re: Ann: Recommended Takeover Offer By Tangie...
"However, the drilling could be company-making for the juniors such as Tangiers that are carried on these expensive campaigns in Morocco"
Tangiers chairman fulfils Africa ambitions with A$37mln Jacka deal
By Ian Lyall
December 05 2013, 7:44am
Morocco is expected to become a drilling hotspot over the next year to 18 months, with up to 10 wildcat well expected to be drilled in that period.
Tangiers Petroleum (LON:TPET, ASX: TPT) chairman Eve Howell said recently she wanted to broaden the Africa-focus of the group.
And she is doing just that with the all-paper offer for fellow ASX-listed explorer Jacka Resources (ASX:JKA) in a deal that values the latter at A$37mln.
Jacka investors will receive 468 Tangiers shares for every 1,000 Jacka shares they currently own. So the deal, which has been recommended by the Jacka board, offers its investors a more than 50% premium over the last closing price and the one-month volume average weighted price.
Once complete, Jacka investors will have 47% of the enlarged company and with Tangiers’ backers owning 53%. Howell will remain chairman, while Jacka’s Bob Cassie will become managing director of the new group.
As part of the deal, cashed-up Tangiers will provide Jacka with a $2.5mln standby loan facility to fund the business during the first quarter of 2014.
More importantly, the deal brings together Tangiers’ high-impact Tarfaya project in Morocco, where it holds a 25% stake and is carried on a two well programme, with Jacka’s portfolio in Tunisia, Nigeria, Tanzania and Somaliland.
Upcoming milestones include drilling and testing of Hammamet West-3 sidetrack 2 in Tunisia.
Jacka also has a 5% revenue interest in Nigeria’s Aje field, which has 200mln barrel 2C contingent resource that sits right next to Afren’s (LON:AFR) 774mln barrel Ogo discovery.
The assets in Somaliland and Tanzania are early stage.
The combined entity will be reasonably well funded for a junior with around US$30mln once farm-in agreements agreed by both companies are executed.
Morocco is expected to become a drilling hotspot over the next year to 18 months, with up to 10 wildcat well expected to be drilled in that period.
The first of those, overseen by super-explorer Cairn Energy (LON:CNE), got underway at the end of October and is primed for completion at the end of this month.
For Cairn, and the likes of Genel and Kosmos that are also prospecting in the area, a discovery will probably only add a few pence (or cents) to net asset valuations of these larger independents.
However, the drilling could be company-making for the juniors such as Tangiers that are carried on these expensive campaigns in Morocco.
The AIM-listed group is partnered with Galp Energia of Portugal in a deal with headline value of US$41mln, including back costs of around US$7.5mln.
The plan is to drill the Trident target, with a P50 (50% probability) recoverable resource of 423mln barrels, in the second quarter of next year.
Trident is the largest of four prospects that give a P50 resource total of just shy of 870mln barrels unrisked recoverable oil.
So, success really would move the dial for a business currently valued at US$30mln and which is looking to claw its way to the US$100mln mark.
