Taipan Resources Inc.
TSX VENTURE : TPN

May 17, 2012 06:00 ET

Taipan Resources Inc. Announces Proposed Merger With Lion Petroleum Corp, an Oil & Gas Exploration Company With 9.7 Million Gross Exploration Acres Onshore Kenya

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 17, 2012) - Taipan Resources Inc. (TSX VENTURE:TPN) is pleased to announce that the company has entered into an agreement for a proposed merger with Lion Petroleum Corp.

Lion Petroleum Corp. is an independent oil and gas exploration company with interests in 9.7 million gross oil and gas exploration acres in Block 1 and Block 2B onshore Kenya. Lion currently holds a 20% working interest in Block 1 (7.8 million acres gross) which is operated by Afren Plc, and a 100% working interest in Block 2B (1.9 million acres). Total net unrisked prospective resources on the Blocks are 528 million barrels of oil equivalent based upon the NI 51-101 report prepared by Sproule Associates Limited and Afren Plc management estimates.

In consideration for the merger, Taipan will provide Lion Petroleum Corp. with irrevocable bank guarantees to fund the required work program on Block 2B and commitments on Block 1. In addition, the current shareholders and convertible bridge loan holders of Lion Petroleum Corp. will receive 20,124,817 shares of Taipan common stock, representing 39.1% of the outstanding shares of common stock of Taipan in the post-merger corporation.

Mr. Charles Watson, Director of Taipan, commented, "Lion's Block 1 and Block 2B onshore Kenya are highly prospective, world-class, oil and gas exploration blocks. Kenya is at an early and exciting stage in the development of the country's hydrocarbon resources post the first major oil discovery in Kenya, the Ngamia-1 well, announced by Tullow Oil Plc and Africa Oil Corporation in March."

BLOCK 1 ONSHORE KENYA (7.8 MILLION ACRES)

Block 1 is located in northeast Kenya contiguous with the borders of Ethiopia and Somalia and contains the Tarbaj oil seep. The Block is in an extension of the Ogaden basin which in Ethiopia contains approximately 4 trillion cubic feet of natural gas resources. The El Kuran oil discovery in Ethiopia, close to the Block 1 boundary, is planned to be appraised by Africa Oil Corporation and Afren Plc later this year. Lion Petroleum Corp. originally farmed-out a 50% interest in Block 1 to East Africa Exploration, subsequently purchased by Afren Plc, with Afren Plc carrying Lion Petroleum Corp. for up to 600 km of 2D seismic or up to US$6 million in gross cost. Afren has recently elected to exercise its option to increase its interest in Block 1 to 80%, subject to approval of the Kenyan Government, by carrying Lion Petroleum for an additional 600 km of 2D seismic up to a further US$6 million in gross cost. Afren management estimates gross prospective resources of 751 million barrels of oil equivalent on Block 1 (150 mmboe net).

BLOCK 2B ONSHORE KENYA (1.9 MILLION ACRES)

Block 2B is located at the southernmost extension of the northwest-southeast trending Anza Graben, near the juncture with both the Mandera-Lugh and Mochesa Basins. The Block contains both Tertiary and Cretaceous plays. The Tertiary plays are analogous to the Tullow Oil Plc and Africa Oil Corporation Ngamia-1 discovery located in the main Tertiary rift to the west. The Cretaceous plays are a potential extension of the Sudanese oil-productive Melut and Muglad basins. The NI 51-101 report completed by Sproule Associates Limited concludes that Block 2B has 378 million barrels of oil equivalent of unrisked prospective resources with 17 exploration leads.

There is no certainty the transaction will be completed and the closing of the merger is subject to, among other things, signing a definitive merger agreement, approval of the TSX Venture Exchange, completion of satisfactory due diligence, and approval of the Kenyan Government.

About Taipan Resources Inc.

Taipan Resources is actively pursuing the acquisition of international oil and gas exploration and development assets. The company is focused on acquisitions in its core geographic regions: Africa, the Middle East and South America, where opportunities remain for junior oil and gas companies to access large-scale oil and gas resources with significant exploration and development upside. Taipan is traded on the TSX Venture Exchange under the symbol TPN.

The statements contained in this release that are not historical facts are forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from the targeted results. The Company relies upon litigation protection for forward looking statements.

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.

Contact Information

  • Taipan Resources Inc.
    Joel Dumaresq
    Director
    +1 604 336 3193