TANGIERS PETROLEUM LIMITED: Recommended Takeover Bid by Tangiers for Jacka 5 December 2013 RECOMMENDED TAKEOVER OFFER BY TANGIERS PETROLEUM FOR JACKA RESOURCES Highlights: * Tangiers Petroleum to acquire Jacka Resources via an off-market takeover bid * Offer ratio equal to 0.468 Tangiers shares for every Jacka share held * Tangiers Offer values Jacka shares at $0.112 based on Tangiers last closing price of $0.24 per share on 29 November 2013, being a 56% headline premium to Jacka's last closing price ($0.072) and 53% premium based on the Jacka and Tangiers 1 month VWAPs * Jacka Board unanimously recommends shareholders accept the Tangiers Offer in the absence of a superior proposal * Based on the closing share price of Tangiers on ASX on 29 November 2013, the Offervalues Jacka at approximately $37m on an undiluted basis * Upon completion of the transaction, existing Tangiers shareholders and Jacka shareholders will own approximately 53% and 47%, respectively, of the issued ordinary shares of the combined entity (on an undiluted basis) * Creation of a premier small to mid-cap African focused upstream oil and gas company, with pro-forma cash of $8m with a further US$22m expected to flow in from executed farm-in agreements relating to Tangiers' Tarfaya Project and Jacka's Odewayne Project * Eve Howell to remain as Chairman of Tangiers, with Bob Cassie to become Managing Director of Tangiers upon completion * Tangiers to provide Jacka with a $2.5m standby loan facility to assist Jacka's funding in Q1 2014 * Bidder's and Target's Statements expected to be lodged by mid January 2014 Tangiers Petroleum Limited ("Tangiers") (ASX:TPT, AIM: TPET) and Jacka Resources Limited ("Jacka") (ASX:JKA) are pleased to announce that they have entered into a Bid Implementation Agreement ("BIA") in respect of an off-market takeover offer to be made by Tangiers for all of the issued ordinary shares in Jacka ("Offer"). Combining the two companies will deliver a strong portfolio of highly prospective exploration, appraisal and development assets in Africa, including two high impact wells planned for 2014: the TAO-1 exploration well in the Tarfaya block, Morocco and the drilling and testing of Hammamet West-3 sidetrack 2 in Tunisia. The combined entity will also have exposure to a promising near-term offshore Nigerian development project in Aje (OML 113) where the joint venture plans to complete the field development plan by early 2014. Aje is adjacent to the recent Ogo discovery, where the operator, Afren plc, recently announced upgraded recoverable resources of 774 million barrels of oil equivalent and identified a new, deeper hydrocarbon-bearing zone. The combined entity will also benefit from significant positions in early stage acreage in Somaliland and Tanzania, both of which have attracted strong interest from industry participants. Key Offer Terms Under the takeover bid, Tangiers is offering 0.468 Tangiers shares for every Jacka share held. The Offer ratio implies a value of $0.112 per Jacka share based on the closing price of Tangiers shares on 29 November 2013, and represents: * a 56% premium to Jacka's last closing price $0.072 based on Tangiers' last closing price of $0.24 on 29 November 2013 * a 53% premium to Jacka's 1 month VWAP of $0.0763, based on Tangiers' 1 month VWAP of $0.2491 (to 29 November 2013) Upon successful completion of the transaction, existing Tangiers shareholders and Jacka shareholders will own approximately 53% and 47%, respectively (on an undiluted basis), of the issued ordinary shares of the combined entity. Strong African Focus A combination of Tangiers and Jacka offers a compelling opportunity for investors seeking exposure to a growth focused ASX and AIM-listed small to mid-cap oil and gas company with multiple projects from high impact exploration to near-term appraisal and development opportunities: * creation of a premier small to mid-cap African focused upstream oil and gas company with an indicative market cap of c. A$80m; * accelerated growth through a combined and diversified portfolio of frontier exploration (e.g Morocco, Somaliland and Tanzania) together with near term appraisal and development opportunities (Tunisia and Nigeria); * funding in place and/or carried for multiple high impact drilling events throughout 2014 (HW-3, Aje-5 and TAO-1). Morocco will see an active regional drilling program next year with up to 10 wells to be drilled along the Atlantic margin by the industry; * combined board and management with extensive E&P experience, including African, drawn from Tangiers and Jacka nominees (e.g. Woodside Energy, Apache Energy and Hardman Resources); * strong financial position with pro forma cash of approximately $8m and a further US$22m expected to flow in from executed farm-in agreements relating to Tangiers' Tarfaya Project and Jacka's Odewayne Project; * carried for work programs/drilling at Tarfaya and Odewayne; and * creation of a stronger and better positioned company with the financial strength to grow via further M&A. Further details on the assets of Jacka and Tangiers are set out in a presentation available on Tangiers' website, and full detailed information on the proposed takeover will be included in the bidders statement. Board and Management Upon completion, the Board of Directors of the combined entity will initially comprise three nominees from Tangiers and two nominees from Jacka. Tangiers' nominees are Eve Howell (Executive Chairman), Brent Villemarette and Max de Vietri. Jacka's nominees are Bob Cassie (Managing Director) and Scott Spencer. Following completion there will be a three month period during which Eve Howell will transition to Non Executive Chairman. Max de Vietri is also likely to move off the Board during this period, to be replaced by a new Non Executive Director to be nominated by Tangiers. Jacka Board of Directors' Recommendation The Board of Directors of Jacka unanimously recommends to Jacka shareholders that they accept the Offer, in the absence of a superior proposal. Each Jacka director intends to accept the Offer with respect to all shares owned or controlled by them, in the absence of a superior proposal. Commenting on the transaction Scott Spencer, Chairman of Jacka said: "This is a