Tango Petroleum (TNP)

Shares / Stock Code

TNP

Stock Exchange / Sharemarket

ax

Tango Petroleum (TNP) has entered into a farmout agreement with Pass Petroleum LLC (a company registered in California) ("Pass Petroleum") pursuant to which Pass Petroleum granted to the Company the exclusive right to earn a 30% working interest in the Amazon Prospect located in Acadia Parish, Louisiana, United States of America (Amazon Prospect) and the option to earn a 30% working interest in another oil and gas prospect located in Acadia Parish, Louisiana, United States of America (Thames Prospect). The combined potential of these projects are between 500-750 billion cubic feet of gas and 45-65 million barrels of oil. The company was listed on Australian Securities Exchange on 14 December, 2005. Investors can trade Tango Petroleum shares on the Australian Stock Exchange (ASX).

Amazon is a highly prospective onshore oil and gas exploration prospect situated South Louisiana. It has estimated gross recoverable reserve potential of 400-600 billion cubic feet of natural gas and 35-50 million barrels of oil. Drilling is expected to begin in Q3 2010. Tango also has the right, but not the obligation, to participate in the Thames Prospect in South Louisiana ("Thames"). Thames covers an estimated area of 1,200 acres, with an estimated gross recoverable reserve potential of 100-150 billion cubic feet of natural gas and 10-15 million barrels of oil. Should the option to participate in Thames be exercised, drilling is expected to begin in Q4 2010.

Projects

The Amazon Prospect and Thames Prospect are located in the southern onshore part of Louisiana, 63 km from the Gulf Coast with a Tertiary sedimentary section that is greater than 7 km thick and extends over an area of greater than 600,000 sq km. In the onshore part of the basin fluvial to shallow marine sedimentation dominate the Early Oligocene to Late Miocene section. The Oligocene aged Frio Formation and the Miocene age sandstones are prolific gas producing reservoirs in south Louisiana.

Growth faulting and salt tectonics have combined to create thick deposits of Early Oligocene to Late Miocene age sandstone reservoirs throughout the onshore region and structural traps to accommodate significant hydrocarbon accumulations. Onshore south Louisiana contains an active, proven petroleum system involving marine source rocks and associated Tertiary clastic reservoirs. The proven hydrocarbon system extends right across the onshore state of Texas and into the offshore Gulf of Mexico.

Oligocene age sandstones of the Upper Frio Formation form the primary reservoir target in the Amazon Prospect and Thames Prospect. The sands were deposited in a fluvial to shallow marine environment and they form the primary reservoir for many of the hydrocarbon fields in the area.

Oligocene and Early Miocene shales of the Upper Frio and Anahuac formations form proven lateral and top seals for the primary reservoir targets. Many of the existing fields are controlled by faults and they therefore have demonstrated the effectiveness of the regional seals. A critical risk for the fault traps is fault reactivation which may cause breaching of the trap after it has been charged with gas. It should be noted that many of the gas fields are tilted fault blocks that have undergone fault reactivation but have still retained effective fault seal.

A wide range of structural traps and structural / stratigraphic traps exist throughout the region due to the tectonic history of the basin. The majority of fields in the area are either salt induced structures or fault dependent anticlines. The two prospects fall into the later trap type. Regional mapping at the Camerina A Horizon of the Upper Frio Formation shows that the prospects are on trend and have a similar structural trapping style to the adjacent fields.