Proactive Investor article

Tangiers shares spike 12% as Morocco drilling begins

By Ian Lyall June 26 2014, 11:48am

The stock, up almost 50% in the last three months, advanced 1.68p to 15.31p.The stock, up almost 50% in the last three months, advanced 1.68p to 15.31p. Shares in Tangiers Petroleum (ASX:TPT; LON:TPET) rose 12% after it said drilling has begun on the Galp Energia-operated TAO-1 exploration well offshore Morocco. The Ralph Coffman jack-up rig will test up to three stacked targets: Assaka in the Upper Jurassic; the main target Trident in the Middle Jurassic and will move on to TMA if the well is deemed a success. It is expected to take around two months to intersect the first two oil horizons. Tangiers owns 25% of the Tarfaya block that’s host to the TAO well, which is targeting a huge hydrocarbon bounty of 758mln barrels of oil equivalent, or 190mln barrels net to the AIM and ASX-listed group. The TAO-1 well is located within a proven petroleum system and is next to Cairn Energy and Genel Cap Juby heavy oil discovery. TAO-1 is the very definition of a company-maker, particularly when you consider the Tangiers has a market capitalisation of just under £28mln. A 110-metre oil column was discovered on Cap Juby; however, the crude was of the heavy variety, which is more difficult to extract and transport. “This is encouraging, but we think we are in a better position to find light oil,” Tangiers director Steve Staley told Proactive Investors recently. “There are two questions. The first is heavy oil versus light oil, the other is reservoir quality and we have addressed these pre-drill.” Much of this work has focused on the primary Trident target as a thorough analysis of the 3D and 2D seismic data, as well as close inspection of the geology beneath the Atlantic Ocean, identified the drill site for TAO-1. “We have done much to reduce the risk of finding a bad quality reservoir,” said Staley. “We are carrying a 21% chance of success number, but that figure predates a lot of [seismic interpretation] work. “Tangiers did a competent person's report before the 3D was shot and interpreted. “Galp has looked at the chance of success and is running with a substantially higher chance of success.” The stock, up almost 50% in the last three months, advanced 1.68p to 15.31p.