88 Energy Regulatory News (88E)

20 January 2014 TANGIERS PETROLEUM LIMITED Recommended Takeover Offer by Tangiers for Jacka The Directors of Tangiers Petroleum Limited ("Tangiers" or the "Company")advise that the Bidder's Statement and Target Statement ("Statements") havebeen lodged with ASIC and released to ASX. A copy of the full Statements,including the diagrams referred to in the text is available on the Company'swebsite at www.tangierspetroleum.com Set out below is the key information presented in the Statements. Key Offer Dates Date of Bidder's Statement - 20 January 2014 Date of Offers - 4 February 2014 Offer closes (unless extended or withdrawn - 7.00pm (Sydney time) on 18 March2014 Summary of the Offers Terms What Tangiers is Tangiers is offering to buy all Jacka Shares, including Jackaoffering to buy Shares that are issued during the Offer Period whether due to the conversion of Jacka Listed Options or otherwise, on the terms set out in this Bidder's Statement. Tangiers is also offering to buy all Jacka Listed Options. You may only accept the Share Offer in respect of all the Jacka Shares held by you. You may only accept the Option Offer in respect of all the Jacka Listed Options held by you. What you will If you accept the Share Offer, subject to the satisfaction orreceive if you waiver of the conditions to the Share Offer, for every 1 ofaccept the Share Your Shares, you will receive 0.468 Tangiers Shares.Offer What you will If you accept the Option Offer, subject to the satisfactionreceive if you or waiver of the conditions to the Option Offer, for every 1accept the Option of Your Options, you will receive 0.468 Tangiers OptionsOffer (with an exercise price of $0.75 and an expiry date of 1 February 2015). When you will Generally, Tangiers will issue the Tangiers Securities to youreceive the under the Offers on or before the earlier of:TangiersSecurities * one month after these Offers are accepted or one month after all of the conditions have been freed or fulfilled (whichever is the later); and * 21 days after the end of the Offer Period. Full details of when consideration will be provided are set out in clauses 12.6 and 13.6 of this Bidder's Statement. Will you need to If your Jacka Securities are registered in an Issuerpay brokerage or Sponsored Holding in your name and you deliver them directlystamp duty on to Tangiers, you will not incur any brokerage fees or beacceptances? obliged to pay stamp duty in connection with your acceptance of the Offer. If your Jacka Securities are registered in a CHESS Holding, or if you are a beneficial owner whose Jacka Securities are registered in the name of a broker, bank, custodian, or other nominee, you will not be obliged to pay stamp duty by accepting the Offers, but you should ask your Controlling Participant (usually your broker) or that nominee whether it will charge any transactional fees or service charges in connection with acceptance of the Offers. If you are a Foreign Securityholder, brokerage will be payable in respect of the Tangiers Shares and Tangiers Options sold under the nominee facility and will be deducted from the proceeds of sale. Broker handling Tangiers may offer to pay a commission to brokers who solicitfees acceptances of the Offers from their clients, but has made no final decision in relation to the matter at this stage. See section 11.2 for further information. Close of the The Offers close at 7.00pm (Sydney time) on 18 March 2014,Offers unless it is extended as permitted by the Corporations Act. There are some The Share Offer is subject to the following key conditions:conditions to theShare Offer * no material adverse change; * a minimum acceptance condition of 90% of the Jacka Shares and 53% of the aggregate of the Jacka Listed Options and the Jacka Unlisted Options; and * absence of `prescribed occurrences'. The full set of conditions of the Share Offer and their full terms are set out in clause 12.8 of this Bidder's Statement. There are some The Option Offer is subject to the following key conditions:conditions to theOption Offer * no material adverse change in Jacka; * a minimum acceptance condition of 90% of the Jacka Shares and 53% of the aggregate of the Jacka Listed Options and the Jacka Unlisted Options; and * absence of `prescribed occurrences'. The full set of conditions of the Option Offer and their full terms are set out in clause 13.8 of this Bidder's Statement. What happens if If the conditions of the Offers are not satisfied or waivedthe conditions of by the closing date, the Offers will lapse and yourthe Offers are acceptance will be void.not satisfied orwaived? Share Offer in Optionholders who hold Jacka Options (being Jacka Listedrespect of Options or Jacka Unlisted Options) and whose Options areconverted Jacka converted into Jacka Shares during the Offer Period, will beOptions able to accept the Share Offer in respect of the Jacka Shares which they are