compelling offer for Jacka shareholders, and this transaction will provide a strong platform to pursue the company-transforming exploration opportunities within the portfolio of the merged entity, both in terms of balance sheet and board. The board and management of Jacka are very focused on the opportunity to create significant value through appraisal and development of the Hammamet West oilfield offshore Tunisia. With this transaction shareholders will also gain exposure to a second near-term opportunity through Tangiers' Tarfaya prospect, scheduled to be drilled in 2014 offshore Morocco, which is emerging as a leading frontier oil province in Africa". Eve Howell, Executive Chairman of Tangiers commented: "This transaction is consistent with the strategy adopted by the board and management of Tangiers over the past year where efforts have been focused on growth in Africa and building a portfolio which balances low risk, moderate reward development and production opportunities with higher risk, large exploration potential. Jacka's portfolio provides diversity to Tangiers' shareholders with exposure to highly prospective exploration drilling as well as appraisal and development activity in a number of countries over the next two years." Offer Details Pursuant to the BIA entered into between Tangiers and Jacka, it is proposed that Tangiers will acquire all the issued ordinary shares of Jacka by way of an off market takeover offer. Under the Offer, accepting Jacka shareholders will receive 0.468 Tangiers ordinary fully paid shares for each existing Jacka ordinary share they hold. Tangiers has also undertaken to make an offer to acquire existing Jacka options on issue in return for issuing new Tangiers options with the quantum and exercise price to be adjusted consistent with the offer ratio for Jacka shares. Tangiers shareholders and option holders will continue to hold their existing Tangiers ordinary shares and options. The Offer is subject to a number of conditions, including a 90% minimum acceptance, no material adverse change and no prescribed occurrences. The conditions are set out in full in the BIA. The BIA contains customary deal protection mechanisms, including a no shop provision, matching rights in the event of a competing proposal and a $300,000 reciprocal break fee payable in limited circumstances. As the Offer consideration is solely comprised of Tangiers shares, Jacka has the right to terminate the BIA if there is a material adverse change relating to Tangiers (including the requisite government approvals for the Galp Energia farm-out of Tarfaya not being received by 1 February 2014). Further details of Jacka's termination rights are set out in the BIA. The BIA outlining the full terms and conditions of the Tangiers Offer is available on Tangiers' website, www.tangierspetroleum.com. Interim Funding Tangiers has agreed to provide Jacka with a $2.5m loan facility to assist Jacka's funding in Q1 2014. This facility with Tangiers replaces the previously announced convertible facility that Jacka was seeking to put in place. Interest on the loan facility is payable at 12% p.a. on amounts drawn. The loan is to be repaid in full by no later than 1 December 2014, although Jacka is under an accelerated repayment obligation if: (a) a majority of the Jacka board recommends a competing proposal at any time during the term of the loan facility, in which case the loan must be repaid in full within 3 months of recommending that competing proposal; or (b) the BIA is terminated prior to Tangiers making its takeover bid for Jacka, in which case the facility must be repaid within 6 months of termination of the BIA. Tangiers will have a contractual commitment over the future proceeds from the Sterling farmout in respect to Jacka's Odewayne Project, up to the amount drawn under the loan facility. Indicative Timetable Announcement 5 December 2013 Bidder's Statement and Target's Statement expected to be lodged 20 January 2014 Offer period commences 4 February 2014 Financial Advisors and Legal Counsel Tangiers has appointed Foster Stockbroking Pty Ltd as financial advisor and Herbert Smith Freehills as legal counsel. Jacka has appointed Miro Advisors as financial advisor and Corrs Chambers Westgarth as legal counsel. Conference Call and Presentation A conference call hosted by Eve Howell, Executive Chairman of Tangiers, has been scheduled for 2pm AEST (11am WST) Thursday 5 December to present the transaction and highlights of the combined entity. Interested parties are invited to dial into 1 800 558 698 or 1 800 809 971 (freecall in Australia). When dialling in callers will be asked for the meeting ID, 728988. All callers will be asked to provide their full name and association. About Tangiers Petroleum Tangiers Petroleum Ltd is a junior O&G exploration company listed on the ASX and AIM. The company's key project is Tarfaya, offshore Morocco. TPT retains a 25% equity interest in the Block and is carried for the first well planned to be drilled H1 CY14 following completion of a farm-out to Galp Energia (50% and operator). About Jacka Resources Jacka Resources Limited is an ASX listed (ASX: JKA) oil and gas exploration and development company with a focus on Africa. Jacka's key assets are located in Tunisia, Nigeria, Tanzania and Somaliland. Key Contacts TANGIERS PETROLEUM LTD JACKA RESOURCES LTD Eve Howell, Executive Chairman Bob Cassie, Managing Director Tangiers Petroleum Ltd Jacka Resources Ltd +61 8 9485 0990 +61 419 945 232 firstname.lastname@example.org email@example.com Mark Hinsley John Raston Foster Stockbroking Miro Advisors +61 2 9993 8711 +61 407 921 578 firstname.lastname@example.org email@example.com Nominated Advisor AIM RFC Ambrian Limited Stuart Laing +61 8 9480 2506 Paul Armstrong Colin Hay Read Corporate Professional Public Relations +61 8 9388 1474 +61 8 9388 0944 firstname.lastname@example.org email@example.com Peel Hunt LLP (AIM Broker) Mr Richard Crichton Mr Andy Crossley + 44 20 7418 8900 Mr Ed Portman (Media and Investor Relations - United Kingdom) Tavistock Communications +44 20 7920 3150 END -0- Dec/05/2013 07:47 GMT
TANGIERS PETROLEUM LIMITED: Recommended Takeover Bid by Tangiers for Jacka
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