Tamaska Oil and Gas : February 22,2021Acquisition of a 20% Interest in the Talisman Deeps Project Download PDF

ASX Release

22 February 2021

ACQUISITION OF A 20% INTEREST IN THE TALISMAN DEEPS PROJECT

Tamaska Oil & Gas Ltd (TMK) is pleased to announce the acquisition of a 20% interest in the Talisman Deeps Project (Project), located in the offshore Canarvon Basin, north west Australia.

There is a large potential hydrocarbons accumulation upon Talisman Deeps known as Napoleon. A summary of Napoleon is set out in Schedule 1.

TMK's interest in Talisman Deeps was acquired through the acquisition of a 20% shareholding in Skye Napoleon Pty Ltd (JV Company), which owns 100% of the Project comprising all the petroleum rights below 2,700m in offshore petroleum production licence WA-8-L. TMK has a right to convert this 20% shareholding to a 20% direct participating interest in the Project upon a joint venture for the Project being formed. TMK's 20% interest is "heads up", i.e. TMK will contribute to expenditure in accordance with its percentage interest.

JV Company is developing Napoleon up to drill ready status over the next 4 months as follows:

• • An extensive 3D seismic reprocessing program is currently being undertaken by Downunder Geosciences.

• • Upon completion of the 3D reprocessing in April, the subsurface interpretation of Napoleon will be updated.

• • Thereupon, an independent prospective resource estimate will be undertaken in accordance with SPE-PRMS.

• • Detailed well planning and cost estimates are also being undertaken.

TMK currently holds net cash of approximately $2.6 million. It is estimated that TMK will incur costs of approximately A$250,000 in relation to activities necessary to bring the Project to drill ready status.

TMK has entered into a shareholders agreement with Arrochar Pty Ltd, the other shareholder of JV Company, the material terms of which are set out in Schedule 2.

The consideration to acquire the 20% interest in Talisman Deeps is the issue by TMK of 45 million ordinary shares and 45 million performance shares (collectively approximately 9.2% of TMK's share capital post issue). There is no cash consideration. The performance shares convert to ordinary shares on the first to occur of either:

• a) An independent estimate assesses the 2U (P50) prospective recoverable resource of the Napoleon to be greater than 120 million boe (barrels of oil equivalent which is oil plus gas converted at 6mcf = one barrel); or

• b) An authorization for expenditure (AFE) in relation to the first exploration well on Talisman Deeps being issued and TMK resolving to participate in respect of its share of the AFE.

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ASX Release

The terms and issue of the performance shares is subject to ASX approval and TMK shareholder approval. A notice of meeting will be issued to shareholders shortly. In the unlikely event such approval is not obtained, TMK will transfer back a 10% interest in JV Company and retain a 10% interest. The full terms of the performance shares are set out in Schedule 3.

A preliminary estimate of the Napoleon exploration well cost is A$45 million of which TMK's share will be 20% (A$9 million). More detailed well planning and cost estimates are being undertaken by JV Company.

A technical presentation on Napoleon will be released by TMK shortly.

Joseph Graham, a director of TMK, said:

"This is an exceptional opportunity for TMK. Napoleon is large high-quality structure located in a proven productive reservoir in the richest petroleum basin in Australia. We have undertaken extensive technical work and believe that Napoleon is likely to prove to be an outstanding exploration target with large upside for the participants. It has the potential to be one of the most significant and exciting petroleum exploration wells drilled in Australia over the next year."

Proposed Timetable

Set out below is an estimate of the timing of events relevant to the acquisition.

Event	Date
Announcement of the acquisition	22 February 2021
Completion of the acquisition - issue of consideration ordinary shares	24 February 2021
Shareholder meeting to approve issue of consideration performance shares	31 March 2021
Issue of consideration performance shares	31 March 2021

By order of the Board

Brett Lawrence Managing Director Tamaska Oil and Gas Limited

For further information, please contact:	This announcement was authorised for release by:
Brett Lawrence	Brett Lawrence
Managing Director	Managing Director
Tel: [phone]
Email:[e-mail]

102 Forrest Street, Cottesloe WA 6011 | PO Box 453, West Perth WA 6872

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Tel: [phone] Email:[e-mail] | www.tamaska.com.au

ASX Release

Schedule 1

Summary of the Napoleon lead

• 1. Napoleon is located in the premier Barrow-Dampier sub-basin on Australia's North West coast. The lead is an upthrown tilted fault block with closure in the prolific North Rankin Formation.

