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TANGIERS PETROLEUM LIMITED: Quarterly Report September 2013


28 October 2013

TANGIERS PETROLEUM LIMITED

Quarterly Report for Period Ending 30 September 2013

The Directors of Tangiers Petroleum Limited ("Company") are pleased to provide the following report on its activities during the quarter ended 30 September 2013. A copy of the full quarterly report, including the diagrams referred to in the text and the Appendix 5B (Quarterly Cash Flow Report), is available on the Company's website at www.tangierspetroleum.com

Highlights

The joint Moroccan ministerial order approving the assignment of the 50% interest in the Tarfaya Offshore Block and operatorship to Galp Energia is expected soon.

Planning of the initial Tarfaya Offshore Block exploration well, TAO-1, continued with a view to spudding the well in the first half of 2014.

During the quarter, the Company and CWH Resources Ltd ("CWH") continued to work towards satisfying the conditions precedent under the Farmout Agreement between the Company and CWH for Australian exploration permits WA-442-P and NT/P81. The conditions precedent were due for completion by 30 September 2013. As this deadline was not met, the Company announced that it had terminated the Farm-out Agreement on 8 October to allow it to seek another farminee and submit an application for an extension to the time needed to complete the minimum work program from the National Offshore Petroleum Titles Administrator. Subsequently, the Company submitted an application for a suspension for WA-442-P. The Company received a response on 22 October restating the request to provide a copy of the contract for a seismic vessel.

The Company also continued to focus its efforts on expanding its position in Africa with multiple opportunities presently being evaluated.


                                   Overview                                    

The key operational activities during the quarter were:

  * planning for drilling the first exploration well in Morocco with the draft
    basis of well design for the proposed exploration well (TAO-1) completed
    and well services contract awarded. Galp continued to move forward with
    environmental approvals and well planning for TAO-1 with a view to spudding
    the well in the first half of 2014.
      * calling for and evaluating tenders for the seismic survey vessel to be used
    in exploration permits WA-442-P and NT/P81. The Company provided assistance
    to CWH with the selection process. However, CWH did not reach a decision on
    the award of the seismic vessel contract within the timeframe needed to
    meet the government's work commitment requirements.
    The key corporate activities for the quarter were:

  * ensuring that the farm-out process with Galp remains on target as it is
    anticipated that the remaining conditions precedent will be closed out in
    the fourth quarter of this year.
      * the commencement of an intensive investor relations road show from 24
    September to 17 October with presentations taking place in Perth, Sydney,
    Melbourne, Hong Kong and London.

Of note, the Company announced that it had signed an underwriting agreement with Foster Stockbroking Pty Ltd on 10 October, to underwrite the $0.16 listed options expiring on 31 October 2013, securing funding of A$7.1 million before costs.


                                   Financial                                   

The ASX Appendix 5B attached to this report contains the Company's cash flow
statement for the quarter. The significant elements for the period were:

  * exploration and evaluation expenditure reduced to A$0.065 million (June
    2013 A$0.168 million);
      * administration and other operating costs of A$0.846 million (June 2013
    A$0.843 million);
      * the exercise of 4,480,222 listed options at $0.16, netting the company
    $0.717 million; and
      * the company recorded a net cash outflow of A$0.125 million.

At the end of the quarter, the Company had net cash reserves of A$1.62million excluding the US$3 million bank guarantee in Morocco.

On satisfaction of the remaining conditions precedent for the Galp Farm-out Agreement which relate to approvals from the Moroccan government, cash reserves will be augmented by US$7.5 million of back costs and return of the US$3 million bank guarantee.

New Ventures

The Company's ongoing strategy is to review and acquire new venture opportunities in Africa to create a diversified and balanced portfolio.

During the last quarter, the Company evaluated multiple selected new venture opportunities in various African countries. The focus continues to be on farm-in opportunities both onshore and in shallow offshore waters in a number of prospective basins. Potential corporate deals are also being considered.


              Tarfaya Offshore Block - Morocco (75% and Operator)              

The Tarfaya Offshore Block (Figure 2), Morocco comprises eight contiguous
permits covering an area of 11,281 sq km. The Tarfaya Block is situated
approximately 600 km southwest of Morocco's capital, Rabat, inboard of the
Canary Islands on the Atlantic Margin. The Block contains multiple prospects
and leads within Jurassic sediments as well as potential within the Tertiary,
Cretaceous and Triassic Formations.

During the quarter, the Joint Working Group established between the Company and
Galp continued its work on the transition plan whereby Galp will assume
operatorship. The Joint Working Group was designed to ensure that operations
run smoothly with minimal delays in regard to the Tarfaya Work Program.

The following work was undertaken by the Joint Working Group:

  * continued geophysical interpretation of the Assaka 3D seismic survey
    including maturation of the well location to test the Trident structure in
    an optimal location;
      * further refinement of the preliminary basis of well design for the first
    exploration well; and
      * the award of the well services contract.

