88 Energy Regulatory News (88E)

TANGIERS PETROLEUM LIMITED - Quarterly Report December 2012

PR Newswire

London, January 31

31 January 2013

Quarterly Report for Period Ending 31 December 2012

The Board of Tangiers Petroleum Limited is pleased to provide the following

commentary on its activities during the quarter ended 31 December 2012. A copyof the full quarterly report, including the diagrams referred to in the textand the Appendix 5B (Quarterly Cash Flow Report), is available on theCompany's website at www.tangierspetroleum.com

This quarter was a significant and successful one for the Company, both inraising capital and negotiating farm out agreements resulting in the Companyending the calendar year with its future commitments fully funded and astrengthened balance sheet.

Operationally, the processing of the Assaka 3D seismic survey data (Tarfayablock, Morocco) was completed. This survey was located over the Trident,Assaka and TMA prospects which had previously been identified on 2D data. Thenew data has confirmed these prospects and will be utilised to identify theoptimum well location.

Corporate activities were focused on raising capital and negotiatingagreements whereby the Company would be carried through its explorationcommitments and also improve its cash position.

The Company is also moving to strengthen its management team and we arepleased to advise of the appointment of Robert Dalton as Chief FinancialOfficer during the quarter.

The key operational activities for the quarter were:

- the completion of the processing of the 3D seismic data over the Trident,

Assaka and TMA prospects in the Tarfaya Block, Morocco; and

- the commencement of planning for a 3D survey in the Australian permits,

WA-442-P and NT/P81.

The key corporate activities for the quarter were:

- execution of a farmout agreement with Galp Energia for assignment of a 50%

interest in the Tarfaya Block, Morocco for a carry of up to US$33 million in

an exploration well and refund of back costs of US$7.5 million;

- execution of a Heads of Agreement with CWH Resources for assignment of a 70%

interest in exploration permits, WA-442-P and NT/P81 for a carry of A$35

million in the exploration program of 3D seismic acquisition and two wells;

and

- appointment of Robert Dalton as Chief Financial Officer.

The Appendix 5B (Quarterly Cash Flow Report), which is available on theCompany's website, contains the Company's cash flow statement for the quarter.The significant elements for the period were:

- exploration expenditure of A$0.711 million (Sep 2012 A$0.673 million), the

majority of which are costs associated with the processing of the Assaka 3D

seismic data;

- the completion of a capital raising of A$7.2 million (before costs) by way

of a two tranche placement in the UK and Australia and a Share Purchase Plan;

- administration, and other operating costs of A$0.772 million (Sep 2012

A$0.644 million); and

- payment of the remaining amount due on the bank guarantee in Morocco to an

amount of US$3 million.

The Company recorded a net cash inflow of A$2.2 million for the quarter (Sep2012: net cash inflow of A$1.48 million). At the end of the quarter, theCompany had net cash reserves of $4.2 million excluding US$3 million bankguarantee in Morocco.

On satisfaction of the conditions precedent for the Galp farm-in agreementwhich relate to approvals from the Moroccan government, cash reserves will beaugmented by US$7.5 million of back costs and return of the US$3 million bankguarantee.

The Tarfaya Block, offshore Morocco, comprises 8 contiguous permits coveringan area of 11,281 km2 (approximately 2.8 million acres). The Tarfaya Block issituated approximately 600 km southwest of Morocco's capital, Rabat, inshorefrom the Canary Islands on Morocco's Atlantic Margin. The Block containsmultiple prospects and leads within Jurassic sediments as well as emergingpotential within the Tertiary, Cretaceous and Triassic Formations.

