Tanganyika Oil Company Ltd. has entered into a definitive agreement pursuant to which Sinopec International Petroleum Exploration and Production Corporation (SIPC) has agreed, subject to the terms of the Support Agreement, to make an offer to acquire all the outstanding common shares of Tanganyika by way of a negotiated take-over bid for C$31.50 per share in cash, which represents a substantial premium to both the recent and historical trading prices of Tanganyika's shares.

The acquisition of the Tanganyika shares will be funded through SIPC's internal resources and is not conditional upon any financing arrangements. SIPC is a wholly owned subsidiary of China Petrochemical Corporation ("Sinopec Group") and undertakes overseas investments and operations in the upstream oil and gas sector. Sinopec Group is China's largest producer and supplier of oil products and major petrochemical products.

The Support Agreement provides for, among other things, customary Board of Directors support, non-solicitation and right to match provisions in favour of SIPC and the payment to SIPC of a termination fee of C$65 million if the acquisition is not completed in certain specified circumstances. The obligation of SIPC to take up and pay for shares pursuant to the Offer is also subject to the receipt of certain approvals from the Government of the People's Republic of China. SIPC has agreed to pay a break-up fee of C$65 million in the event that all approvals required to be obtained by SIPC from the Government of the People's Republic of China in order to complete the Offer are not obtained on or before December 24, 2008 and Tanganyika elects to terminate the Support Agreement.

In connection with the Offer, all of the directors, officers and certain other shareholders representing, collectively, approximately 16.2% of Tanganyika's 65,615,330 shares outstanding (calculated on a fully-diluted basis) have entered into lock-up agreements with SIPC pursuant to which they have agreed to, among other things, tender all of their Tanganyika shares (including Tanganyika shares issued on the exercise of outstanding options and Tanganyika shares represented by Swedish Depository Receipts trading on the OMX Nordic Exchange) to the Offer.

Tags: Sinopacific Group, Tanganyika Oil Company Ltd.