17 January 2014 TANGIERS PETROLEUM LIMITED Quarterly Report for Period Ending 31 December 2013 The Directors of Tangiers Petroleum Limited ("Tangiers" or the "Company") are pleased to provide the following report on its activities during the quarter ended December 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 Company launched a recommended off-market takeover bid for Jacka Resources Limited ("Jacka"), an ASX listed, Africa focused oil and gas company with interests in Tunisia, Nigeria, Tanzania and Somaliland. Notification of the signature of the Joint Moroccan Ministerial Order approving the assignment of the 50% interest in the Tarfaya Offshore Block and operatorship to Galp Energia was received. Planning of the initial Tarfaya Offshore Block exploration well, TAO-1, continued. The Company terminated the farm-out agreement with CWH Resources Ltd ("CWH") in relation to the Bonaparte acreage in Australia as CWH was unable to meet the conditions precedent. As a consequence, the request for a further extension of time from the National Offshore Petroleum Titles Administrator (NOPTA) was refused and 30 days' notice was given to commence the process to cancel the permits. The notice period was to expire on 12 January 2014. The Company was advised in December by NOPTA that the NT/P83 exploration permit in the Arafura Sea had been cancelled Overview The key operational activities during the quarter were: * the site survey over the proposed TAO-1 location was completed; * Galp Energia continued to advance environmental approval and well planning for TAO-1; * Galp Energia began screening the market for potential rig sharing/sublet options and preparing the invitation to tender documents for the drilling rig. The key corporate activities for the quarter were: * launch of a recommended off-market, takeover offer for Jacka Resources Limited for which the Bidder's Statement is due for lodgement with ASIC and on the ASX announcement platform on 20 January 2014; * completion of the underwriting of the A$0.16 listed options, securing funding of A$7.1 million before costs. * the completion of an investor relations road show from 24 September to 17 October with presentations taking place in Perth, Sydney, Melbourne, Hong Kong and London. 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 of A$0.272 million (September 2013 A$0.065 million); * administration and other operating costs of A$1.214 million (September 2013 A$0.846 million); * the exercise of 39,656,922 listed options at A$0.16, netting the company A$5.974 million; and * a net cash inflow of A$4.508 million recorded by the company. At the end of the quarter, the Company had net cash reserves of A$6.089 million excluding the US$3 million bank guarantee in Morocco. The Moroccan Joint Ministerial Order has been received approving the assignment and transfer of operatorship of the Tarfaya Offshore Block to Galp Energia, so cash reserves will shortly be augmented by US$7.5 million of back costs and return of the US$3 million bank guarantee. New Ventures If the Jacka takeover bid is successful, the merged entity will possess a portfolio of highly prospective exploration, appraisal and development acreage in Morocco, Tunisia, Nigeria, Somaliland and Tanzania. The Company continues to review and evaluate selected new venture opportunities in offshore shallow water and onshore in various African countries. Tarfaya Offshore Block - Morocco (25%) 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, environmental studies were advanced, the TAO-1 well site survey was completed and detailed planning for the well continued. Galp Energia was assigned its 50% interest in the Block and became operator. Tangiers retains a 25% interest in the Tarfaya Offshore Block. The Assaka 3D seismic data covers the Trident, Assaka and TMA prospects, certified by 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 net (25% basis) prospective resource for the four Jurassic prospects in the Tarfaya block is 217 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. In October the Company terminated the Farm-Out Agreement with CWH Resources Ltd as the conditions precedent were not satisfied. A further extension of time was requested from NOPTA to allow the Company to seek another farminee. The extension was not granted and notification was received from NOPTA that the permits may be cancelled. NT/P83 Exploration Permit, Offshore Darwin, Arafura Sea (100% and Operator) The Company received notification that this permit was cancelled in December 2013. Hydrocarbons in Place Summary Detailed below are the estimated oil estimates for the Company's project interest. 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 25% 391 1,084 3,100 Galp Energia Total 1,564 4,335 12,399 391 1,084 3,100 Prospective Resources Prospective Resources Summary Detailed below are the estimated Prospective Resources delineated across the Company's project interest. 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 25% 39 217 1,240 unrisked Galp Energia Total 156 867 4,959 39 217 1,240 Prospective Resources 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 consents 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 Mr Ed Portman (Media and Investor Relations - United Kingdom) Tavistock Communications +44 20 7920 3150 END -0- Jan/17/2014 07:00 GMT
TANGIERS PETROLEUM LIMITED: Quarterly Report December 2013
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