issued. The final date for converting Jacka Options into Jacka Shares in order to participate in the Share Offer is 5 March 2014 unless the Offer Period is extended under the Corporations Act. How you accept You may only accept the Share Offer for all Your Shares andthe Offers the Option Offer for all Your Options. Issuer sponsored security holders If your Jacka Securities are registered in an Issuer Sponsored Holding (such holdings will be evidenced by an `I' appearing next to your holder number on the accompanying Acceptance Form), to accept the Offers, you must complete and sign the Acceptance Form accompanying this Bidder's Statement and return it in the supplied envelope or post it to the address specified on the form so that it is received before the Offers close. CHESS security holders If your Jacka Securities are registered in a CHESS Holding (such holdings will be evidenced by an `X' appearing next to your holder number on the accompanying Acceptance Form), you may accept the Offers by either: * completing and signing the Acceptance Form accompanying this Bidder's Statement and returning it in the supplied envelope to the address specified on the form; or * instructing your Controlling Participant (normally your broker) to accept the Offers on your behalf, in sufficient time for it to be processed before the Offers close. Participants If you are a Participant, acceptance of the Offers must be initiated in accordance with Rule 14.14 of the ASX Settlement Operating Rules before the Offers close. Full details on how to accept the Share Offer are set out in clause 12.3 of this Bidder's Statement. Full details on how to accept the Option Offer are set out in clause 13.3 of this Bidder's Statement. Can you accept No. You cannot accept for part of your holding. You can onlythe Offers for accept the Share Offer for ALL of Your Shares and accept thepart of your Option Offer for ALL of Your Options.holdings What if you are a Jacka Foreign Securityholders, being Jacka SecurityholdersForeign with a registered address outside of Australia and itsSecurityholder external territories or New Zealand, that accept the Offers will not receive Tangiers Shares or Tangiers Options. Rather, the Tangiers Shares and Tangiers Options that Foreign Securityholders would have been entitled to receive will be issued to, and sold by, a Nominee and the net proceeds attributable to each Foreign Securityholder will be paid to them by cheque in Australian dollars drawn on an Australian bank account. Foreign Securityholders should read clauses 12.7 and 13.7 which provide further information on Foreign Securityholders and the Nominee sale process. What happens if You will remain a Jacka Securityholder and will not receiveyou do not accept the consideration under the Offers. If Tangiers becomesthe Offers entitled to compulsorily acquire your Jacka Securities, it intends to proceed with the compulsory acquisition. Where to go for For queries on how to accept the Offers, see the enclosedfurther Acceptance Form or call the Tangiers Offers Information Lineinformation on 1300 453 060 or +61 3 9415 4040. For queries in relation to your Jacka shareholding or option holding, call Jacka Securityholder Information Line on 1300 433 306 between 9.00am and 5.00pm (Perth time). For all other queries in relation to the Offers, please contact the Tangiers Offers Information Line on 1300 453 060 or +61 3 9415 4040. Please note that any calls to the above numbers may be recorded. Inquiries in relation to the Offers will not be received on any other telephone numbers of Tangiers or its advisers. Important notice The information in this clause 1 is a summary only of Tangiers' Offers and is qualified by the detailed information set out elsewhere in this Bidder's Statement. You should read the entire Bidder's Statement and the Target's Statement that Jacka sends to you, before deciding whether to accept the Offers. Profile of the Merged Group Corporate activities and strategy If Tangiers acquires all Jacka Shares on issue, the Merged Group will provideshareholders with a diversified international oil and gas group with potentialfor significant growth resulting in economic benefits which may not beavailable to either Tangiers or Jacka as stand-alone entities. The Merged Group aims to continue to build an African focused exploration andproduction company that delivers material value to its shareholders andcontributes to the development of the countries in which it works. It intends to achieve this by building a portfolio of assets with a balance oflow risk, moderate reward exploration, development or production opportunitiesand higher risk, large exploration potential in shallow water and onshorebasins. The opportunities the Merged Group will seek will be based on robust technicalevaluation together with informed socio-political decisions and culturalsensitivity in business relationships. The Merged