Taipan Resources Inc. Shareholders' Letter and Operational Update from CEO, Max Birley, Nairobi Kenya

Taipan Resources Inc. Shareholders' Letter and Operational Update from CEO, Max 
Birley, Nairobi Kenya 
NAIROBI, KENYA -- (Marketwired) -- 05/08/13 -- Taipan Resources Inc.
("Taipan" or the "Company") (TSX VENTURE:TPN) is pleased to provide
the shareholders' letter and operational update below from CEO Max
Birley, Nairobi Kenya. 
Taipan finds its own "string of pearls" on Block 2B 
Dear Fellow Shareholder, 
It has now been 5 months since I last wrote to you back in November
2012. At that time we had only been in control of the Kenyan assets
for 3 months. As we have recently completed the work program for the
Initial Exploration Period on Block 2B, I thought it was time to
update you on what has been occurring in Kenya from an exploration
point of view, and in particular what Taipan Resources has undertaken
operationally on our blocks.  
We have recently updated our corporate presentation on our website
www.taipanresources.com. It can be found under the Investors
Information tab. You may wish to refer to it in conjunction with this
letter as I try to explain in some detail why we believe that our
acreage is indeed a "pearl" of exploration acreage of Kenya. 
1.0 Regional Hydrocarbon Update 
Tertiary oil now discovered in 3 basins, Albertine, Lokichar and
The two Tullow Tertiary discoveries in Kenya now confirmed by
testing. Twiga has 5,200 bopd ("barrels of oil per day") potential. 
As you are aware, in March 2012 Tullow Oil and Africa Oil announced
that they had discovered oil in the Tertiary sandstones in the
Ngamia-1 well. When I last wrote, they were still drilling the South
Twiga exploration well. The South Twiga well was located on a
look-a-like structure to the north of the Ngamia well. Both wells are
located on what is referred to as the "string of pearls". This is a
series of prospects located on tread with each other associated with
the main basin bounding fault. Since then, both wells have been
tested and have flowed oil in commercial quantities. South Twiga
flowed at a cumulative rate of 2,812 bopd of 37 degrees API oil and
has potential, according to Tullow, of 5,200 bopd. Ngamia was
recently tested and from one zone has produced 281 bopd of 30 degrees
API oil. With five other upper zones still to be tested, these wells
already prove
 that Kenya has a commercial petroleum system. 
Figure 1 Shows the location of the recent discoveries and the oil
bearing Tertiary basins of Uganda, Kenya and now Ethiopia:
Two further onshore wells drilled by Tullow have good oil shows and
extend the trends into the Turkana Basin of Ethiopia and the Anza
The Sabisa exploration well, which is currently being drilled by
Tullow in Ethiopia, has reported oil in the Tertiary. This well
proves up the northward extension of the Tertiary petroleum system
into Ethiopia. This is a very significant well for Taipan as the
Turkana basin in Ethiopia is separate from the Lokichar Basin of
Kenya and the Albertine Basin of Uganda, and proves that conditions
exist in the three basins to produce oil. The distance between the
Sabisa and the Ngamia well is approximately 300 kilometers and from
the wells of the Albertine Basin approximately 500 kilometers. This
demonstrates that these Tertiary petroleum systems exist over
regional distances. This has proved to be a very positive sign for
the occurrence of oil in the other Tertiary basins in the region
particularly the Anza Basin. Tullow has reported oil in the Sabisa
well and it is currently being sidetracked due to drilling
Taipan's Block 2B is located at the southern end of the Tertiary Anza
Basin. The Anza has all the same play elements found in the other
three successful Tertiary basins. The Hothori well, which was drilled
in the western portion of Block 2B in 1989 proved 9,500 ft of
Tertiary section. Down dip from the well, there is 12,000 to 15,000
ft of Tertiary rocks adjacent to the main bounding fault in a similar
structural configuration to the Ngamia, Twiga and Sabisa discoveries. 
Figure 2 Shows the similarity between the structures on Block 2B
(left panel) and the South Twiga discovery (right panel):
I have enclosed above seismic lines from Twiga South and our block to
demonstrate that the same structural elements exist on Block 2B. In
the corporate presentation, we refer to the similarity of the
structures on Block 2B and Ngamia and Sabisa as well. 
I am also enclosing a comparison of equivalent maps in Figure 3 that
show the existence of a "string of pearls" of the same order of
magnitude present on Block 2B located against the main bounding
Now that oil has been discovered in the Albertine (Uganda), Lokichar
(Kenya) and Turkana (Ethiopia) Basins, the likelihood of finding oil
in the Tertiary of the Anza Basin has been significantly increased. 
