Quarterly Report December 2013

17 January 2014 TANGIERS PETROLEUM LIMITED Quarterly Report for Period Ending 31 December 2013 The Directors of Tangiers Petroleum Limited ("Tangiers" or the "Company") arepleased to provide the following report on its activities during the quarterended December 2013. 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 The Company launched a recommended off-market takeover bid for Jacka ResourcesLimited ("Jacka"), an ASX listed, Africa focused oil and gas company withinterests in Tunisia, Nigeria, Tanzania and Somaliland. Notification of the signature of the Joint Moroccan Ministerial Order approvingthe assignment of the 50% interest in the Tarfaya Offshore Block andoperatorship to Galp Energia was received. Planning of the initial Tarfaya Offshore Block exploration well, TAO-1,continued. The Company terminated the farm-out agreement with CWH Resources Ltd ("CWH") inrelation to the Bonaparte acreage in Australia as CWH was unable to meet theconditions precedent. As a consequence, the request for a further extension oftime from the National Offshore Petroleum Titles Administrator (NOPTA) wasrefused and 30 days' notice was given to commence the process to cancel thepermits. The notice period was to expire on 12 January 2014. The Company was advised in December by NOPTA that the NT/P83 exploration permitin the Arafura Sea had been cancelled Overview The key operational activities during the quarter were: * the site survey over the proposed TAO-1 location was completed; * Galp Energia continued to advance environmental approval and well planning for TAO-1; * Galp Energia began screening the market for potential rig sharing/sublet options and preparing the invitation to tender documents for the drilling rig. The key corporate activities for the quarter were: * launch of a recommended off-market, takeover offer for Jacka Resources Limited for which the Bidder's Statement is due for lodgement with ASIC and on the ASX announcement platform on 20 January 2014; * completion of the underwriting of the A$0.16 listed options, securing funding of A$7.1 million before costs. * the completion of an investor relations road show from 24 September to 17 October with presentations taking place in Perth, Sydney, Melbourne, Hong Kong and London. Financial The ASX Appendix 5B attached to this report contains the Company's cash flowstatement for the quarter. The significant elements for the period were: * exploration and evaluation expenditure of A$0.272 million (September 2013 A$0.065 million); * administration and other operating costs of A$1.214 million (September 2013 A$0.846 million); * the exercise of 39,656,922 listed options at A$0.16, netting the company A$5.974 million; and * a net cash inflow of A$4.508 million recorded by the company. At the end of the quarter, the Company had net cash reserves of A$6.089 millionexcluding the US$3 million bank guarantee in Morocco. The Moroccan Joint Ministerial Order has been received approving the assignmentand transfer of operatorship of the Tarfaya Offshore Block to Galp Energia, socash reserves will shortly be augmented by US$7.5 million of back costs andreturn of the US$3 million bank guarantee. New Ventures If the Jacka takeover bid is successful, the merged entity will possess aportfolio of highly prospective exploration, appraisal and development acreagein Morocco, Tunisia, Nigeria, Somaliland and Tanzania. The Company continues to review and evaluate selected new venture opportunitiesin offshore shallow water and onshore in various African countries. Tarfaya Offshore Block - Morocco (25%) The Tarfaya Offshore Block (Figure 2), Morocco comprises eight contiguouspermits covering an area of 11,281 sq km. The Tarfaya Block is situatedapproximately 600 km southwest of Morocco's capital, Rabat, inboard of theCanary Islands on the Atlantic Margin. The Block contains multiple prospectsand leads within Jurassic sediments as well as potential within the Tertiary,Cretaceous and Triassic Formations. During the quarter, environmental studies were advanced, the TAO-1 well sitesurvey was completed and detailed planning for the well continued. Galp Energia was assigned its 50% interest in the Block and became operator.Tangiers retains a 25% interest in the Tarfaya Offshore Block. The Assaka 3D seismic data covers the Trident, Assaka and TMA prospects,certified by Netherland, Sewell & Associates, Inc (NSAI). The La Dam prospectin the south of the Tarfaya Block is covered by a 580 sq km 3D seismic surveyacquired in 2006 and reprocessed in 2011 by the Company. The combined totalbest estimate net (25% basis) prospective resource for the four Jurassicprospects in the Tarfaya block is 217 million barrels. WA-442-P (Turtle) and NT/P81 (Barnett) (90% and Operator) These two contiguous exploration permits encompass 3,900 sq km and are locatedapproximately 20 km offshore in the Commonwealth waters off the coasts ofWestern Australia and Northern Territory, approximately 320 km southwest ofDarwin. In October the Company terminated the Farm-Out Agreement with CWH Resources Ltdas the conditions precedent were not satisfied. A further extension of time wasrequested from NOPTA to allow the Company to seek another farminee. Theextension was not granted and notification was received from NOPTA that thepermits may be cancelled. NT/P83 Exploration Permit, Offshore Darwin, Arafura Sea (100% and Operator) The Company received notification that this permit was cancelled in December2013. Hydrocarbons in Place Summary Detailed below are the estimated oil estimates for the Company's projectinterest. Gross (100%) Tangiers Net Attributable InterestProject Low Best/ High Low Best/ High Operator Mean MeanOil-in-Place Estimates (unrisked) (All figures in millions of barrels) Morocco 1,564 4,335 12,399 25% 391 1,084 3,100 Galp Energia Total 1,564 4,335 12,399 391 1,084 3,100ProspectiveResources Prospective Resources Summary Detailed below are the estimated Prospective Resources delineated across theCompany's project interest. Gross (100%) Tangiers Net Attributable Risk Interest FactorProject Low Best/ High Low Best/ High Operator Mean MeanProspective Oil Resources (unrisked) (All figures in millions of barrels) Morocco 156 867 4,959 25% 39 217 1,240 unrisked Galp Energia Total 156 867 4,959 39 217 1,240ProspectiveResources Qualified Person The information in this announcement was produced by Mr Brent Villemarette whois an Executive Director of Tangiers. Mr Villemarette is a petroleum engineerwith over 30 years of experience and is a member of the Society of PetroleumEngineers. Mr Villemarette has reviewed this announcement and consents to itsrelease. Terminology and standards adopted by the Society of Petroleum Engineers ("SPE")"Petroleum Resources Management System" have been applied in producing thisdocument. 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 are estimated,on a given date, to be potentially recoverable from undiscovered accumulations. 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