**A full pdf version of this announcement including tables and images is
available from the Company's website at www.tangierspetroleum.com.au
*Recently completed Independent Resource Report by DeGolyer and MacNaughton for
Project Icewine, on the prolific North Slope of Alaska, estimates potential oil
in place of 8 billion barrels* (gross mean unrisked)
*Estimated recoverable oil potential of 492 million barrels* (gross mean
unrisked)
*Probability of geologic success estimated at 41%
*"Best of Breed" resource concentration confirmed, highlighting excellent
potential 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 (USGS
2013)
*Tangiers has an 87.5% working interest in the Project and will be operator of
99,360 acres
*High impact 3 well drilling campaign testing unconventional and conventional
targets imminent on adjacent acreage north of Project Icewine
*Cautionary Statement: The estimated quantities of petroleum that may be
potentially recovered by the application of a future development project relate
to undiscovered accumulations. These estimates have both an associated risk of
discovery and a risk of development. Further exploration, appraisal and
evaluation are required to determine the existence of a significant quantity of
potentially movable hydrocarbons.
Prospective Resource assessments in this release were estimated using
probabilistic methods in accordance with SPE-PRMS standards.
Tangiers Petroleum Limited ("Tangiers" or the "Company", ASX:TPT, AIM TPET) is
pleased to announce the findings of an Independent Report completed by DeGolyer
and MacNaughton estimating substantial resource potential at its Project
Icewine (the "Project"), located on the North Slope of Alaska. A summary of the
report's findings are tabulated below.
Tangiers' Managing Director, Dave Wall said "The Independent Report by DeGolyer
and MacNaughton has resulted in net mean recoverable unconventional potential
for Tangiers of 431 million barrels of oil. Tangiers believe this indicates
substantial upside potential if the entire project area is productive and/or
mean recovery factor is ultimately higher than that currently estimated. The
validation of the exceptional resource concentration is particularly
significant as this is a first order driver of well performance in successful
liquids rich shale plays like the Eagle Ford and Bakken. The Company
anticipates being able to provide guidance on the conventional oil potential at
the Project later in the year and looks forward to insights from the imminent
drilling program by Great Bear immediately to the north of our acreage."
Table 1: INDEPENDENT ASSESSMENT OF UNCONVENTIONAL PROSPECTIVE RE
SOURCES
Prospect Icewine: Gross Estimated Unconventional Prospective Oil Resources:
HRZ, Hue, Kingak & Shublik Shales
North Slope,
Alaska (Source: DeGolyer & MacNaughton as of December 31, 2014)
Unrisked: Risked: (Chance
of geologic
success 41 %)
Estimate (million Low Best High Mean Risked Mean
bbl):
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 of
geologic circumstances that have likely resulted in enhanced porosity in the
HRZ shale member. This differentiates the HRZ in a positive way from other
successful shale plays and is extremely significant. These circumstances are
broadly described below:
*Restricted depositional environment within the Cretaceous Seaway (that
extended through central North America generating many of its prolific onshore
source rocks)
*Volcanic activity contributed volcanic ash and glass during the deposition of
the HRZ organic shales
*Differential compaction of the organic material on a 30:1 ratio whilst the
volcanic glass, due to its hardness, retained its form
*Post burial diagenesis, (alteration / dissolution), of the volcanic glass
resulted in additional voids/pore space creating enhanced primary porosity in
the HRZ shale
Improved overall porosity will increase the capacity for the HRZ member to
retain hydrocarbons, resulting in exceptional resource concentration. This
resource concentration, or oil in place per acre per foot, is highly
correlative to well performance and ultimate recovery when combined with other
requisite attributes for a successful shale play. Comparative resource
concentration between Tangiers' primary target, the HRZ, and other successful
shale plays is shown below. Significant factors of note are the exceptional
porosity (estimated in the DeGolyer and MacNaughton report) and the oil in
place per 640 acres. This results in a resource concentration per well that is
multiples of the next best shale play in North America, based on likely well
spacing. Whilst it stands to reason that the more resource that can be accessed
by the well bore, the better the recovery factor, this can only be truly proven
by 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 not
migrate and it is possible, by predictive modelling, to target the most
productive part of a shale fairway - the sweetspot. Analysis of fluid
composition and reservoir pressure are essential criteria in the assessment of
shale, and therefore it is crucial to have a profound understanding of the
source rock kinetic model coupled with the regional basin model. Tangiers'
partner and project generator, has analysed substantial data over several years
to validate the predictive model, which indicates that Project Icewine is in
the 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 value
and Thermal of hydrocarbons produced and balance optimal
Maturity 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 is
Kerogen 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 of
Setting 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 hydrogen
Carbon (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 pipeline
and only 35 miles South of Pump Station 1 - provides both year-round
operational access and a direct path to market through existing infrastructure,
meaning that commercialisation can occur inexpensively and quickly, on a
comparative basis.
Internal analysis suggests that the full ~100,000 acre position at Project
Icewine 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 as
is 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
Prospective Ultimate Recovery 57.3 168.5 438.8 219.1
net to TPT (million bbl)
PROJECT ICEWINE LOCATION AND OVERVIEW
Figure 1: Project Icewine Location and Activity Map(please refer to the pdf
version of this announcement available from the Company's website)
Table 5: Project Icewine Highlights
Located in proven, prolific and productive petroleum province which hosts the
largest oil field complex in North America
First Mover Tangiers and partner, Burgundy Xploration, early entrants
Advantage into developing unconventional shale oil play and Brookian
conventional plays on the Alaskan North Slope
Two Highly Unconventional Oil Play: Exceptional resource potential of
Prospective Liquids 492mmbbl, HRZ primary target ticks all boxes
Rich 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 stable
Terms
10 year primary leases with no mandatory relinquishment
12.5% State Royalty (16.5%including ORRI)
Mature Operational year round access - located on Dalton Highway
Infrastructure
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 Wall
Managing Director
Tangiers Petroleum Ltd
88E Price at posting:
3.8¢ Sentiment: Buy Disclosure: Held
(20min delay)