Figure 3 Comparison of structures left Block 2B right Tullow Blocks:
The Paipai exploration well (Tullow/ AOC) was drilled in the north
western end of the Anza Basin where the Tertiary is thin and has
little potential, as it is not buried deeply enough. The well was
drilled on a large Cretaceous and Jurassic structural prospect. The
well encountered 180 ft of sand and reportedly had light oil shows
and wet gas shows in the Cretaceous. The Anza Basin is an extension
of the prolific oil producing Melut and Muglad basin of South Sudan.
The same Cretaceous rocks have been proved to extend at depth into
Block 2B, and we do have a series of deeper Cretaceous prospects and
leads that will be tested in due course. However, our focus is on the
Tertiary fault-bounded prospects discovered so far. The Paipai well
could not be tested because of the lack of suitable testing equipment
due to high pressures. It is believed that the well will be tested in
the future. 
Excellent Tertiary source rocks are most likely to be present on
Block 2B 
It is not enough just to have similar structures, if you are going to
find oil. We must also have similar oil-prone source and sealing
rocks in the basin. Taipan have now carried out some geochemical
studies of the region and has found good evidence that the source
rocks that are present in the Lokichar Basin that generated the oils
in the Ngamia and Twiga discoveries are of broadly the equivalent age
and type to source rocks found to the south of Block 2B. It is
thought from the geochemical modeling, that these same source
horizons will likely be present and mature for oil around the many
drillable structures adjacent to the main basin-bounding fault on
Block 2B. 
Figure 4 Seismic lines with the results of the 1D geochemical
modeling overlain to show that the prospective Miocene Tertiary
section is in the oil window on Block 2B:
2.0 Operational Update 
What has been achieved since assuming operatorship? "Taipan
undertakes 3 years' work in 8 months" 
Block 2B is owned by Taipan's wholly owned subsidiary, Lion Petroleum
Corp. The Block is 7,806 km2, which is equivalent to 1.9 million
acres. We are in the final few months of the Initial Exploration
Period of the Production Sharing Contract (PSC). This period ends on
the 1st June 2013 by which time we will make a 30% relinquishment of
the block. The work program and minimum financial expenditure for
this period included the acquisition of 400 kilometers of seismic
data and the acquisition of a block wide Ful
l Tensor Gradiometry
survey (FTG) for a cost of $6.5 million. The work and financial
commitments for this period have all been met or exceeded within a
very short period of time. 
The acquisition of 439 kilometers of 2D seismic data on Block 2B
commenced on the 13th of January and was completed on the 13th of
March 2013. The cost for the 560 fold data (highest fold data to be
acquired to date in Kenya) was $12,500 per kilometer and has set a
new benchmark for other companies to follow in terms of cost and data
quality. We are very proud that the survey was acquired without any
downtime due to local community issues or any recordable HSE
incidents. The whole dataset from the crew was fully processed to
pre-stack time migrations within 14 days of the last data point being
Figure 5 Pictures from the 2D seismic survey of a seismic vibrator
and up-hole drilling rig:
The 12,713 km "block wide" FTG survey was recorded by ArkeX Ltd.
during March and April. Similarly, the data has been processed and
interpretations are already ongoing. 
Based on the interpretation of the newly acquired data, the board of
Taipan has decided to execute the option to enter into the First
Additional Exploration Period and extend the PSC for a further 2
years commencing 2nd June 2013. There is a final option to extend the
PSC for a further 2 years into the "Second Additional Exploration
Period" commencing 2nd June 2015. We have begun early stage well
planning and design work, and expect to drill, dependent upon rig
availability, an exploration well on Block 2B in early 2014.  
Figure 6 FTG survey acquisition plan and processing results:
What is going to happen in the near future to add additional value to
your company? 
"Five wells to be drilled in blocks contiguous or close to Block 2B
within the next 9 months" 
The next 12-24 months will see several industry players drill blocks
in and around Kenya creating much interest and speculation. An
overview regional map of the future drilling is included in the
Corporate Presentation.   
Contiguous to Taipan's Block 2B, on Block 9 Africa Oil and Marathon
Oil plan to drill the Bahasi-1 (Q3 2013) and possibly the Sala-1
prospect, with Tertiary and Cretaceous targets. These are large
prospects with most likely gross oil prospective resources of 320 and
402 mmbbls respectively. 
