Last checked at 2 Aug 2012 07:00
31 July 2012
TANGIERS PETROLEUM LIMITED
Quarterly Report for Period Ending 30 June 2012
The Board of Tangiers Petroleum Limited is pleased to provide the following commentary. A copy of the full 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
June 2012 Quarter - Highlights
Africa: Morocco - Tarfaya Offshore Block
* Processing of the 677 km2 Assaka 3D seismic survey over the Company's primary prospects Trident, TMA, and Assaka within the Tarfaya Block, offshore Morocco was been awarded to CGG Veritas. * CGG Veritas commenced the Assaka 3D processing programme in early June with expected completion by late October 2012. * Seismic AVO analysis by Schlumberger-WesternGeco has been completed on selected reprocessed 2D seismic lines through the "flat spot" anomaly identified in the mid Tan-Tan Formation. Based upon this work the results are indicative of high porosity and hydrocarbons in the shallower Cretaceous sandstones. * Rock properties utlised for the AVO analysis are to be used to further evaluate prospective intervals in the Cretaceous and work will begin on the Jurassic carbonate sections. * Mapping has begun on rollover anticlines in Triassic grabens underlying the Jurassic section. Preliminary results indicate the structures add additional prospectivity to the Tarfaya block. The Tertiary and Triassic age sections will be further evaluated in the coming months. * Preliminary organic geochemical analysis of outcrop samples taken during the November 2011 Field Trip has identified both Jurassic and Cretaceous source rocks capable of generating two distinct families of oils. These results are being compared to the oils at the Cap Juby discovery adjacent to the Tarfaya block. * Macquarie Capital (Europe) has been engaged to act in the capacity of financial advisor to Tangiers in respect to its proposed farm-out of the Tarfaya Block. During the quarter Macquarie opened a physical data room in London to provide potential farminee partners access to all seismic data, Independent Resource and Competent Person's Reports, and all available well data relating to the Tarfaya Block. Tangiers gave management presentations to potential farminee partners in London during the month of June. * Presentations were received well by potential farminees and the process is expected to be completed during the second half of 2012.
Australia: WA-442-P and NT/P81 Exploration Permits (Turtle and Barnett)
* ISIS Petroleum Consultants (ISIS) opened a physical data room in Perth for the purpose of securing farminee partner(s) to promote the future 3D seismic acquisition and exploration drilling programmes within the WA-442-P and NT/P81 Bonaparte Basin Permit Areas, offshore Northern Australia. * The primary focus is on the 14 Early Carboniferous age Milligans Fan oil play leads and the Early Carboniferous to Devonian Nova and Super Nova deep gas prospects, with a secondary focus on the future shallower Carboniferous to Permian Turtle Barnett oil development programme. * ISIS has estimated the combined mean gross unrisked oil-in-place (STOIIP) for the 14 Milligans leads at 683 million barrels of oil with a high side case of almost 1.5 Billion barrels of oil-in-place. * Gross unrisked mean Milligans Prospective Resources are estimated to be 218 million barrels of oil with the high side case being 505 million barrels of oil. * ISIS has previously provided a Competent Person's Report on the Nova prospect, which indicated the mean undiscovered, unrisked gas initially in place to be 6.93 trillion cubic feet of gas with an unrisked gross prospective gas resource of 3.46 trillion cubic feet of gas. * Tangiers published a paper in the May, 2012 APPEA Journal entitled "New Play Type, Southern Bonaparte Basin-Petrel Sub Basin-WA-442-P and NT/P81 Exploration Permits". A poster and talk were also given at the APPEA conference on the new play type. * The ISIS data room and presentations for the farm-out have been received well and the process is expected to be completed in the second half of 2012. * An environmental study has commenced in advance of the seismic acquisition over the WA-442-P and NT/P81 permits. It is anticipated that this study should be completed by the end of the third quarter 2012. * Tenders have gone out for seismic acquisition vessels to shoot a ~650 square kilometre survey over the prospect areas. It is anticipated a decision will be made by the end of the third quarter 2012.
Tarfaya Offshore Block - Morocco (75% and Operator)
The Tarfaya Block, offshore Morocco, is comprised of 8 contiguous permits covering an area of 15,041 square kilometres (approximately 3.7 million acres) and is situated approximately 600 kilometres southwest of Morocco's capital Rabat, inshore from the Canary Islands on Morocco's Atlantic Margin. The Block contains multiple prospects and leads within the Jurassic and Cretaceous sediments as well as emerging potential within the Tertiary and Triassic Formations.
