88 Energy Regulatory News (88E)

19 January 2015 LARGE UNCONVENTIONAL RESOURCE IDENTIFIED AT PROJECT ICEWINE **A full pdf version of this announcement including tables and images isavailable from the Company's website at www.tangierspetroleum.com.au *Recently completed Independent Resource Report by DeGolyer and MacNaughton forProject Icewine, on the prolific North Slope of Alaska, estimates potential oilin place of 8 billion barrels* (gross mean unrisked) *Estimated recoverable oil potential of 492 million barrels* (gross meanunrisked) *Probability of geologic success estimated at 41% *"Best of Breed" resource concentration confirmed, highlighting excellentpotential on a comparative basis to successful North American shale plays *Conventional oil potential to be assessed at Project Icewine: - 3.98Bn barrels of undiscovered potential on the Central North Slope (USGS2013) \* Tangiers has an 87.5% working interest in the Project and will be operator of99,360 acres *High impact 3 well drilling campaign testing unconventional and conventionaltargets imminent on adjacent acreage north of Project Icewine *Cautionary Statement: The estimated quantities of petroleum that may bepotentially recovered by the application of a future development project relateto undiscovered accumulations. These estimates have both an associated risk ofdiscovery and a risk of development. Further exploration, appraisal andevaluation are required to determine the existence of a significant quantity ofpotentially movable hydrocarbons. Prospective Resource assessments in this release were estimated usingprobabilistic methods in accordance with SPE-PRMS standards. Tangiers Petroleum Limited ("Tangiers" or the "Company", ASX:TPT, AIM TPET) ispleased to announce the findings of an Independent Report completed by DeGolyerand MacNaughton estimating substantial resource potential at its ProjectIcewine (the "Project"), located on the North Slope of Alaska. A summary of thereport's findings are tabulated below. Tangiers' Managing Director, Dave Wall said "The Independent Report by DeGolyerand MacNaughton has resulted in net mean recoverable unconventional potentialfor Tangiers of 431 million barrels of oil. Tangiers believe this indicatessubstantial upside potential if the entire project area is productive and/ormean recovery factor is ultimately higher than that currently estimated. Thevalidation of the exceptional resource concentration is particularlysignificant as this is a first order driver of well performance in successfulliquids rich shale plays like the Eagle Ford and Bakken. The Companyanticipates being able to provide guidance on the conventional oil potential atthe Project later in the year and looks forward to insights from the imminentdrilling program by Great Bear immediately to the north of our acreage." Table 1: INDEPENDENT ASSESSMENT OF UNCONVENTIONAL PROSPECTIVE RESOURCES Prospect Icewine: Gross Estimated Unconventional Prospective Oil Resources: HRZ, Hue, Kingak & Shublik ShalesNorth Slope,Alaska (Source: DeGolyer & MacNaughton as of December 31, 2014) Unrisked: Risked: (Chance of geologic success 41 %) Estimate (million Low Best High Mean Risked Meanbbl): Gross 244.3 446.4 813.2 492.5 200.3 Net to Tangiers 213.7 390.6 711.5 430.9 175.3(WI post award:87.5%) HRZ SHALE MEMBER - PRIMARY OBJECTIVE HIGHLIGHTS Project Icewine is located in a region that was subject to a unique set ofgeologic circumstances that have likely resulted in enhanced porosity in theHRZ shale member. This differentiates the HRZ in a positive way from othersuccessful shale plays and is extremely significant. These circumstances arebroadly described below: *Restricted depositional environment within the Cretaceous Seaway (thatextended through central North America generating many of its prolific onshoresource rocks) *Volcanic activity contributed volcanic ash and glass during the deposition ofthe HRZ organic shales *Differential compaction of the organic material on a 30:1 ratio whilst thevolcanic glass, due to its hardness, retained its form *Post burial diagenesis, (alteration / dissolution), of the volcanic glassresulted in additional voids/pore space creating enhanced primary porosity inthe HRZ shale Improved overall porosity will increase the capacity for the HRZ member toretain hydrocarbons, resulting in exceptional resource concentration. Thisresource concentration, or oil in place per acre per foot, is highlycorrelative to well performance and ultimate recovery when combined with otherrequisite attributes for a successful shale play. Comparative resourceconcentration between Tangiers' primary target, the HRZ, and other successfulshale plays is shown below. Significant factors of note are the exceptionalporosity (estimated in the DeGolyer and MacNaughton report) and the oil inplace per 640 acres. This results in a resource concentration per well that ismultiples of the next best shale play in North America, based on likely wellspacing. Whilst it stands to reason that the more resource that can be accessedby the well bore, the better the recovery factor, this can only be truly provenby drilling. Table 2: Resource Concentration Driven by Exceptional Porosity Liquids Shale Net Pay Porosity Oil In Place Well Resource Play Concentration (ft) (%) (MMBOE / 640 Spacing Acres) (In Place MMBOE (Acres) /Well) HRZ 173 14 60.4 80 7.54 Bakken 65 5 10.6 160 2.65 Eagle Ford 135 10 46.9 40 2.95 Shale oil plays exploit resources generated within the source rock that did notmigrate and it is possible, by predictive modelling, to target the mostproductive part of a shale fairway - the sweetspot. Analysis of fluidcomposition and reservoir pressure are essential criteria in the assessment ofshale, and therefore it is crucial to have a profound understanding of thesource rock kinetic model coupled with the regional basin model. Tangiers'partner and project