Processing of the 677 km2 Assaka 3D seismic survey (Fig.2) by CGG Veritas hasbeen completed. The Assaka 3D survey covers three of the Tarfaya Block'sprimary prospects in the Jurassic: Trident, TMA, and Assaka, which have beenindependently assessed by NSAI and ISIS to have a combined P50 gross unriskedoriginal oil-in-place of 3,789 million barrels (with 2,841 million barrelsattributable to the Company's current 75% interest). The new 3D data is ofmuch better quality than the earlier 2D data and reveals the horizons andstructures within the Jurassic section to a much greater extent. Deeperhorizons are much better imaged and continuous, greatly assisting the mappingand also verifying the structural configuration of the prospects that weremapped on the 2D data. In addition, the overlying Cretaceous and Tertiaryhorizons are much clearer on the 3D data set and faults are better defined.

The four primary Jurassic prospects certified thus far by ISIS and NSAI withinthe Tarfaya Block have now all been covered with 3D seismic data. The La Damprospect located to the south of the Trident, TMA and Assaka prospectscontains best estimate gross unrisked original oil-in-place of 546 millionbarrels (409 million barrels attributable to the Company). It is covered by a580 km2 3D seismic survey acquired in 2006 and reprocessed in 2011. Total bestestimate gross unrisked original oil-in-place for the four Jurassic prospectsin the Tarfaya block is 4,335 million barrels (3,521 million barrelsattributable to the Company).

The Company continues to focus exploration efforts towards maturing leadsidentified within the shallower Lower Cretaceous Sands, Upper Jurassicdolomite horizons, and rollover anticlines in Triassic grabens underlying theJurassic section.

Tangiers has entered into a farm-out agreement with Galp Energia whereby Galpwill earn a 50% interest in the Tarfaya Offshore area by spending US$40.5million, which includes a full carry on the exploration well of US$33 millionand reimbursement of US$7.5 million for past costs. This essentially coversTangiers financial obligations for the Tarfaya Block for the First Extensionperiod (to August 2014).

The Company will retain 25% equity in the Tarfaya Offshore area while OfficeNational des Hydrocarbures et des Mines (ONHYM), the Moroccan state company,will maintain its 25% interest in the Tarfaya Offshore area. As part of theagreement, Galp will assume the operatorship and commence planning the firstexploration well in the Tarfaya Offshore area on the Trident Prospect.

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

These two contiguous exploration permits encompass 3900 km2 and are locatedapproximately 20 km offshore in the southern, shallow Federal waters off ofthe northern Western Australia and Northern Territory coasts, approximately320 km southwest of Darwin (Figure 3). The permits are located in relativelyshallow water with depths of less than 60 m and are covered with extensive 2Dand modest 3D seismic data.

Situated southeast of the producing Blacktip gas field, these two permitsoffer multiple play types. There are structural, stratigraphic, andcombination structural and stratigraphic oil plays in the Early CarboniferousMilligans Formation, a new deeper gas play concept within the Early Paleozoicintervals plus the Carboniferous to Permian undeveloped Turtle and Barnett oilfields including the Messner and East Barnett oil leads in the same interval.

ISIS Petroleum Consultants has prepared a Competent Person's Report (CPR) for14 leads identified in the Early-Mid Carboniferous Milligans Fan oil play.ISIS estimates the combined mean unrisked oil-in-place to be 683 millionbarrels (615 million barrels attributable to the Company). The combinedestimate for gross unrisked mean Prospective Resources for the 14 leads is 218million barrels of oil (196 million barrels attributable to the Company). TheMilligans interval has produced oil and gas on drill stem tests of two wellpenetrations, Turtle-2 and Barnett-2, within the WA-442-P and NT/P81 PermitAreas. This serves to confirm the presence of an active petroleum system atthis horizon.

The deeper gas play consists of two very large structures, Nova and SuperNova. These structures are believed to be located within Devonian agedsediments below the mapped Top Bonaparte horizon and underlie the Turtle andBarnett oil fields. An independent evaluation and CPR prepared by ISIS on theNova prospect provides a gross mean unrisked gas-in-place estimate of 6.93trillion cubic feet of gas (6.24tcf attributable to the Company). Thecorresponding estimate of gross mean unrisked Prospective Resources is 3.46trillion cubic feet of gas (3.11tcf attributable to the Company).

