TANGIERS PETROLEUM LIMITED: Tangiers Enters Farm-out Agreement for Morocco

TANGIERS PETROLEUM LIMITED: Tangiers Enters Farm-out Agreement for Morocco
3 December 2012 
                      TANGIERS PETROLEUM LIMITED                            

        Tangiers enters into a farm-out agreement for offshore Morocco         

Deal results in Tangiers entering a partnership with an experienced operator in

Tangiers Petroleum Limited (ASX:TPT, AIM:TPET, "Tangiers" or "the Company")
announces it has entered into a farm-out agreement with the Portuguese company,
Galp Energia (Galp), for the assignment of a 50% interest in the Tarfaya
Offshore area, comprising eight exploration permits, known as Tarfaya Offshore
I to VIII, located on the Atlantic Margin, offshore Morocco. Galp Energia will
become the operator of the Tarfaya Offshore area, a role that until now has
been fulfilled by Tangiers. Tangiers will hold a 25% interest, and the Office
National des Hydrocarbures et des Mines, (ONHYM), the Moroccan state company,
will maintain its 25% interest in the Tarfaya Offshore area. The transaction is
subject to the required regulatory approvals, namely the approval of the
Moroccan government.

The Tarfaya Offshore area is predominantly in water depths of less than 200
metres and covers an area of 11,281 square kilometres. The shallow water means
well costs in the Tarfaya area are expected to be substantially lower than most
other offshore areas of Morocco as a jack-up rig can be utilised as opposed to
a semi-submersible rig or drillship in the deeper water areas.

Under the terms of this agreement, Galp Energia will expend US$41 million which
will include up to US$7.5 million in back costs reimbursable to Tangiers and
the cost of an exploration well, limited by a cap, to be drilled within the
Tarfaya Offshore area. This will fulfil the work program commitment for the
First Extension Period for the Tarfaya Offshore block.

The Tarfaya Offshore permits are located in an under-explored area within a
proven petroleum system, containing multiple prospects and leads within
Jurassic and Cretaceous sediments, as well as emerging potential within the
Tertiary and Triassic formations. The already identified Jurassic prospects in
the Tarfaya Offshore area include Assaka, Trident, Tarfaya Marin-A (TMA) and La

It is expected that the well will be drilled before mid-2014 and will have the
Trident prospect as its primary target as well as being able to penetrate the
Assaka and TMA prospects.

According to Galp Energia's internal estimate of volumes and risk, the primary
target, the Trident prospect, is an oil prone prospect and has estimated gross
prospective resources of 450 million barrels (mean unrisked estimate) with a
probability of success of 21%. The prospective resources (mean unrisked)
attributable to Tangiers (after farm-out) are 112 million barrels. This
estimate is similar to the independently assessed estimated prospective
resources for the Trident Prospect, as previously reported by Tangiers, of:

Prospective Resources (Unrisked)  Low (P90)  Best (P50)  High (p10)  
                                                                     of Success 

Gross (100% basis)                    85         423        2109         14%    

Net Attributable to Tangiers (25%)    21         106         527         14%    

It should be highlighted that further resource upside potential remains in the
Assaka, TMA and La Dam prospects. 
Galp Energia is an integrated energy player with diversified activities across
the world. Although Galp Energia's refining and marketing of oil products
activities are centered in Portugal and Spain, its exploration and production
activities have their core in the South Atlantic region, which includes
Brazil's Santos pre-salt basin and offshore Angola, as well as in offshore
Mozambique, in the Rovuma basin, where major natural gas reservoirs were
recently discovered. Galp Energia is currently active in 14 countries:
Portugal, Spain, Brazil, Angola, Venezuela, Mozambique, Cape Verde,
Guinea-Bissau, Swaziland, Gambia, East Timor, Uruguay, Equatorial Guinea and
Tangiers Executive Chairman Eve Howell said the farm-out would enable the
Company to be fully carried through the two year, First Extension Period and
retain significant exposure to the exploration and development upside of the
Tarfaya Offshore area. At the same time the recovery of past costs will provide
funds to continue pursuing its African growth strategy. 
"We are excited about entering into a joint venture with a substantial company
like Galp which already works in 8 African countries and are looking forward to
having their experience in operating the drilling of our first Moroccan well",
Ms Howell said. 
Executive Chairman
Tangiers Petroleum Limited 
Level 2, 5 Ord Street
West Perth WA 6005, Australia
Ph: +61 8 9485 0990 
RFC Ambrian Limited (Nominated Adviser)
Mr Stuart Laing
+ 61 8 9480 2506 
Old Park Lane Capital PLC (Joint AIM Broker)
Mr Michael Parnes
Mr Luca Tenuta
+ 44 20 7493 8188 
Shore Capital Stockbrokers Ltd (Joint AIM Broker)
Mr Jerry Keen
Mr Bidhi Bhoma
+ 44 20 7408 4090 
Mr Ed Portman (Media and Investor Relations - United Kingdom)
Tavistock Communications
+ 44 20 7920 3150 
Qualified Person 
The information in this announcement has been reviewed by Mr Brent Villemarette
who is an Executive Director of Tangiers and Mrs Margaret Hildick-Pytte who is
the Director of Exploration for Tangiers. Mr Villemarette is a petroleum
engineer with over 30 years of experience and is a member of the Society of
Petroleum Engineers. Mrs Hildick-Pytte holds a BSc and MSc in Geology and is
undertaking an MSc in Petroleum Engineering. She is a member of SPE, AAPG, the
SPWLA and PESA. Mrs Hildick-Pytte and Mr Villemarette and Mrs Hildick-Pytte
have reviewed this announcement and consent to its release. Terminology and
standards adopted by the Society of Petroleum Engineers ("SPE") "Petroleum
Resources Management System" have been applied in producing this document. 
"Prospective Resources" are those quantities of oil or gas which are estimated,
on a given date, to be potentially recoverable from undiscovered accumulations. 
-0- Dec/03/2012 07:00 GMT
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