88 Energy Regulatory News (88E)

27 January 2015 TANGIERS PETROLEUM LIMITED Quarterly Report for Period Ending 31 December 2014 The Directors of Tangiers Petroleum Limited ("Tangiers" or the "Company") arepleased to provide the following report on its activities during the quarterended 31 December 2014. A copy of the full quarterly report, including thediagrams referred to in the text and the Appendix 5B (Quarterly Cash FlowReport), is available on the Company's website at www.tangierspetroleum.com Highlights - On 20 November 2014 the Company announced the acquisition ofProject Icewine, comprising an initial 87.5% working interest in 99,360contiguous acres located onshore in the prolific North Slope of Alaska, USA - A placement raising A$1.2 million by issuing 200 million shares at A$0.006per share was completed on 22 October 2014. Overview Key operational activities during the quarter included: - A General Meeting held on 20 October 2014 - Acquisition of Project Icewine which was announced on 20 November 2014 andincluded the following key terms: - Tangiers (through its agent Burgundy Xploration LLC) was announced the highbidder on 90,720 acres at the Alaska North Slope Areawide Sale on 19 November2014 - Upon formal award (expected Q2 2015), Tangiers' wholly owned subsidiary(Accumulate Energy Alaska Inc.) will become operator with an initial 87.5%working interest over a total of 99,360 acres The key corporate activities for the quarter were: - Finalisation of a placement for A$1.2 million at A$0.006 per share. Key Events Subsequent to the Quarter - Notice of a General Meeting to be held on 12 February 2015 was announced on13 January 2015 by the Company. Full details of the Agenda and Business of theMeeting can be accessed on the Company website,http://www.tangierspetroleum.com.au/investor-centre/announcements/. - DeGolyer and MacNaughton were commissioned by the Company toprepare an independent Prospective Resources Report on the unconventionalpotential of Project Icewine the results of which were released to the marketon 19 January 2015. The Independent Report by DeGolyer and MacNaughton hasresulted in an estimated recoverable oil potential net to Tangiers of 431million barrels of oil (mean, unrisked) in the HRZ, Hue, Kingak & Shublikshales.* *Cautionary Statement: The estimated quantities of petroleum that may bepotentially recovered by the application of a future development projectrelate to undiscovered accumulations. These estimates have both an associatedrisk of discovery and a risk of development. Further exploration, appraisaland evaluation are required to determine the existence of a significantquantity of potentially movable hydrocarbons. Prospective Resource assessments in this release were estimated usingprobabilistic methods in accordance with SPE-PRMS standards. Table 1: Independent Assessment of Unconventional Prospective Resources Prospect Icewine: Gross Estimated Unconventional Prospective Oil Resources: North Slope, HRZ, Hue, Kingak & Shublik ShalesAlaska (Source: DeGolyer & MacNaughton as of December 31, 2014) Unrisked: Risked: (Chance of geologic success 41 %)Estimate (million Low Best High Mean Risked Meanbbl):Gross 244.3 446.4 813.2 492.5 200.3Net to Tangiers 213.7 390.6 711.5 430.9 175.3 (WI post award:87.5%) Financial The capital raising announced on 19 September 2014 was approved byshareholders on 20 October 2014. This included the issue of 200,000,000 fullypaid ordinary shares at A$0.006 per share and 12,000,000 unlisted optionsexercisable at A$0.01 on or before 22 October 2017. Funds raised will be usedfor working capital purposes and to fund the assessment of new ventures. The Prospectus associated with the capital raise was released tothe market on 22 October 2014. Following this issue, Tangiers has 452,026,723fully paid ordinary shares on issue. Finalisation of the placement resulted ina capital raise of A$1.2 million. The ASX Appendix 5B attached to this report contains the Company'scash flow statement for the quarter. The significant elements for the periodwere: - exploration and evaluation expenditure of A$0.138m (September 2014 ofA$12.647 million); - administration and other operating costs of A$0.753m (September 2014 ofA$1.552 million); - payment for purchase of prospects (Icewine Acquisition deposit) of A$0.707m; - capital inflow from equity issue of A$1.123m (after costs); and - a net cash outflow of A$0.467m recorded by the Company. At the end of the quarter, the Company had net cash reserves ofA$0.779 million. Project Icewine Highlights The Company, through its agent