Takeover Bid by Tangiers for Jacka Resources

Takeover Bid by Tangiers for Jacka Resources

Highlights:
* Tangiers Petroleum to acquire Jacka Resources via an off-market takeover bid

* Offer ratio equal to 0.468 Tangiers shares for every Jacka share held

* Tangiers Offer values Jacka shares at $0.112 based on Tangiers last closing price of $0.24 per share on 29 November 2013, being a 56% headline premium to Jacka’s last closing price ($0.072) and 53% premium based on the Jacka and Tangiers 1 month VWAPs

* Jacka Board unanimously recommends shareholders accept the Tangiers Offer in the absence of a superior proposal

* Based on the closing share price of Tangiers on ASX on 29 November 2013, the Offervalues Jacka at approximately $37m on an undiluted basis

* Upon completion of the transaction, existing Tangiers shareholders and Jacka shareholders will own approximately 53% and 47%, respectively, of the issued ordinary shares of the combined entity (on an undiluted basis)

* Creation of a premier small to mid-cap African focused upstream oil and gas company, with pro-forma cash of $8m with a further US$22m

expected to flow in from executed farm-in agreements relating to Tangiers’ Tarfaya Project and Jacka’s Odewayne Project

* Eve Howell to remain as Chairman of Tangiers, with Bob Cassie to become Managing Director of Tangiers upon completion

* Tangiers to provide Jacka with a $2.5m standby loan facility to assist Jacka’s funding in Q1 2014

* Bidder’s and Target’s Statements expected to be lodged by mid January 2014

Tangiers Petroleum Limited (“Tangiers”) (ASX:TPT, AIM: TPET) and Jacka Resources Limited (“Jacka”) (ASX:JKA) are pleased to announce that they have entered into a Bid Implementation Agreement (“BIA”) in respect of an off-market takeover offer to be made by Tangiers for all of the issued ordinary shares in Jacka (“Offer”).

Combining the two companies will deliver a strong portfolio of highly prospective exploration, appraisal and development assets in Africa, including two high impact wells planned for 2014: the TAO-1 exploration well in the Tarfaya block, Morocco and the drilling and testing of Hammamet West-3 sidetrack 2 in Tunisia. The combined entity will also have exposure to a promising near-term offshore Nigerian development project in Aje (OML 113) where the joint venture plans to complete the field development plan by early 2014. Aje is adjacent to the recent Ogo discovery, where the operator, Afren plc, recently announced upgraded recoverable resources of 774 million barrels of oil equivalent and identified a new, deeper hydrocarbon-bearing zone.

The combined entity will also benefit from significant positions in early stage acreage in Somaliland and Tanzania, both of which have attracted strong interest from industry participants.

Key Offer Terms
Under the takeover bid, Tangiers is offering 0.468 Tangiers shares for every Jacka share held. The Offer ratio implies a value of $0.112 per Jacka share based on the closing price of Tangiers shares on 29 November 2013, and represents:

* a 56% premium to Jacka’s last closing price $0.072 based on Tangiers’ last closing price of $0.24 on 29 November 2013

* a 53% premium to Jacka’s 1 month VWAP of $0.0763, based on Tangiers’ 1 month VWAP of $0.2491 (to 29 November 2013)

Upon successful completion of the transaction, existing Tangiers shareholders and Jacka shareholders will own approximately 53% and 47%, respectively (on an undiluted basis), of the issued ordinary shares of the combined entity.

Strong African Focus
A combination of Tangiers and Jacka offers a compelling opportunity for investors seeking exposure to a growth focused ASX and AIM-listed small to mid-cap oil and gas company with multiple projects from high impact exploration to near-term appraisal and development opportunities:

* creation of a premier small to mid-cap African focused upstream oil and gas company with an indicative market cap of c. A$80m;

* accelerated growth through a combined and diversified portfolio of frontier exploration (e.g Morocco, Somaliland and Tanzania)

together with near term appraisal and development opportunities (Tunisia and Nigeria);

* funding in place and/or carried for multiple high impact drilling events throughout 2014 (HW-3, Aje-5 and TAO-1). Morocco will see an

active regional drilling program next year with up to 10 wells to be drilled along the Atlantic margin by the industry;

* combined board and management with extensive E&P experience, including African, drawn from Tangiers and Jacka nominees (e.g. Woodside Energy, Apache Energy and Hardman Resources);

* strong financial position with pro forma cash of approximately $8m and a further US$22m expected to flow in from executed farm-in

agreements relating to Tangiers’ Tarfaya Project and Jacka’s Odewayne Project;

* carried for work programs/drilling at Tarfaya and Odewayne; and

* creation of a stronger and better positioned company with the financial strength to grow via further M&A.

Further details on the assets of Jacka and Tangiers are set out in a presentation available on Tangiers’ website, and full detailed information on the proposed takeover will be included in the bidders statement.

Commenting on the transaction Scott Spencer, Chairman of Jacka said:
“This is a compelling offer for Jacka shareholders, and this transaction will provide a strong platform to pursue the company-transforming exploration opportunities within the portfolio of the merged entity, both in terms of balance sheet and board.

The board and management of Jacka are very focused on the opportunity to create significant value through appraisal and development of the Hammamet West oilfield offshore Tunisia. With this transaction shareholders will also gain exposure to a second near-term opportunity through Tangiers’ Tarfaya prospect,scheduled to be drilled in 2014 offshore Morocco, which is emerging as a leading frontier oil province in Africa”.

Eve Howell, Executive Chairman of Tangiers commented:
“This transaction is consistent with the strategy adopted by the board and management of Tangiers over the past year where efforts have been focused on growth in Africa and building a portfolio which balances low risk, moderate reward development and production opportunities with higher risk, large exploration potential.

Jacka’s portfolio provides diversity to Tangiers’ shareholders with exposure to highly prospective exploration drilling as well as appraisal and development activity in a number of countries over the next two years.”

Source: investegate.co.uk

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