The shallower undeveloped Turtle and Barnett oil fields were discovered in1984 and 1985, respectively. Multiple oil bearing reservoirs have beenencountered within the Carboniferous to Permian Keyling, Treachery, Kuriyippi,Tanmurra and Milligans formations. Three wells tested oil with the Barnett-2well having flowed up to 921 barrels of oil per day on jet pump from the EarlyPermian Lower Treachery Sandstone. The crude oil was of excellent quality at38.6° API gravity. Engineering and reservoir studies have been undertaken toassess suitable development concepts.

Tangiers has signed a non-binding heads of agreement (HOA) with CWH Resourcesfor them to farm in to exploration permits WA-442-P and NT/P81 in theBonaparte Basin. As part of the agreement, CWH will cover the first AUD $35million in exploration costs in order to earn 70% equity in the permits andbecome the operator of the permits. Tangiers will retain 27% equity inWA-442-P and NT/P81 while Ansbachall, an existing joint venture partner in thepermits, will maintain a 3% stake. The level of funding being put forth by CWHis expected to fulfil the remaining Firm Work Program Commitments of seismicacquisition and drilling for the two permits.

The Joint Venture partners are planning to acquire a 3D seismic survey in thetwo permits and work has started on an environmental study in advance of the3D seismic acquisition programme.

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

Tangiers acquired the NT/P83 Exploration Permit located some 120 km north ofDarwin in the last bidding round for offshore acreage that closed on 12 April2012. The permit was awarded in August 2012 and covers 15,540 km2 in waterdepths of less than 200 m. No wells have been drilled in the block althoughthere have been shows of hydrocarbons in wells drilled to the east and west ofthe block. The large Evans Shoals and Abadi Gas Fields are located to thenorthwest of NT/P83. Evaluation by Tangiers Petroleum has shown that there arethree main play types in the block. There are Palaeozoic subcrop and deepanticlinal closures, Jurassic reactivated tilted fault blocks and inversionstructures and Cretaceous clastic stratigraphic plays in prograding shelfsands of the Puffin Formation and Darwin Radiolarite. The initial focus is onplanning to acquire approximately 500 line km of 2D seismic data.

ATP-587-P Cooper/Eromanga Basins, Onshore Queensland (100% and Operator)

Tangiers has withdrawn from ATP-587-P and relinquished its interest in thisonshore Cooper-Eromanga Basin exploration permit in Queensland. The block wasa legacy asset which had received minimal exploration focus.

Hydrocarbons in Place Summary

Detailed below are the estimated oil and gas-in-place estimates for theCompany's portfolio of project interests.

Gas-in-Place Estimates (unrisked) (all figures in trillions of cubicfeet)Nova Prospect, 0.375 6.930 15.704 90% 0.338 6.24 14.134 TangiersAustralia

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

Prospective Gas Resources (unrisked) (all figures in trillions of cubicfeet)Nova Prospect, 0.17 3.46 7.83 90% 0.15 3.11 7.04 unrisked TangiersAustralia

The information in this announcement was produced by Mrs MargaretHildick-Pytte who is the Director of Exploration for Tangiers and Mr BrentVillemarette who is an Executive Director of Tangiers. Mrs Hildick-Pytte holdsa BSc and MSc in Geology and is undertaking an MSc in Petroleum Engineering.She is a member of SPE, AAPG, the SPWLA and PESA; and is a Fellow of theLondon Geological Society. Mr Villemarette is a petroleum engineer with over30 years of experience and is a member of the Society of Petroleum Engineers.Mrs Hildick-Pytte and Mr Villemarette have reviewed this announcement andconsent to its release.

Terminology and standards adopted by the Society of Petroleum Engineers("SPE") "Petroleum Resources Management System" have been applied in producingthis document.

Under these standards:

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

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

Mr Ed Portman (Media and Investor Relations - United Kingdom)Tavistock Communications+ 44 20 7920 3150