The company has recently awarded the 677 km2 Assaka 3D seismic processing project to CGG Veritas. The processing programme commenced in early June with completion expected in late October.
The Assaka 3D survey encompasses three of the Tarfaya Block's primary prospects, Trident, TMA, and Assaka, which have been independently assessed by ISIS and NSAI to have a combined best estimate unrisked prospective resource of 758 million barrels of oil. The four primary prospects certified thus far by ISIS and NSAI within the Tarfaya Block now all have been covered with 3D seismic. The La Dam prospect with a best estimate gross unrisked prospective resource of 110 million barrels of oil and has previously been covered by a 580 km2 3D seismic survey acquired in 2006 and reprocessed in 2011.
The Company continues to focus exploration efforts towards maturing multiple leads identified within the shallower Lower Cretaceous Sands and Upper Jurassic dolomite horizons. Leads have also been identified in the underlying Triassic section as well.
Schlumberger-WesternGeco has completed seismic AVO analysis on selected reprocessed 2D seismic lines through the "flat spot" anomaly identified in the mid Tan-Tan Formation.
Results of the 2D simultaneous inversion work on the lines indicate that there are zones of high porosity and hydrocarbon indicators at two levels within the Cretaceous.
Rock properties utlised for the AVO analysis are to be incorporated into further simulation evaluation of the Cretaceous Sands. The Jurassic carbonates will be examined for AVO anomalies as a continuation of this work within the next quarter.
Once the Cretaceous mapping programme is complete and prospects confirmed they will be submitted to an independent petroleum consultant in order to provide a prospective resource estimate. Attention will then shift to evaluating the potential of the Tertiary and Triassic age sections.
Macquarie Capital (Europe) has been engaged to manage the farm-out process for Tarfaya. The objective is to secure potential farminee partner(s) and thus expedite the Tarfaya Block exploration programme, specifically regarding the commencement of an exploration drilling campaign during 2013.
A physical dataroom was opened in London during the quarter with management presentations provided during June. The potential farminee partner(s) have been provided access to all seismic data, Independent Resource and Competent Person's Reports, and all available well data relating to the Tarfaya Block. Macquarie also serves in the capacity of financial advisor for the project.
WA-442-P (Turtle) and NT/P81 (Barnett) (90% and Operator)
These two contiguous permits encompass 3900 square kilometres and are located in the southern, shallow Federal waters offshore northern Western Australia and Northern Territory, approximately 320 kilometres southwest of Darwin.
Situated southeast of the producing Blacktip gas field, these two permits offer multiple play types. Tangiers has identified an exciting new deeper gas play concept within the Early Paleozoic interval, outstanding oil plays in the Early Carboniferous Milligans Fans, and the Carboniferous to Permian undeveloped Turtle and Barnett oil fields with the Messner and East Barnett oil leads in the same interval.
The deeper gas play consists of two very large structures, Nova and Super Nova with closures estimated at 450 square kilometres and 550 square kilometres, respectively. These structures are believed to be located within Devonian aged sediments below the mapped Top Bonaparte horizon and underlie the Turtle and Barnett oil fields.
An independent evaluation and CPR prepared by ISIS on the upper portion of the Nova prospect alone provides a mean gross unrisked gas-in-place estimate of 6.93 trillion cubic feet of gas with an unrisked gross prospective resource of 3.46 trillion cubic feet of gas.
This new play type for the southern Bonaparte Basin was published in a technical article in the May, 2012 APPEA Journal. A poster session and presentation was also given at the APPEA conference in May.
Significant oil potential has also been identified within the Early-Mid Carboniferous Milligans Fan oil play with 14 leads having been mapped, 8 of which are structural with 6 being a combination structural/stratigraphic in nature. A CPR prepared by ISIS Petroleum Consultants on the Milligans Fan oil play assesses the combined mean gross unrisked oil-in-place at 683 million barrels with a high side of 1,489 million barrels.
The mean gross unrisked prospective resources are estimated to be 218 million barrels of oil with an upside case of 505 million barrels of oil. The Milligans interval has been intersected in previous wells within the WA-442-P and NT/P81 Permit Areas with Turtle-2 and Barnett-2 having flowed oil and gas on drill stem tests of the Milligans sands. This serves to confirm the presence of an active petroleum system at this horizon.
