Taipan Resources Inc.

Taipan Resources Inc.

October 15, 2013 08:37 ET

Taipan Resources Inc. Announces Farmout Agreement with Premier Oil plc for Block 2B Onshore Kenya

NAIROBI, KENYA--(Marketwired - Oct. 15, 2013) - Taipan Resources Inc. ("Taipan" or the "Company") (TSX VENTURE:TPN), through its wholly-owned Kenya-based subsidiary Lion Petroleum Corp. ("Lion") is pleased to announce the signing of a binding farmout agreement with Premier Oil Investments Limited ("Premier"), a subsidiary of Premier Oil plc (LSE:PMO) whereby Premier will acquire a 55% participating interest in Block 2B onshore Kenya. Taipan will retain a 45% interest in Block 2B. The Company holds its interest in Block 2B pursuant to a production sharing contract ("PSC") with the Government of the Republic of Kenya.

The principal terms of the farmout agreement are as follows:

  • Premier will pay Taipan's working interest share of the cost of drilling and testing the Pearl-1 prospect and future costs on Block 2B up to a cap of US$ 13.275 million in addition to its working interest share of costs. The total work programme required under the PSC for the First Additional Exploration Period (as defined in the PSC) is estimated at $29.5 million.

  • Premier will provide guarantees for the minimum work and expenditure obligations required under the PSC for the First Additional Exploration Period on Block 2B of US$13.0 million.

  • Premier will pay Lion US$1 million as a reimbursement for back costs.

Lion will retain operatorship of Block 2B during the exploration phase with Premier having the right to assume operatorship of any development.

Mr. Maxwell Birley CEO commented, "We look forward to working with Premier Oil, a company with a strong track record of exploration and development success. The Pearl-1 exploration well is targeting a Tertiary prospect similar to Tullow's Ngamia, Twiga and Ekales discoveries. The Company also has multiple prospects similar to Tullow's Eutko discovery. The Anza Basin is one of the largest Tertiary-age rift-basins of the East African Rift systems that together contain multi-billion barrel oil discoveries. We believe that the 'sweet spot' of the Anza Basin is located on Block 2B."

Completion of the farmout is subject to certain legal conditions, financial audits and other approvals.

About Premier Oil plc

Premier Oil plc (LSE:PMO) is a leading FTSE 250 independent exploration and production company with interests in the North Sea, South East Asia, the Middle East, Africa, Pakistan and the Falkland Islands. Its portfolio of producing assets delivered production of 58,600 boepd in the first half of this year, and it has various projects in the development phase which should increase production to over 100,000 boepd in the medium-term. Premier became active in Kenya in 2011 with the signing of two PSCs for offshore exploration blocks L10A and L10B.

About Taipan Resources Inc.

Taipan Resources Inc. (TSX VENTURE:TPN) is an independent, Africa-focused oil exploration company with interests in Block 1 and Block 2B onshore Kenya through its wholly owned subsidiary Lion Petroleum Corp.

After the farmout, Taipan will hold a 45% working interest in Block 2B (1.35 million acres / 5,464 km2). The Company's 20% working interest in Block 1 (5.497 million acres / 22,246 km2) is operated by East Africa Exploration (Kenya) Ltd, a subsidiary of Afren plc.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain statements contained in this release may be forward-looking statements. Forward-looking are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from the targeted results. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the completion of the farmout with Premier and the potential of prospects located within Block 2B, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Taipan's expectations include the satisfaction of conditions contained in the farmout agreement, receipt of all necessary government approvals, the results of drilling and exploration on Block 2B, as well risks detailed from time to time in the filings made by Taipan with Canadian securities regulators. As a result, Taipan cannot guarantee that any forward-looking statement will materialize and the reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and Taipan will only update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.

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