commenced the drilling of the Pai Pai
exploration well. The well will be drilled to reach total depth at
around 4,112 meters and is expected to test Cretaceous and Jurassic
While our primary objective on Block 2B is oil in the Tertiary, the
Pai Pai well is on-trend with additional Cretaceous and Jurassic
plays that also exist on Taipan's Block 2B. The results of the Pai
Pai well are expected towards the end of the year.
Contiguous to Taipan's Block 2B, on Block 9 Africa Oil and Marathon
Oil plan to drill the Kinyonga Prospect, with Tertiary and Cretaceous
targets, in the second half of 2013. This is a large prospect with a
Gross Oil Prospective Resources (unrisked) Best Estimate of 320
mmbbls. Based on gravity, magnetic, and seismic data we can see that
the Tertiary trend on Block 9 extends into Block 2B and we believe
that the "sweet spot" of the basin is located on our block.
TAIPAN RESOURCES OPERATIONAL UPDATE
Block 2B is currently 100% owned by Taipan's wholly owned subsidiary
Lion Petroleum. Block 2B is 7,800 km2, which is equivalent to 1.9
million acres. We are currently in the Initial Exploration Period of
the Production Sharing Contract (PSC) which ends on the 1st June
2013. We have the option to extend the exploration term of the PSC
for a further 2 periods of 2 years (total of 4 years). The work
program and expenditure up until the 1st June 2013 includes the
acquisition of 400 kilometers of seismic data and the acquisition of
a block wide Full Tensor Gradiometry survey (FTG).
We expect to begin the acquisition of 400 kilometers of seismic data
for Block 2B in December of this year and early in 2013 we will also
acquire the FTG survey. The total expenditure for the work program up
to the 1st June 2103 will be $6.5 million. Concurrent with the
interpretation of the seismic and FTG data, we expect to begin our
well planning and design work and expect to drill an exploration well
on Block 2B in the second half of 2013.
We have also now completed an in-depth technical review of Block 2B
which has exceeded our original expectations. Management believes
that the resource estimates previously prepared by independent
petroleum consultants Sproule for Block 2B are conservative. We
expect to provide an update to our resource estimates in the first
half of next year after the seismic and gravity work has been
integrated. It should also be noted that the current resource
estimates for Block 2B were prepared prior to the oil discoveries
that have occurred this year in Kenya.
During the month of October we arranged a 20 day site visit to Block
2B to meet senior government officials and tribal elders to begin the
process of pre-survey community awareness. Two public meetings were
held to explain the work that will be undertaken and to take onboard
the concerns of the local community. Further sensitization meetings
will take place before the seismic survey commences.
TAIPAN RESOURCES COMMERCIAL UPDATE
In September we commenced a farmout process for Taipan's wholly-owned
Block 2B. The aim is to bring in a partner that will be expected to
add technical input to the work on the block in addition to carrying
our costs through the exploration work program. We are currently
engaged in various levels of discussion with a number of potential
farm-in partners. We plan to farm out up to 50% of our interest in
the block and expect the farm-out process to be concluded by the end
of this year.
We have also been encouraged by the high level of recent commercial
activity in both Kenya and the surrounding region, and in particular
by the farm-in on Block 9 which is contiguous to Taipan's Block 2B.
Commercial activity has included the Marathon farm-in into Africa
Oil's interests in Blocks 9 (50%) and 12A (15%) for $57 million that
closed in October, and the purchase from Agriterra also by Marathon
of its 20% interest in the South Omo Block in Ethiopia for a total of
$50 million also in October. In addition, in September Bowleven
farmed into Adamantines' Block 11B to acquire a 50% interest for
funding the next $10 million of seismic work. All of this activity
demonstrates the sizable interest in the Kenyan hydrocarbon arena.
Investor communication is very important to the Taipan Board and
Management Team. In order to educate investors of the attractiveness
of Taipan's acreage position and to clarify the upcoming work program
and expected farm-out, throughout October we held more than 50
investor and analyst meetings across the UK, Ireland, Canada and the
We will continue to keep you updated on our progress and also suggest
you visit Taipan's recently refurbished website
(www.taipanresources.com) for news on developments with the Company
and throughout east Africa.
Finally, we wish to thank you for the confidence you have entrusted
in the Taipan Board and Management Team, and assure you of our
commitment to building sustainable shareholder value.
Maxwell Birley, Chief Executive Officer
About Taipan Resources Inc.
Taipan Resources Inc. (TSX VENTURE:TPN) is an independent Africa oil
and gas exploration company with interests in 9.7 million gross oil
and gas exploration acres (39,588 km2) in Block 1 and Block 2B
onshore Kenya. Through its wholly owned subsidiary Lion Petroleum
Corp., Taipan currently holds a 100% working interest in Block 2B
(1.9 million acres / 7,807 km2) and a 20% working interest in Block 1
(7.8 million acres gross / 31,781 km2) which is operated by Afren
plc. Taipan's total mean net unrisked prospective resources on the
Blocks are estimated to be 530 million barrels of oil equivalent.
Taipan is traded on the TSX Venture Exchange with the symbol TPN.
The statements contained in this release that are not historical
facts are forward-looking statements, which involve risks and
uncertainties that could cause actual results to differ materially
from the targeted results. The Company relies upon litigation
protection for forward looking statements.
This news release contains forward-looking statements relating to the
timing and completion of a farm out for Block 2B, the timing and
completion of exploration programs on Block 1 and Block 2B, the
future operations of Taipan and other statements that are not
historical facts. Forward-looking statements are often identified by
terms such as "will", "may", "should", "anticipate", "expects" and
similar expressions. All statements other than statements of
historical fact, included in this release, including, without
limitation, statements regarding the completion of a farm out for
Block 2B and the completion of exploration programs on Block 1 and
Block 2B, are forward-looking statements that involve risks and
uncertainties. There can be no assurance that such statements will
prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from Taipan's expectations are risks detailed from time to
time in the filings made by Taipan with securities regulations.
The reader is cautioned that assumptions used in the preparation of
any forward-looking information may prove to be incorrect. Events or
circumstances may cause actual results to differ materially from
those predicted, as a result of numerous known and unknown risks,
uncertainties, and other factors, many of which are beyond the
control of Taipan. As a result, Taipan cannot guarantee that any
forward-looking statement will materialize and the reader is
cautioned not to place undue reliance on any forward-looking
information. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect and
actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement. The forward-looking
statements contained in this news release are made as of the date of
this news release and Taipan will only update or revise publicly any
of the included forward-looking statements as expressly required by
Canadian securities law.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Taipan Resources Inc.
(604) 336 3193
For Investor Relations Contact:
Kin Communications Inc.
604-684-6730 or 1-866-684-6730
Press spacebar to pause and continue. Press esc to stop.