TANGIERS PETROLEUM LIMITED: Letter to Shareholders

20 December 2012 
                      TANGIERS PETROLEUM LIMITED                            
      A NEW YEAR IS ABOUT TO BEGIN AND TANGIERS IS POISED TO GROW           
Dear Shareholder, 
With the festive season now well upon us, I would like to take this opportunity
to outline the significant progress your Company has made towards its goal of
building a substantial oil and gas group and the next steps it plans to take
along that path. 
A little over 100 days have passed since Tangiers announced the Board
restructure in which I was appointed as Executive Chairman. This restructure
also saw the appointment of highly experienced geologist Max de Vietri as a
Non-executive Director, while Brent Villemarette continued as an Executive
Director. 
To this end, the new Board immediately set about raising capital and
negotiating "farm out" arrangements which have covered virtually all of
Tangier's financial obligations on its existing acreage while retaining
valuable exposure for the Company should upcoming exploration programs be
successful. 
In early September, your Company had commitments of over $70 million on its
exploration permits in Morocco and Australia, less than $1 million available to
spend and a market capitalisation of $28 million. Today, even at our current
relatively depressed share price of 32c, the market capitalisation is $42
million and on closure of the farm-out deals, the Company will have about $15
million in cash to contribute to new projects. 
As well as generating some valuable cash, I believe these farm-out deals, which
cover Tangier's exploration acreage in both Australia and Morocco, have
delivered excellent outcomes for the Company in both the short and long terms. 
The Moroccan farm-out brings in a valuable partner in Galp Energia. Galp has a
market capitalisation of ~$12 billion and operating experience in eight African
countries. It is a deepwater producer in Brazil and a fully integrated
petroleum company with interests in exploration, development, production,
refining, marketing and petrol stations. 
Galp will fund the commitments (up to $33 million) that Tangiers previously had
for the period up to August 2014 as well as refund our past costs of $7.5
million. The full carry on the well costs is comparable to other deals in
surrounding permits, but the level of refund of past costs far exceeds the
amounts agreed in these same deals. 
It is important to note that the well costs in our Tarfaya block will be
relatively low because of our ability to utilise a jack-up rig, typically
around half the cost of the floating rigs that will be required to drill in
some of the adjacent permits. Tangiers will retain a 25 per cent interest in
the Tarfaya offshore area following completion of the farm-in arrangements. 
In Australia, a Heads of Agreement has been signed with CWH Resources Ltd and
we are now working on completing the definitive agreement. CWH will fund the
first $35 million of exploration expenditure in our WA-442-P and NTP/81
permits. This should cover most of our commitment of 3D seismic acquisition and
two wells. Tangiers will retain a 27 per cent interest in the permits. 
CWH is an ASX-listed company with an extensive network in China, through which
CWH has arrangements to fund its exploration projects in Australia. CWH does
not intend to raise capital in Australia to fund the exploration programs but
will cover the costs through debt financing, some of which will come from the
$50 million it has recently secured for acquisition of resources projects in
the Northern Territory. 
CWH also has other sources of funding through its major shareholders, which
have a variety of businesses in China including building materials, chemical
industries, investment companies, gas companies, manufacturing, logistics
companies, petroleum stations and more. 
CWH has advised Tangiers that it has always been supported by these major
shareholders and the support is expected to continue into the future. CWH is
based in Chongqing, a major municipality in south-west China with a population
of ~30 million. 
With the farm-out agreements relieving Tangiers of most of its financial
obligations on its existing assets, the Company is now ideally placed to pursue
the next leg of its growth strategy. This will involve identifying "farm-in"
and acquisition opportunities in Africa to grow our portfolio of exploration
and production assets. 
This process is now underway, with the Board targeting onshore and shallow
water opportunities. These parameters recognise the Company's financial
resources, which realistically do not stretch to becoming involved in the deep
water exploration business that is predominantly a game for the deep pockets of
the petroleum majors. 
The Board has a preference for oil exploration and production opportunities,
though it remains open to involvement in the gas industry provided key criteria
such as gas prices and nearby infrastructure meet its requirements. 
I believe that the experience of the people within Tangiers, along with the
Company's ability to fund suitable farm-ins and acquisitions, will enable us to
capitalise on the opportunities in our chosen region of growth. 
I look forward to reporting to you in the New Year on the finalisation of the
farm-out agreements and progress on sourcing new assets for the Company. 
In the meantime, on behalf of the Tangiers Board, I wish you a merry Christmas
and a prosperous 2013. 
EVE HOWELL
Executive Chairman 
Tangiers Petroleum Limited
Level 2, 5 Ord Street
West Perth WA 6005, Australia
Ph: +61 8 9485 0990 
www.tangierspetroleum.com.au 
Contacts 
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 
END 
-0- Dec/20/2012 07:00 GMT
 
 
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