Group will have a stronger financial position with an unaudited proforma cash position of approximately $7 million (before payment of transactioncosts of $1.94 million and repayment of Jacka's short term loan facility of$1.7 million) as at 31 December 2013 and the portfolio of oil and gas assets ofeach of the separate entities. Further funding is likely to be required to advance the projects of the MergedGroup. The Merged Group is likely to raise additional equity capital asappropriate. Tangiers believes it has sufficient working capital to carry outthe Merged Group's objectives in the short term. The retention of Jacka's existing interests in Somaliland, Nigeria and Tunisiamay, in some cases, be subject to the consent of its joint venture partners orgovernmental departments to the change of control of Jacka. Further informationon these consents are set out in section 9.2(c) of this Bidder's Statement. A pro forma table of the material project interests that would be held by theMerged Group is as follows: Country Block / Interest Joint Venture Operator Stage Licence Partners Morocco Tarfaya 25% Galp (50%) Galp Exploration Offshore Block ONHYM (25%) Tunisia Bargou 15% Cooper Energy Cooper Exploration & (offshore) (15%) Appraisal Dragon Oil (55%) Nigeria Aje Field 5% YFP (25%) YFP Exploration, (offshore) (revenue Appraisal, & interest) EER (16.9%) Development Feasibility FHN (16.9%) New Age (24%) Panoro (12.2%) Somaliland Odewayne 15% (subject (onshore) to completion Petrosoma (10%) Genel Exploration of farmout agreement Genel Energy with Sterling (50%) Energy), (option to Sterling Energy 20%) (25%) Tanzania Ruhuhu 100% - Jacka Exploration (onshore) Notes: * The interests stated are after completion of any announced farm-in arrangements. * Interest percentages have been rounded. * The Australian interests of both Tangiers and Jacka are not included as they are intended to be cancelled or relinquished or are otherwise not considered material. * Other than as referred to elsewhere in this Bidder's Statement, the acquisition of Jacka is not expected to have a material effect on the existing assets and operations of Tangiers. Ownership of Merged Group If all existing Jacka Shareholders accept the Share Offer (excluding any JackaShares issued on exercise of Jacka Options on issue) there will be 331,035,210Tangiers Shares on issue, of which 156,455,990 Tangiers Shares will be held byJacka Shareholders. This equates to a percentage of 47%. On a fully dilutedbasis, if all Jacka Optionholders accept the Option Offer and the TangiersOptions received as consideration were all exercised, there would be401,477,497 Tangiers Shares on issue of which 196,423,190 Tangiers Shares willbe held by Jacka Shareholders. This equates to a percentage of 49%. Based on the current holdings in each of Jacka and Tangiers, there is noscenario in which any one holder of Tangiers Shares will have voting power ofmore than 20% of the Merged Group. Furthermore, there would be no SignificantShareholders (as defined in the AIM Rules for Companies) in the Merged Group,as no one holder would hold over 3% of the Tangiers Shares on issue. As at the date of this Bidder's Statement, a pro forma list of the MergedGroup's top 20 shareholders is set out below: Shareholder No of Percentage Tangiers of total Shares Tangiers Shares (%) 1 CITICORP NOMINEES PTY LIMITED 9,064,601 2.74 2 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LTD 7,617,563 2.30 3 HSBC CUSTODY NOMINEES (AUSTRALIA) 7,008,094 2.12 4 ABLETT PTY LTD (DAVID EDWARDS FAMILY A/C) 6,550,000 1.98 5 AUSTRALIAN GLOBAL CAPITAL PTY LTD 6,085,509 1.84 6 PENINSULA INVESTMENTS (WA) PTY LTD 5,475,000 1.65 7 MARFORD GROUP PTY LTD 4,738,365 1.43 8 JP MORGAN NOMINEES AUSTRALIA 3,890,581 1.18 9 WILLOWDALE HOLDINGS PTY LTD 3,299,400 1.00 10 BARCLAYSHARE NOMINEES LIMITED 3,224,364 0.97 11 PHANTOM WA PTY LTD (KIRKHAM FAMILY A/C) 3,142,165 0.95 12 HARGREAVES LANSDOWN (NOMINEES) LIMITED (15942) 2,828,244 0.85 13 EKCO INVESTMENTS PTY LTD 2,779,900 0.84 14 HARGREAVES LANSDOWN (NOMINEES) LIMITED (VRA) 2,691,617 0.81 15 BANKSIA INVESTMENTS PTY LTD (BANKSIA INVEST CORP 2,687,250 0.81 S/F A/C) 16 SYDNEY EQUITIES PTY LTD (SUPERANNUATION FUND A/C) 2,659,921 0.80 17 MULATO NOMINEES PTY LTD 2,564,451 0.77 18 TD DIRECT INVESTING NOMINEES (EUROPE) LIMITED 2,390,761 0.72 (SMKTNOMS) 19 MR JASWINDER SINGH TAKHAR 2,246,400 0.68 20 HARGREAVES LANSDOWN (NOMINEES) LIMITED (HLNOM) 2,042,193 0.62 Directors of the Merged Group The directors of Tangiers, if Tangiers acquires Jacka, are proposed to beTangiers' existing directors Eve Howell, Brent Villemarette and Max de Vietri(see section 2.2 for a profile of these directors) and Bob Cassie and ScottSpencer (see section 4.2 for a profile of these directors). As previouslyannounced, it is proposed that following completion of the acquisition therewill be a three month period during which Eve Howell will transition toNon-Executive