IMO its also highly likely that the merged entity will not own...

IMO its also highly likely that the merged entity will not own Aje.

Note the below section:

"(iii) Nigeria
P.R. Oil and Gas Nigeria Limited (a wholly-owned subsidiary of Jacka), Yinka Folawiyo
Petroleum Company Limited, First Hydrocarbons Nigeria Limited, New Age (African Global
Energy) Limited, Energy Equity Resources Aje Limited and Pan Petroleum Aje Ltd are the
current parties to a joint operating agreement in respect of Mining Lease OML 113 in Nigeria
dated 21 September 2007 (Nigerian JOA).
Under the Nigerian JOA, a change in ownership (directly or indirectly) of more than 50% of a
party results in the other joint venturers being able to exercise pre-emptive rights to acquire
(for cash) that party?s joint venture interest as if it were a transfer of that party?s interest. The
cash value is to be agreed with the party or parties exercising the pre-emptive rights, failing
which it will be determined by an independent expert.
The pre-emptive rights triggered upon such a change of ownership are exercisable within 30
days following notice of the final terms and conditions relating to the proposed change in
control. Importantly, if the change of control transaction does not complete, the pre-emptive
rights also terminate.
Accordingly, if Tangiers becomes entitled to more than 50% of the Shares, then under these
provisions, Jacka?s interest in the Aje Field may be acquired for cash by one or more of the
existing joint venturers. A recent discovery in an adjacent licence and the near-completion of
the Field Development Plan heightens the risk that these pre-emption rights may be
exercised in the event of a change of control of Jacka."

I would be highly surprised if none of the parties exercises their pre-emption rights. In fact, the BOD have also now exposed JKA to these risks even if the merger does not go ahead as the pre-emption rights will become active even if TPT only manage to buy 50%+ of JKA.

I'm also a bit confused by the reasons for this merger.

IMO and looking at timing of monies coming into the business and outgoings, I don't really see how this improves JKA's position.

Current cash of $7m (states this EXCLUDES the impact of transaction costs of close to $2m and repayment of JKA;s loan of $1.7m), so really this is closer to $3-3.5m.

Still a risk of the GALP farmout not getting sign off - unlikely but still a risk but we will know if this risk exists prior to closing of the offer.

GALP farm in only covers upto $33m. I have yet to see anything that suggests the depth that thw eell will be drilled to, but I suspect it will cost at least $40m, probably should provide upto $50m to cover for contingencies, so essentially whilst a carry is great, there is a risk that the well could cost upto $17m more, or around a 1/3rd of the cost to TPT, so maybe around another $5m, or so for the well.

The takeover therefore, does not really provide JKA access to that much more funding. Access to cash would be circa $10.5m plus $3m, with expenditure of $5m going out, so access to around $5.5m.

They had access to this through the convertible loan note facility, which they have allowed to lapse disappointingly, and at least the convertible loan note was guaranteed to have been settled at higher than 11c. With the risk of Aje going, this seems an excessive risk for them to have taken with little real benefit in my eyes. Some access to capital and access to a high risk asset.

Still confused why this is such a compelling offer made by TPT.

I'll certainly be holding off any acceptance until at least March and I'll see where we are then price wise and risk wise.