• 2. Recent seismic mapping and geo-technical studies suggest a large unrisked volume of hydrocarbons, a target of similar significance to the Dorado and Wanaea discoveries.

• 3. Extensive 3D seismic reprocessing by Downunder Geosciences (to improve the imaging of the structure) and basin analysis studies are currently in progress.

• 4. 3D geochemical modelling is being performed, which will evaluate the composition of hydrocarbons and assess their migration and entrapment within the structure.

• 5. Preliminary results of the reprocessed 3D seismic indicate evidence of reservoir and hydrocarbon charge (including the presence of hydrocarbon escape features).

• 6. The reprocessing, basin analysis and geochemical modelling are expected to be completed in April, at which time the subsurface interpretation will be updated and an independent risked prospective resource estimate will be calculated in accordance with SPE-PRMS.

• 7. The preliminary geochemical modelling suggests (mostly) in-situ hydrocarbon charge from Lower to Middle Jurassic (mostly) marine source rocks that remained in the liquid maturity window for a significant period of geological time.

• 8. The preliminary mapping of the intermediate reprocessed seismic data indicates strong amplitudes associated with the North Ranking Formation reservoir. In contrast, the overlaying seal facies are dominated by low amplitudes on top and on the downthrow of the structure.

• 9. The main target is estimated to be at a total vertical depth of approximately 4,500 meters, located in about 80 meters of water depth. Accordingly, the target can be drilled by a jack-up rig.

• 10. Detailed well planning and cost estimates of the lead target are being undertaken, with a preliminary dry-hole cost estimate of A$45 million.

• 11. Additional targets in the overlying Athol Formation and Murat Siltstone may also exist above the primary objective. These offer additional prospectivity within the Lower to Middle Jurassic succession and will be evaluated once final reprocessing data is delivered.

102 Forrest Street, Cottesloe WA 6011 | PO Box 453, West Perth WA 6872

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Tel: [phone] Email:[e-mail] | www.tamaska.com.au

ASX Release

Schedule 2

Significant Terms of Shareholders Agreement

• 1. The business of JV Company will be that of progressing the oil and gas leads and prospects within Talisman Deeps and such other activities as are mutually agreed.

• 2. The Board will comprise three directors, two appointed by Arrochar and one appointed by TMK. All decisions will be made by a simple majority of the Board.

• 3. There is an agreed initial budget for the period to 30 June 2021. Thereafter, JV Company will submit programmes and budgets (which will include estimated expenditures for each month of the budget period) to the Board for approval.

• 4. The costs of the initial budget and all other funding requirements of JV Company will be contributed to pro rata by the Parties in accordance with their percentage Shareholdings by Shareholder loans.

• 5. If a Party does not agree to contribute to a new round of funding then:

  • (a) that round of funding must occur by way of equity contribution at a subscription price per share of $1.00 (Equity Contribution);

  • (b) the current share capital of JV Company (1,500 shares) will undergo a 1,000 for 1 share split such that there are 1,500,000 shares on issue post the share split.

  • (c) Existing Shareholder loans (incurred pro-rata to date) will all be converted to equity at a $1.00 per JV Company share;

  • (d) Each Party will be offered the right to contribute to the Equity Contribution pro rata in accordance with their percentage Shareholding;

  • (e) if a Party elects not to contribute the Equity Contribution (such Party being a Non-Contributing Party) then the other Party (Contributing Party) may elect to provide the amount of the Equity Contribution not to be funded by the Non-Contributing Party and the Non-Contributing Party's Shareholding will be diluted by the shares issued to the Contributing Party;

  • (f) each Party is obliged to meet their share of an agreed round of funding, however there is no penalty (other than dilution as above) for a Party not agreeing to contribute to a new round of funding.

• 6. A Party may freely assign all or part of their percentage Shareholding provided that the acquiring party first enters into a deed of covenant in favour of the other Parties agreeing to comply with the shareholders agreement.

• 7. Upon the Company forming a joint venture over the Project (with a Joint Operating Agreement), TMK may elect to convert its percentage Shareholding into a direct interest in the Project being a participating interest in the Project and the Joint Operating Agreement equal to its percentage Shareholding.

102 Forrest Street, Cottesloe WA 6011 | PO Box 453, West Perth WA 6872

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Tel: [phone] Email:[e-mail] | www.tamaska.com.au