Burgundy Xploration LLC (BEX),entered into a binding agreement to acquire a significant working interest(87.5%) in a large acreage position on a multiple objective, liquids richexploration opportunity in onshore Alaska, North America, referred to asProject Icewine. Tangiers, (through BEX their co-venture partner), was announcedhighest bidder on 90,720 acres in the November State lease sale for the NorthSlope of Alaska on 19 November 2014. Post award of the acreage in Q2 2015,Tangiers will secure a 99,360 gross contiguous acre position with 86,940 acresnet to the Company. The primary term for the State leases is 10 years with nomandatory relinquishment with a 16.5% royalty. Figure 1: Project Icewine Location Map (please refer to the pdf version ofthis announcement available from the Company's website) Generous exploration incentives are provided by the State of Alaska with up to85% of exploration expenditure in 2015 cash refundable, dropping to 75% mid2016 and thereafter 40%. The primary objective is an untested, unconventional liquids-richshale play in a prolific source rock, the HRZ shale,(Brookian Sequence), thatco-sourced the largest oil field in North America; the giant Prudhoe Bay OilField Complex. Internal modelling and analysis indicates that Project Icewineis located in a high liquids vapour phase sweetspot analogous to thoseencountered in other Tier 1 shale plays e.g. the Eagle Ford, Texas. Conventional play potential can be found at Project Icewine withinthe same Brookian petroleum system and shallow to the HRZ shale and includeshigh porosity channel and deep water turbiditic sands. The Brookianconventional play is proven on the North Slope; the USGS (2013) estimate theremaining oil potential to be 2.1 billion barrels just within the Brookiansequence. Additional conventional potential exists in the deeper Kuparuk sandsand the Ivashuk Formation. Drilling, (2012), in the adjacent acreage to the north confirmed that the HRZshales, along with the underlying Kingak & Shublik shales, were all within theoil window which is extremely encouraging for the unconventional potential atProject Icewine. In addition a conventional oil discovery was reported in theKuparuk sandstones. A Prospective Resources Report by DeGolyer and MacNaughton, was commissionedby Tangiers to evaluate the unconventional resource potential of ProjectIcewine in early December 2014 and was released to the market on 19 January2015; refer to `Key Events Subsequent to the Quarter'. Exit from Tarfaya Offshore Block The planned exit from the Tarfaya Offshore Block has moved forwardconsiderably and the Company anticipates finalisation of the assignment of itsworking interest in the near term. Capital Management During the quarter the Company completed a placement for A$1.2million at A$0.006 per share to sophisticated investors in order to strengthenits balance sheet. The placement was managed by DJ Carmichaels and wasapproved by shareholders on the 20th October 2014. Subsequent to the end of the quarter the Company called for anExtraordinary General Meeting of its shareholders to be held on the 12thFebruary 2015. One of the resolutions put to shareholders for approval is theissue of shares to raise between A$3.5m and A$6m, with the use of funds mainlyfor completion of the acquisition of Project Icewine. Additional Information required under ASX LR 5.4.3 List of petroleum tenements held by Tangiers at quarter ending 31 December2014: Project Acquired Name during theReference Location Company Quarter Disposed of Interest during the QuarterTarfaya Tarfaya Offshore Morocco 25% - - BlockOnshore Project Icewine Alaska 87.5%* Subject to -Alaska, final award by the State ofNorth Slope Alaska ** Tangiers, through their co-venture partner BEX, were announcedhigh bidder in the November 2014 State of Alaska Bid Round which entitles theco-venture to secure the leases on award by State of Alaska (anticipated in Q22015) Unless stated elsewhere in this report, there were no beneficial interestsheld in farm-in or farm-out agreements at the end of the quarter and nobeneficial interest in farm-in or farm-out agreements acquired or disposed ofduring the quarter, and there have been no activities relating to oil and gasproduction or development during the quarter. Sarah Smith Joint Company Secretary Tangiers Petroleum LimitedLevel 2, 5 Ord StreetWest Perth WA 6005, AustraliaPh: + 61 8 9485 0990www.tangierspetroleum.com Contacts RFC Ambrian LimitedAs Nominated AdviserMr Oliver Morse / Ms Trinity McIntyre+61 8 9480 2500 As Corporate Broker Mr Charlie Cryer+44 20 3440 6800