Chairman, Bob Cassie will be appointed Managing Director, and Maxde Vietri is likely to be replaced by a new Non-Executive Director to benominated by Tangiers. Further information on the proposed Jacka appointees, as required by the AIMRules for Companies, is as follows: Bob Cassie Robert Alexander Cassie (aged 56) holds a Bachelor of Science with honours ingeology and is a member of the American Association of Petroleum Geologists. MrCassie is currently the Managing Director of Jacka and is currently also adirector of Bob Cassie Consulting Pty Ltd and various Jacka subsidiarycompanies. Scott Spencer Scott Sherwood Spencer (aged 63) holds a Bachelor of Arts, a Bachelor ofPhilosophy and a Master of Letters. Mr Spencer is currently a Non-ExecutiveDirector of Jacka and is also a director of various Jacka subsidiaries andAubrey Consulting Pty Ltd. In the past 5 years, Mr Spencer has also been adirector of Monitor Energy Ltd (now Orca Energy Ltd), Greenrock Energy Ltd,Blade Petroleum Ltd and Leopard Minerals Plc. It is proposed that Bob Cassie and Scott Spencer will enter into executive orservices agreements with Tangiers with the following salary or directors fee: Director Salary or Director Fee Bob Cassie $400,000 per annum, inclusive of superannuation(Managing Director) Scott Spencer $50,000 per annum, exclusive of superannuation(Non-Executive Director) Following the successful close of the Offers, the proposed directors will havean interest in the following number of Tangiers Shares and Tangiers UnlistedOptions as a result of accepting the Offers in respect to existing Jacka Sharesand Jacka Listed Options that they hold as at the date of this Bidder'sStatement and entering into option cancellation deeds in relation to theirexisting Jacka Unlisted Options (see section 11.11 of this Bidder'sStatement):: Director Tangiers Shares Unlisted Tangiers Options Bob Cassie 35,100 234,000(Managing Director) Scott Spencer 702,000 936,000(Non-Executive Director) Pro forma historical consolidated financial information for the Merged Group a. Basis of presentation of unaudited pro forma historical consolidated financial information The unaudited pro forma historical consolidated financial information for theMerged Group, reflects the consolidated businesses of Tangiers and Jacka andcomprises the pro forma historical consolidated statement of financial positionas at 31 December 2013 and is presented in this section to provide JackaSecurityholders with an indication of the financial position of the MergedGroup as at 31 December 2013. As a result it is likely that this information will differ from the actualfinancial position for the Merged Group. The unaudited pro forma historicalconsolidated statement of financial position of the Merged Group as at 31December 2013 and the pro forma adjustments are disclosed in this section. The Merged Group unaudited pro forma historical consolidated financialinformation has been provided on the basis that Tangiers acquires Jackaaccordingly and: 1. the accounting policies of the Merged Group used to prepare the Merged Group unaudited pro forma historical consolidated statement of financial position are based on the recognition and measurement requirements of AASB standards; 2. the Merged Group unaudited pro forma historical financial information has been prepared based on the unaudited trial balance of Tangiers and the half year report for Jacka as at 31 December 2013 as released to ASX on 16 January 2014; and 3. the Merged Group unaudited pro forma historical consolidated financial information is presented in an abbreviated form and does not contain all of the presentation and disclosures that are usually provided in an annual financial report in accordance with the Corporations Act. In particular it does not include notes to the historical consolidated financial information of Tangiers and Jacka. b. Pro forma historical consolidated statement of financial position of the Merged Group The Merged Group's unaudited pro forma historical consolidated statement offinancial position is compiled from the aggregation of the: 1. Tangiers' historical consolidated statement of financial position as at 31 December 2013, an extract of which is set out in clause 2.4 of this Bidder's Statement; 2. Jacka's historical consolidated statement of financial position as at 31 December 2013, as extracted from the half year report and accounts released on ASX on 16 January 2014; and 3. pro forma adjustments to reflect the acquisition of Jacka by Tangiers as if Tangiers acquired all Jacka Shares and all Jacka Listed Options and Jacka Unlisted Options as outlined in this document on 31 December 2013 based on price of shares at 31 December 2013 which may change and the results might change. Set out below is the Merged Group's unaudited pro forma historical consolidatedstatement of financial position as at 31 December 2013. Tangiers Adjustments Adjusted Proforma