Tap Oil Limited reports the acquisition of 75% of the issued capital of Northern Gulf Petroleum Pte Ltd (Northern Gulf) and a capital raising of up to approximately A$82 million. The proceeds of the raising are to facilitate the acquisition and exploration, appraisal and pre-FID engineering costs leading to an FID decision in early 2012. Northern Gulf holds a 40% interest in three petroleum concessions in the Gulf of Thailand.

Acquisition The petroleum concessions include the Manora oil field (estimated at 24 mmbbls1) which was discovered in late 2009 and is actively being appraised. It is expected to reach a development decision in early 2012.

Experienced international operator and operator of the nearby Jasmine field, Pearl Energy, is operator of all of the acquired licences and holds the remaining 60% interest in the petroleum licences.

Consideration for the acquisition includes: • an upfront cash payment of US$25.0m (A$25.4m2); and • US$12.5m (A$12.7m2) in Tap ordinary shares issued by way of placement to the owner of Northern Gulf priced at A$0.95 which is the 10 day volume weighted average price (VWAP) prior to 13 October 2010. These shares are subject to an escrow period of 2 years.

Subsequent payments from Tap to Northern Gulf are contingent on achieving milestones at the Manora project.

Peter Stickland, Tap's Managing Director and CEO said that the acquisition of two oil discoveries and a large exploration acreage position is an excellent fit with Tap's existing portfolio and strategy.

'The Manora oil field is an exciting recent discovery that will be further appraised in 2011 with a final investment decision anticipated in early 2012,' Mr Stickland said.

'The concessions acquired also include the single well Rossukon oil discovery that, alongside the Manora discovery in late 2009, highlights the significant exploration upside in this 31,000km2 exploration area,' he said.

Tap currently sees over 200 mmbbls of cumulative unrisked follow up potential.

Tags: Tap Oil Limited