Figure 7 Location of the Bahasi and Sala prospects on block 9 and the
prospects & leads on Block 2B directly on trend:
Based on wells, gravity, magnetic and seismic data we can see that
the Tertiary trends that exist in the Albertine, Lokichar and Turkana
Basins extend onto Block 9 and the potentially most-prospective part
of this Tertiary basin occurs in Block 2B.   
We believe that the "sweet spot" of the Anza Basin with its own
"string of pearls" is located on our block. It is denoted by the
purple outline color in Figure 8. 
Vanoil, which operates Block 3A and Block 3B contiguous to the south
of Block 2B, has a commitment to drill 2 exploration wells in 2013.
Drilling is due to commence on the first well in July this year, and
both wells should take 5 months to drill. Based on our understanding
of the blocks, the prospects are mainly Cretaceous in age as the
Tertiary is not deep enough on Block 3A and Block 3B to be mature for
oil generation. You can see from Figure 4, that the blue color that
indicates Tertiary sediments is replaced by the greens of the
Cretaceous sediments on Block 3A.  
NewAge will drill the 2,300m El Kuran appraisal well in June 2013.
The well, which is located in Ethiopia, is approximately 100 kms from
the north-eastern boundary of Block 1 in which Taipan has a 20%
interest. This well is expected to take 45 days to drill. The
Jurassic carbonate reef play has a prospective resource estimate of
1.3 billion barrels of oil. 
Afren also has a commitment to drill in Block 1 (north of Block 2B)
and the well will be spudded in 2014 at the latest.  
Figure 8 Gravity map of the Anza Basin:
Expected Increase in Block 2B estimate of Prospective Resources 
Sproule, in their (NI 51-101) report dated October 2012, certified
that there were 328 million barrels of unrisked prospective resources
on Block 2B. Based on the new seismic and FTG gravity data,
management is expecting this estimate to be upwardly revised. We
expect the new resource certification to be issued by July-August of
this year. 
Block 1 Summary 
Taipan has a 20% interest Block 1. Afren, the operator of Block 1,
completed the acquisition of 1,900 kms of seismic data with BGP in
early 2013. The data is being processed and interpreted prior to
selecting a drilling location.  
3.0 Commercial Update 
Farm-out of Block 2B 
In October last year, we commenced a farm-out process for Taipan's
100% interest in the wholly-owned Block 2B. As previously stated, we
plan to farm out up to 50% of our interest in the block. The aim is
to bring in an industry partner that will be expected to take an
active technical interest to the work, in addition to carrying our
costs through the exploration work program going forward. All we can
say at this time is that we are currently engaged in various levels
of discussion with a number of potential farm-in partners, and we
expect to announce a definitive farm-out agreement during Q2, 2013.  
$3.0 million private placement 
On the 31st of January Taipan announced that it was going to the
market to raise $3.0 million to fund existing operations. The raise
was subsequently oversubscribed and by late February we had secured
approximately $3.5 million. Not only did we broaden our shareholder
base, but we also attracted into Taipan some new institutional
investors. Taipan's management bought 21% of the financing. 
Catalysts for value creation for the remainder of the year 
As I have earlier discussed, we believe Block 2B to be highly
prospective acreage. The fact that oil in commercial quantities has
been discovered in the Albertine and Lokichar Tertiary Basins, and
that oil has also been discovered in the Turkana Basin, has
significantly increased the chances of a major oil strike in the
Tertiary part of the Anza Basin.  
As part of our journey to prove this, we are going to see the
following value adding activities occur in the near future. These

--  Entering into the First Additional Exploration phase of the PSC
    (additional 2 years) 
--  Re-certification and increase to Taipan's resource estimate on Block 2B 
--  Farm-out of Block 2B 
--  Drilling of 5 high impact exploration wells on acreage contiguous or
    close to Taipan's Blocks. 
--  Drilling of an exploration well on "an Ngamia, Twiga, Sabisa look-alike"
    prospect on Block 2B 

We will continue to keep you updated on our progress, and also invite
you to visit Taipan's website for news on developments relating to
the Company throughout East Africa.  
Finally, we wish to thank you for the confidence you have entrusted
in the Taipan Management Team and Board of Directors, and assure you
of our commitment to responsibly building sustainable shareholder
Maxwell Birley, Chief Executive Officer 
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.
Maxwell Birley
Chief Executive Officer
+254 705 643 745
Taipan Resources Inc.
Joel Dumaresq
(604) 336-3193
For Investor Relations Contact:
Kin Communications Inc.
(604) 684-6730 or 1-866-684-6730
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