By Alex MacDonald

LONDON--Morocco-focused oil explorer Tangiers Petroleum Ltd. (TPT.AU) said Wednesday it is fully covered for its share of the drilling costs associated with the TAO-1 exploration well in the north African country.

The Australia-listed company, which has partnered with Portuguese energy firm Galp Energia (GALP.LB) to explore for oil off the coast of Morocco, said the cost of drilling the TAO-1 exploration well at the Tarfaya Block is estimated at $73 million. Tangiers Petroleum owns a 25% stake in the block while its partner, Galp, acts as the operator.

Tangiers said it had net cash reserves of A$14.63 million ($13.73 million) at the end of June 30, which included $3 million in Morocco as a bank guarantee. The cash balance doesn't include the reimbursement of $7.5 million in back costs under its farm-out agreement with Galp since this will likely be netted off against Tangiers' share of the drilling costs.

Tangiers raised A$9 million in total during the month of May in two separate share issues of A$5 million and A$4 million to specified wholesale, institutional and other investors.

The company said its exploration costs for the three months ending June 30 rose to A$0.035 million from A$0.019 million the quarter before while administration and other operating costs dropped to A$1.461 million from A$2.268 million for the prior quarter.

Tangier's stock was trading at A$0.22 a share Wednesday, resulting in a market capitalization of A$54 million or $51 million.

Write to Alex MacDonald at

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