The Assaka 3D seismic data covers the Trident, Assaka and TMA prospects, certified by ISIS Petroleum Consultants (ISIS) and Netherland, Sewell & Associates, Inc (NSAI). The La Dam prospect in the south of the Tarfaya Block is covered by a 580 sq km 3D seismic survey acquired in 2006 and reprocessed in 2011 by the Company. The combined total best estimate gross unrisked original oil-in-place for the four Jurassic prospects in the Tarfaya block is 4,335 million barrels.

WA-442-P (Turtle) and NT/P81 (Barnett) (90% and Operator)

These two contiguous exploration permits encompass 3,900 sq km and are located approximately 20 km offshore in the Commonwealth waters off the coasts of Western Australia and Northern Territory, approximately 320 km southwest of Darwin (Figure 3). The permits are located in shallow water (less than 60m) with extensive 2D and modest 3D seismic coverage.

During the quarter, the joint venture partners and CWH continued to work towards satisfying the conditions precedent under the Farmout Agreement between the Company and CWH for Australian exploration permits WA-442-P and NT/P81. This included the planning of the acquisition of 3D seismic data across the two contiguous permits, specifically the calling for and evaluation of tenders for the seismic vessel which were submitted by 13 September 2013. The conditions precedent were due for completion by 30 September 2013. As this deadline was not met, the Company announced that it had terminated the Farm-out Agreement on 8 October to allow it to seek another farminee and submit an application for an extension to the time needed to complete the minimum work program from the National Offshore Petroleum Titles Administrator. Subsequently, the Company submitted an application for a suspension for WA-442-P. The Company received a response on 22 October restating the request to provide a copy of the contract for a seismic vessel.

NT/P83 Exploration Permit, Offshore Darwin, Arafura Sea (100% and Operator)

Following extensive assessment, the Company has decided to surrender this permit and an application for surrender has been submitted to NOPTA.


    Hydrocarbons in Place Summary

Detailed below are the estimated oil and gas-in-place estimates for the
Company's portfolio of project interests.
                    Gross (100%)             Tangiers         Net Attributable

Interest

Project Low Best/ High Low Best/ High

Operator

Mean Mean Oil-in-Place Estimates (unrisked) (All figures in millions of barrels)

Morocco 1,564 4,335 12,399 75% 1,173 3,521 9,299

Tangiers

Milligans Fan 118 683 1,489 90% 106 615 1,340

Tangiers Leads, Australia

Total 1,682 5,018 13,888 1,279 4,136 10,639 Prospective Resources

Gas-in-Place Estimates (unrisked) (all figures in trillions of cubic feet)

Nova Prospect, 0.375 6.930 15.704 90% 0.338 6.24 14.134

Tangiers Australia

Prospective Resources Summary

Detailed below are the estimated Prospective Resources delineated across the Company's portfolio of project interests.

Gross (100%) Tangiers Net Attributable Risk

Interest Factor Project Low Best/ High Low Best/ High

Operator

Mean Mean Prospective Oil Resources (unrisked) (All figures in millions of barrels)

Morocco 156 867 4,959 75% 117 650 3,720 unrisked

Tangiers

Milligans Fan 35 218 505 90% 32 196 455 unrisked

Tangiers Leads, Australia

Total 191 1,085 5,464 149 846 4,175 Prospective Resources

Prospective Gas Resources (unrisked) (all figures in trillions of cubic feet)

Nova Prospect, 0.17 3.46 7.83 90% 0.15 3.11 7.04 unrisked


     Tangiers
                               
                              Qualified Person                                

The information in this announcement was produced by Mr Brent Villemarette who
is an Executive Director of Tangiers. Mr Villemarette is a petroleum engineer
with over 30 years of experience and is a member of the Society of Petroleum
Engineers. Mr Villemarette has 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.

Under these standards:

"Undiscovered Oil Initially in Place" is that quantity of oil which is
estimated, on a given date, to be contained in accumulations yet to be
discovered. The estimated potentially recoverable portion of Undiscovered Oil
Initially in Place is classified as Prospective Resources, as defined below;
and

"Prospective Resources" are those quantities of oil or gas which are estimated,
on a given date, to be potentially recoverable from undiscovered accumulations.


ROBERT DALTON
Joint Company Secretary

Tangiers Petroleum Limited
Level 2, 5 Ord Street
West Perth WA 6005, Australia
Ph: + 61 8 9485 0990 
www.tangierspetroleum.com


Contacts

RFC Ambrian Limited (Nominated Adviser)
Mr Stuart Laing
+61 8 9480 2506

Peel Hunt LLP (Joint AIM Broker)
Mr Richard Crichton
Mr Andy Crossley
+ 44 20 7418 8900

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- Oct/28/2013 07:00 GMT

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