generator, has analysed substantial data over several yearsto validate the predictive model, which indicates that Project Icewine is inthe sweetspot of the play. Table 3: The HRZ vs Other Successful Oil Shale Play Common Attributes Attribute Comment Project Icewine Burial History Needs to be volatile oil/wet gas to maximise valueand Thermal of hydrocarbons produced and balance optimalMaturity viscosity to increase well performance => Well data (TOC, rock-eval, vitrinite reflectance data) from wells located in and near the Project area confirm a burial history and heat flow model that indicate a depth and maximum bottom hole temperature that correlate to generating the desired ratio of high value liquids Phase Liquids must be in gaseous phase in the reservoir to maximise flow rates => unique prospecting tool box developed by Eagle Ford early mover, and Tangiers partner, provide high confidence Source Rock / Must be oil prone - Type I or II => Icewine isKerogen Type organic rich, deep water marine Type II kerogen. Organic matter type also can contribute organic porosity and potentially augments storage potential within the shale Overpressure Pressure gradient of >0.5psi/ft required to assist with lift of hydrocarbons and also increase the amount of fluid that can exist as a vapour in the reservoir => petrophysical analysis of bottom seal provided by Pebble Shale indicates >0.55psi/ft Rock Mechanics Must be "frackable" i.e. brittle => highly brittle lithology reported in the HRZ/Hue by Great Bear wells on adjacent acreage Tectonic Continuity of reservoir => Icewine is outboard ofSetting the Brooks Range compressional complex in a structurally simple and tectonically relaxed foreland basin. The simple structuring means greater reservoir continuity and lends itself to horizontal drilling Total Organic Decent TOC is required but the amount of hydrogenCarbon (TOC) associated with the carbon is also a critical piece of the puzzle => high TOC (up to 8%) reported in wells from the HRZ/Hue on adjacent acreage The location of the project - on a major access road, adjacent to the pipelineand only 35 miles South of Pump Station 1 - provides both year-roundoperational access and a direct path to market through existing infrastructure,meaning that commercialisation can occur inexpensively and quickly, on acomparative basis. Internal analysis suggests that the full ~100,000 acre position at ProjectIcewine could be in the sweet spot of the play, where recovery factors of >10%have been forecast for other successful liquids rich shale plays in the USA.Drilling of a vertical core hole to confirm this analysis is planned as soon asis practical. Table 4: HRZ Volumetrics Prospect Icewine: HRZ Shale - Primary Objective (Source: DeGolyer & MacNaughton as of December 31, 2014) Monte Carlo: Probability Distribution Parameter P90 P50 P10 Mean Productive area (acres) 16,619 39,331 79,107 43,809 Thickness (ft) 132 170 218 173 Porosity (decimal) 0.115 0.140 0.166 0.141 Oil Saturation (decimal) 0.511 0.570 0.629 0.570 Fm Volume Factor, Bo 1.208 1.144 1.081 1.142 Recovery Factor (decimal) 0.025 0.058 0.101 0.061 Prospective Gross OOIP 1,488 3,606 7,450 4,107(million bbl): Prospective Gross Ultimate 65.8 192.5 501.5 250.4Recovery (million bbl): Prospective Ultimate Recovery 57.3 168.5 438.8 219.1net to TPT (million bbl) PROJECT ICEWINE LOCATION AND OVERVIEW Figure 1: Project Icewine Location and Activity Map(please refer to the pdfversion of this announcement available from the Company's website) Table 5: Project Icewine Highlights Located in proven, prolific and productive petroleum province which hosts thelargest oil field complex in North America First Mover Tangiers and partner, Burgundy Xploration, early entrantsAdvantage into developing unconventional shale oil play and Brookian conventional plays on the Alaskan North Slope Two Highly Unconventional Oil Play: Exceptional resource potential ofProspective Liquids 492mmbbl, HRZ primary target ticks all boxesRich Plays Conventional Oil Play: 3.98 Billion Barrels of Undiscovered Recoverable Resources in the Central North Slope (USGS 2013) Attractive Fiscal Excellent fiscal regime, politically stableTerms 10 year primary leases with no mandatory relinquishment 12.5% State Royalty (16.5%including ORRI) Mature Operational year round access - located on Dalton HighwayInfrastructure Trans Alaska Pipeline runs through Project Icewine with 1.5 MM BOD spare capacity Generous Tax Alaskan State Tax incentives on exploration drilling:Incentives * 85% cash refund (2015), 75% (mid 2016) thereafter 35% Mezzanine funding available based on tax incentives Material Position Large, contiguous ~100,000 acre position exceeds hurdle rate to attract oil majors; material 87.5% working interest & operatorship Yours faithfully Dave WallManaging DirectorTangiers Petroleum Ltd Media and Investor Relations Australia Tangiers Petroleum Limitedadmin@tangierspetroleum.com.au+61 8 9485 0990 Level 2, 5 Ord StreetWest Perth WA 6005, Australia Hartleys LtdAs Corporate AdvisorMr Dale Bryan+ 61 8 9268 2829 United Kingdom RFC Ambrian Limited As Nominated AdviserMr Oliver Morse / Ms Trinity McIntyre+61 8 9480 2500 As Corporate BrokerMr Charlie Cryer+44 20 3440 6800 The Prospective Resource estimates above have been reviewed by Mr BrentVillemarette who is a Non-Executive Director of Tangiers. Mr Villemarette is areservoir engineer with over 30 years' experience and is a member of theSociety of Petroleum Engineers. Mr Villemarette has reviewed the informationand supporting documentation referred to in this announcement and considers theprospective resource estimates to be fairly represented and consents to itsrelease in the form and context in which it appears. Terminology and standardsadopted by the Society of Petroleum Engineers "Petroleum Resources ManagementSystem" have been applied in producing this document.