December $ December 2013 2013 $ $ ASSETS Current Assets Cash and cash equivalents 6,089,313 934,092 7,023,405 Other receivables 121,212 12,116,591 12,237,803 Total Current Assets 6,210,525 13,050,683 19,261,208 Non-Current Assets Plant and equipment 49,243 11,529 60,772 Other financial assets 3,566,500 (3,253,366) 313,134 Exploration and evaluation 7,742,856 32,094,901 39,837,757expenditure Total Non-Current Assets 11,358,599 28,853,064 40,211,663 TOTAL ASSETS 17,569,124 41,903,747 59,472,871 LIABILITIES Current Liabilities Trade and other payables 915,761 5,394,421 6,310,182 Borrowings - 1,700,000 1,700,000 Total Current Liabilities 915,761 7,094,421 8,010,182 TOTAL LIABILITIES 915,761 7,094,421 8,010,182 NET ASSETS 16,653,363 34,809,326 51,462,689 EQUITY Contributed equity 55,889,563 36,767,158 92,656,721 Reserve 10,761,256 1,025,000 11,786,256 Accumulated losses (49,997,456) (2,982832) (52,980,288) TOTAL EQUITY 16,653,363 34,809,326 51,462,689 The pro forma historical consolidated statement of financial position showsadjustments based on the following transactions as if they occurred on 31December 2013. c. Pro forma adjustments The following pro forma adjustments have been made in the compilation of MergedGroup pro forma historical consolidated financial information on assumedacquisition of all Jacka Shares and all Jacka Listed Options by Tangiers andcancellation of all Jacka Unlisted Options. 1. the recognition of the farmout agreement with Galp Energia following the finalisation of documentation; 2. Tangiers' acquisition of all Jacka Shares on the issue of 1 Tangiers Share to Jacka Shareholders for every 0.468 Jacka Shares held. The maximum number of Tangiers Shares issued under the Offers will be 156,455,990 (subject to rounding), valued at $36,767,158. This assumes that no Jacka Options are exercised during the Offer Period; 3. Tangiers' acquisition of all Jacka Listed Options for consideration of the issue of 1 Tangiers Option to Jacka Listed Optionholders for every 0.468 Jacka Listed Options held; and 4. The cancellation of all Jacka Unlisted Options for consideration of the issue of 1 Tangiers Unlisted Option to Jacka Unlisted Optionholders for every 0.468 Jacka Unlisted Options held. The maximum number of Tangiers Options and Tangiers Unlisted Options issued under the Offers will be 39,967,200 (subject to rounding), valued at $1,025,000. This assumes that no Jacka Listed Options or Jacka Unlisted Options are exercised during the Offer Period. 5. For the purposes of allocating the consideration that Tangiers will provide to Jacka Securityholders, it has been assumed that the book value of Jacka's assets and liabilities as per their unaudited half year financial report at 31 December 2013 as extracted from the half year report and accounts released on ASX on 16 January 2014 are equal to their fair value as at 31 December 2013, with the excess of the consideration less these fair values being attributable to the exploration assets owned by Jacka. It is noted that the fair value assessment post acquisition may result in the identification of difference from the book value as extracted from the half year report and accounts released on ASX on 16 January 2014, which could materially impact the allocation as presented in the pro forma statement of financial position. 6. Accrual of advisory fees on completion of the Offer estimated at $1.94 million. For the purposes of the above pro forma historical consolidated statement of financial position, the amount has been included within Trade and other payables Prospects of the Merged Group If Tangiers acquires all the Jacka Shares and the Jacka Listed Options,Tangiers will remain the entity listed on the ASX and AIM and will be theultimate holding company for all companies with the new Merged Group. Theacquisition by Tangiers of all Jacka Shares and Jacka Listed Options willresult in a Merged Group with a diversified portfolio of oil and gas assets. This Bidder's Statement does not include forecasts or projections forproduction or earnings in relation to Tangiers or the Merged Group. Tangiersbelieves that the inclusion of such forecasts would be unduly speculative andpotentially misleading to Jacka Securityholders. The current dividend policy will be maintained. It is not anticipated thatTangiers will pay a dividend in the foreseeable future as Tangiers' focus is onthe development of its project portfolio with any operating surplus expected tobe re-invested in the Merged Group's projects. ROBERT DALTONJoint Company Secretary Tangiers Petroleum LimitedLevel 2, 5 Ord StreetWest Perth WA 6005, AustraliaPh: + 61 8 9485 0990www.tangierspetroleum.com Contacts RFC Ambrian Limited (Nominated Adviser)Mr Stuart Laing+61 8 9480 2506 Peel Hunt LLP (Joint AIM Broker)Mr Richard CrichtonMr Andy Crossley+44 20 7418 8900 Mr Ed Portman (Media and Investor Relations - United Kingdom)Tavistock Communications+44 20 7920 3150