TIDMTRP
RNS Number : 2705W
Tower Resources PLC
16 April 2019
16 April 2019
Tower Resources plc
Cameroon Operational Update
Proposed Bridging Loan facility and Issue of Warrants
Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)),
the AIM-listed oil and gas company with a focus on Africa, is
pleased to provide an update on operations on the Thali block in
Cameroon, financing and its intention to raise interim finance via
a Bridging Loan Facility ("Bridging Loan").
Cameroon Update
Tower is in the final stages of planning the NJOM3 well, which
will be drilled to a total depth of 1,100 metres intersecting at
least three reservoir zones already identified by the NJOM1B and
NJOM2 discovery wells drilled on the Njonji structure by the
previous operator Total. The well is designed to confirm the
greater reservoir thicknesses observed on the reprocessed 3D
seismic in the up-dip area of the structure and also evaluate
additional reservoirs that were not present in the areas where
Total's wells are located. The NJOM3 well is designed to supplement
Total's well data with a suite of measurement and logging tools and
drill stem test ("DST") flows to surface. The Company's intention
is then to suspend the well with a view to subsequent completion as
one of four initial production wells on the structure, as envisaged
in the Reserve Report prepared by Oilfield International Limited
("OIL") on 31 October 2018. This first phase of development
envisaged by the Reserve Report, aiming to exploit the 2C
contingent resources (Pmean 18 million barrels oil, gross) already
identified in the structure, aims to provide significant production
to Tower in 2020.
Since the Company's last update, the following operational
progress has been made:
-- The Topaz Driller, the Vantage rig which Tower has contracted
to drill the NJOM3 well, is currently expecting to complete
operations for its current charterer in Gabon in mid-May, which
should make it possible to spud the NJOM3 well in the last week in
May 2019;
-- The final location of the NJOM3 well has been agreed with
Société Nationale des Hydrocarbures ("SNH");
-- A full drilling team is now in place and operating from the
Company's offices in Douala and the AMT logistics base there;
-- All long lead items have now been acquired and all services
contracted on the basis of a late-May spud date, though this date
is still subject to slippage depending on the operations of the
current charterer of the Topaz Driller;
-- A debris survey and other site preparation work are underway; and
-- Anticipated cost of the well remains in previously disclosed
ranges of around $10 million dry hole cost and around $14 million
including well planning and testing.
As previously disclosed, the Company is planning to use a
combination of bank financing and own or partner equity to fund the
first phase of development at Njonji, including the proposed NJOM3
well. The Company has for several months been discussing a loan
facility with a prominent African bank, for the Njonji development
of US$15 million which could be extended to US$50 million, and the
Company is still hopeful that such a facility may be in place by
mid-May. With or without such a facility, the Company has also been
holding discussions with several possible partners for the Thali
license, which the Company also hopes may be concluded in that time
frame. Any one of these options, or a combination of them, could
provide the additional funds required to complete the current
well.
Proposed Bridging Loan Facility
In the meantime, the Company requires additional working capital
whilst the above discussions are completed and today announces its
intention to raise short term financing of up to US$750,000 via a
Bridging Loan from a funder on terms to be confirmed including the
expected issue of warrants to the lender.
A further announcement is expected to be made shortly in
connection with the Bridging Loan.
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 info@towerresources.co.uk
Jeremy Asher
Chairman and CEO
Andrew Matharu
VP - Corporate Affairs
SP Angel Corporate Finance
LLP
Nominated Adviser and Joint
Broker +44 20 3470 0470
Stuart Gledhill
Caroline Rowe
Turner Pope Investments
(TPI) Limited
Joint Broker
Andy Thacker +44 20 3621 4120
Whitman Howard Limited
Joint Broker
Nick Lovering
Hugh Rich +44 20 7659 1234
Yellow Jersey PR Limited +44 20 3735 8825
Tim Thompson
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,
which has been extended for a further year ending 15 September
2019.
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 within 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.
An independent Reserve Report conducted by Oilfield
International Limited (OIL) has highlighted the contingent and
potential resources on the Thali licence and the associated
Expected Monetary Value (EMV) as follows:
-- Gross mean contingent resources of 18 MMbbls of oil across
the proven Njonji-1 and Njonji-2 fault blocks;
-- Gross mean prospective resources of 20 MMbbls of oil across
the Njonji South and Njonji South-West fault blocks;
-- Gross mean prospective resources of 111 MMbbls of oil across
four identified prospects located in the Dissoni South and Idenao
areas in the northern part of the Thali licence;
-- Calculated EMV10s of US$118 million for the contingent
resources, and US$82 million for the prospective resources,
respectively.
In accordance with the guidelines for the AIM market of the
London Stock Exchange, Dr Mark Enfield, BSc, PhD, 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
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END
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