TIDMTRP
RNS Number : 2203Y
Tower Resources PLC
20 August 2018
20 August 2018
Tower Resources plc
Cameroon Operational Update
Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)),
the AIM listed oil and gas company with its focus on Africa, is
pleased to provide the following operational update on its work on
the Thali licence in Cameroon, conducted through its wholly owned
subsidiary Tower Resources Cameroon SA.
The Company has completed its Environmental and Social Impact
Assessment ("ESIA") in respect of its intended drilling on the
Thali block, including the well that the Company is currently
preparing to drill on the Njonji structure. The Company submitted
its report to the Government in late June, which was then the
subject of public hearings in July, and the Company received its
certificate of environmental compliance on 6(th) August 2018. This
certificate is valid for drilling operations encompassing multiple
wells in the Thali licence area, subject to operations commencing
over the coming three years.
In addition, the Company has filed its application with the
Ministry of Mines, Industry and Technological Development
("MINMIDT") for an extension of the Initial Exploration Period of
the Thali licence of up to one year from its current expiration
date of 14 September 2018, as permitted under the Company's
production-sharing agreement ("PSA"), for the purpose of completing
the well currently being prepared on the Njonji structure. The
Company does not expect to receive a formal response from MINMIDT
until September, but believes the extension will be granted given
progress to date, and the terms of the PSA.
Finally, the Company has conducted a considerable amount of
geological and geophysical ("G&G") work in respect of the Thali
block since receiving the reprocessed 3D seismic data rather later
than expected in April, and has been sharing that work as completed
with Oilfield International Ltd ("OIL") the independent consultancy
which the Company has retained to compile a Reserves Report. The
Company and OIL had originally planned to complete this work, and
OIL's work, earlier in the summer. However, the G&G work has
expanded and is now expected to be complete in September, which
will permit a more comprehensive report from OIL.
The additional work arises for two main reasons. First, the
initial interpretation of the reprocessed 3D data appears to
indicate that the gross intervals of key reservoirs increase toward
the South and/or West of the original NJOM-1 well drilled by Total
in 2008, but it is difficult to judge the amount of the increase in
the reservoir intervals from the data in its present form. Second,
the improved resolution of the reprocessed 3D has provided a
clearer definition of the faults which potentially separate the
fault block compartments in Njonji, but has also raised questions
over whether some of the faults which were originally thought to
separate the different compartments are actually sealing or not,
raising the attractive possibility of fewer, larger fault block
compartments at Njonji than the five originally interpreted by
Total and the Company. Both these questions will ultimately be
answered by drilling, but further analysis will be of interest to
shareholders, and also will help the Company in refining the well
location and in planning subsequent decisions, notably well
testing.
The Company is, therefore, currently undertaking further
petrophysical analysis of nearby wells, and using the
sonic/density/deep induction logs to enhance the seismic data to
better match the well log spectrum. This process emphasises the
higher frequencies and should provide a significant improvement in
resolution. The Company is also refining its depositional model
with more focused and detailed thickness mapping, which will help
us to better evaluate the reservoir interval changes in 3D.
Finally, the Company has retained Dr Tim Needham of The University
of Leeds Institute of Applied Geoscience to undertake a fault seal
analysis; Dr Needham is widely acknowledged as a leading expert in
this field.
The Company currently expects that this additional work will be
completed around the end of August and the results made available
to OIL for incorporation into its Reserves Report which OIL are now
targeting for completion during September.
The Reserve Report will also contain risked volumetric and
financial evaluations of the other main oil prospects that we have
identified on the Thali licence, including the fault blocks on
Thali to the South of Perenco's producing Dissoni North field, and
also prospects identified in the Idenao East structure in the North
East of the licence area, which are substantial. The reprocessed 3D
seismic data has also provided us with a clearer view of the deeper
prospectivity of the block, which we are also now analysing, but
this will not form part of the Reserve Report.
Whilst the G&G work is being completed, the Company is also
in the process of negotiating rig and associated service contracts
for the upcoming Njonji well, having selected a provisional well
location and conducted initial preparatory work including well
engineering.
Jeremy Asher, Chairman & CEO, remarked:
"We are happy with the progress being made on the Njonji well.
The Board would like to see the Reserves Report as soon as
possible, but we felt that this additional work was required to
inform the best decision regarding the final well location, and
should also positively impact the quality of the Reserves Report
when complete."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Contacts
Tower Resources plc +44 20 7157 9625 info@towerresources.co.uk
Jeremy Asher, Chairman
and CEO
Andrew Matharu, VP Corporate
Affairs
SP Angel Corporate Finance
LLP
Nominated Adviser and
Broker +44 20 3470 0470
Stuart Gledhill
Caroline Rowe
Notes:
Tower Resources Cameroon S.A, a wholly-owned subsidiary of Tower
Resources plc, holds a 100% interest in the shallow water Thali
(formerly known as "Dissoni") Production Sharing Contract (PSC), in
the Rio del Rey basin, offshore Cameroon. Tower was awarded the PSC
on 15 September 2015 for an Initial Exploration Period of 3
years.
The Thali PSC covers an area of 119.2 km(2), with water depths
ranging from 8 to 48 metres, and lies in the prolific Rio del Rey
basin, in the eastern part of the Niger Delta. The Rio del Rey
basin has, to date, produced over one billion barrels of oil and
has estimated remaining reserves of 1.2 billion barrels of oil
equivalent ("boe"), primarily at depths of less than 2,000 metres.
The Rio del Rey is a sub-basin of the Niger Delta, an area in which
over 34.5 billion barrels of oil has been discovered, with 2.5
billion boe attributed to the Cameroonian section.
The Thali Block has the potential to hold up to four distinct
oil play systems, including the established play in which three
discovery wells, one gas (Rumpi-1), one oil and gas (Njonji-2) and
one oil (Njonji-1), have already been drilled. Prior to the
interpretation of the recently reprocessed 3D seismic data covering
the block, the most recent contingent Oil-In-Place estimate for the
Njonji discovery was 39 million barrels (Pmean, gross) with an
estimated 7 to 15 million barrels of recoverable oil.
In accordance with the guidelines for the AIM market of the
London Stock Exchange, Dr. Mark Enfield, BSc Geology, PhD Geology,
FGS, Advisor to the Board of Tower Resources plc, who has over 30
years' experience in the oil & gas industry, is the qualified
person that has reviewed and approved the technical content of this
announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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