The shallower undeveloped Turtle and Barnett oil fields were discovered in 1984 and 1985, respectively. Multiple oil bearing reservoirs have been encountered within the Carboniferous to Permian Keyling, Treachery, Kuriyippi, Tanmurra and Milligans formations. Three zones tested oil within the Barnett-2 well having flowed up to 921 barrels of oil per day on jet pump from the Early Permian Lower Treachery Sandstone. The crude was of excellent quality at 38.6° API gravity. Engineering and reservoir studies have been undertaken to assess suitable development concepts.
ISIS Petroleum Consultants (ISIS) opened a physical data room in Perth during the quarter for the purpose of securing farminee partner(s) to promote expanded future 3D seismic acquisition and exploration drilling programmes within the WA-442-P and NT/P81 Bonaparte Basin Permit Areas, offshore Northern Australia. The primary focus is on the 14 Milligans Fan oil play leads and the Nova and Super Nova deep gas prospects with the secondary focus on the future Turtle Barnett oil development programme. The process has been well received and is expected to be completed in the second half of 2012.
As part of its work commitments and in order to further delineate the prospects and drill targets, Tangiers is proposing to conduct a 3D seismic shoot over its block. The proposed seismic polygon will capture the Nova and Super Nova structures, the majority of the Turtle Barnett field as well as a substantial portion of the Milligans prospects.
Tenders have gone out for seismic acquisition vessels to shoot a ~650 square kilometre survey over the prospect areas. It is anticipated a decision will be made by the end of the third quarter.
An environmental study has commenced in advance of the seismic acquisition over the WA-442-P and NT/P81 permits. This study is anticipated to be completed by the end of the third quarter.
ATP-587-P Cooper/Eromanga Basins, Onshore Queensland (100% and Operator)
ATP-587-P consists of 12 Blocks to the west of the Thomson River between Stonehedge and Jundah southeast of Longreach and covers approximately 946 square kilometres. Geologically the tenement is situated within the Mesozoic Eromanga Basin with the southeast portion of the tenement being underlain by the northeastern edge of the Late Paleozoic-Triassic Cooper Basin. In addition to conventional oil and gas, the area is thought to have potential for coalbed methane gas and oil shale plays.
ATP-587-P is covered by regional seismic with detailed 2D grids over four prospects.
Consistent with prior announcements the company is currently assessing its long term plans for this permit.
Qualified Person Statement
Mr Brent Villemarette who is an Executive Director of Tangiers Petroleum is a petroleum engineer with sufficient experience that is relevant to the style and nature of oil prospects under consideration and to the activities discussed in this document. His academic qualifications and industry memberships appear on the Company's website and both comply with the criteria for "Competence" under clauses 18-21 of the Valmin Code 2005. Terminology and standards adopted by the Society of Petroleum Engineers ("SPE") "Petroleum Resources Management System" have been applied in this document. Mr Villemarette has reviewed the contents of this announcement and consents to its release.
SPE Definitions
Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.
Undiscovered Hydrocarbons (Gas or Oil)-Initially-In-Place is that quantity of hydrocarbons which is estimated, on a given date, to be contained in accumulations yet to be discovered. The estimated potentially recoverable portion of such accumulations is classified as Prospective Resources, as defined above.
KRYSTEL KIROUJoint Company SecretaryTangiers Petroleum LimitedLevel 6, 5 Mill StreetPerth WA 6000, AustraliaPh: +61 8 9485 0990 www.tangierspetroleum.comContactsMr Mark CeglinskiExecutive Chairman+61 8 9485 0990 RFC Ambrian Limited (Nominated Adviser)Mr Stuart Laing+61 8 9480 2506Old Park Lane Capital PLC (Joint AIM Broker)Mr Michael ParnesMr Luca Tenuta+ 44 20 7493 8188Shore Capital Stockbrokers Ltd (Joint AIM Broker)Mr Jerry KeenMr Bidhi Bhoma+ 44 20 7408 4090Casimir Capital (Principal American Liaison)Mr Stephen Silver+1 212 798 1372
Mr Paul Youens / Mr Ed Portman (Media and Investor Relations - United Kingdom) Tavistock Communications +44 20 7920 3150