TIDMTRP
RNS Number : 4424N
Tower Resources PLC
30 September 2021
30 September 2021
Tower Resources plc
Interim Results to 30 June 2021
Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)),
the AIM-listed oil and gas company with its focus on Africa,
announces its Interim Results for the six months ended 30 June
2021.
HIGHLIGHTS
-- January 2021 Placing of 384,615,384 new ordinary shares at
0.325p to raise GBP1.25 million (gross), together with issuance of
one placing warrant for every three placing shares exercisable for
two years at 0.65 pence per share and repayment of the US$500,000
Shard Merchant Capital Ltd loan facility;
-- Up dated resource estimates for the Algoa-Gamtoos license,
offshore South Africa, following the reprocessing of additional 2D
seismic data from Tower's 50% partner and license Operator, New Age
Energy Algoa (Pty) Ltd. The updated resource estimate identified
three separate reservoir targets in the deep-water (Outeniqua
basin) section of the license with a total of 1,411 million boe
Pmean recoverable resources (unrisked). A new lead in the submarine
fan complex in the shallower Gamtoos area of the license was also
identified and is estimated to contain 135 million boe Pmean
recoverable resources (unrisked);
-- March 2021 extension to the US$750,000 Pegasus Petroleum Loan
Facility ("Facility") to 30 November 2021 in exchange for an
increase in production-based payments due to Pegasus from the
Company's Thali license, offshore Cameroon. Interest continued to
accrue at 12% per annum, and the production-based payments were
increased to 3.75% of the contractor share of production if the
Facility was repaid prior to July 15 2021 and 5.00% otherwise.
-- In March 2021 through the Company's subsidiary, Tower
Resources Cameroon SA, Tower received Presidential approval of a
further extension to the First Exploration Period of the Thali PSC,
offshore Cameroon, to May 2022 following the Company having
declared Force Majeure with respect to the PSC a year earlier due
to the Covid-19 pandemic.
-- In May 2021, Tower Resources Cameroon SA received formal c
onfirmation from the Cameroon Minister of Mines, Industry and
Technological Development ("MINMIDT") of the formal extension of
the First Exploration Period of the Thali PSC, offshore Cameroon,
to May 2022. The extension enables the Company to finalise the
schedule for the drilling and testing of the NJOM-3 well;
-- A ruling by the UK's VAT Upper-Tier Tax Tribunal, which
upheld the First-Tier Tribunal's decision in favour of Tower in the
Company's dispute with HMRC regarding its decision to deny the
Company credit for input VAT, was announced in May 2021;
-- June 2021 Subscription for 20,000,000 new ordinary shares at
0.25p to raise GBP50,000 (gross) by the Company's Chairman and CEO,
Jeremy Asher. At the same time the terms of the Facility were
modified so that the higher level of production-based payments due
to Pegasus from the Thali PSC would only come into force if the
Facility were not repaid by 15 August 2021 as opposed to 15 July
2021.
POST REPORTING PERIOD EVENTS
-- In August 2021 the Company announced binding Heads of
Agreement ("HoA") in respect of a farm-out to Beluga Energy Limited
("Beluga") of a 49% non-operating working interest in its Thali PSC
in Cameroon.
The key economic elements of the transaction set out in the HoA
were:
o The farm-out covers US$15 million towards the cost of the
NJOM-3 well that Tower is planning to drill on the Thali block;
o Beluga will receive a 49% working interest in the PSC, subject
to production-based payments to Tower's subsidiary TRCSA amounting
to 10% of the contractor share of production accruing to Beluga
under the PSC;
o The well cost is currently expected to be approximately
US$16.8 million, of which approximately US$3 million has already
been spent;
o Each party will recover costs actually funded and recoverable
under the PSC, pari-passu;
o Tower will effectively contribute its non-recoverable costs in
consideration of the production-based payments referred to
above;
o Costs in excess of U$15 million, and future costs, will be
funded pro-rata with respect to Tower's and Beluga's working
interests.
The HoA were binding subject only to final documentation, a
financing contingency requiring Beluga's shareholders' approval,
and approval of the Minister of Mines, Industry and Technological
Development ("MINMIDT");
-- August 2021 Placing of 352,941,176 new ordinary shares at
0.425p to raise GBP1.5 million (gross). Net proceeds of the Placing
were used to repay the US$750,000 Facility, together with accrued
interest and fees of US$102,500, and to cover working capital
requirements; the repayment of the Facility was made in time to
avoid the higher level of production-based payments which would
have been due had repayment been delayed to November 2021.
-- Finalisation of documentation relating to the farm-out to
Beluga Energy Limited of a 49% non-operating working interest in
the Company's Thali PSC in Cameroon and submission of the
documentation the Minister of Mines, Industry and Technological
Development ("MINMIDT") as per the Cameroon Petroleum Code.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ('MAR'). Upon the publication of this announcement via
Regulatory Information Service ('RIS'), this inside information is
now considered to be in the public domain.
Contacts
Tower Resources plc +44 20 7157 9625
Jeremy Asher
Chairman and CEO
Andrew Matharu
VP - Corporate Affairs
SP Angel Corporate Finance
LLP
Nominated Adviser and Joint
Broker
Stuart Gledhill + 44 20 3470
Caroline Rowe 0470
Novum Securities Limited
Joint Broker
Jon Bellis + 44 20 7399
Colin Rowbury 9400
Panmure Gordon (UK) Limited
Joint Broker
Nick Lovering + 44 20 7886
Hugh Rich 2500
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT FOR THE SIX
MONTHSED 30 JUNE 2021
Dear Shareholder,
The first six months of 2021 have been very positive for our
Company, in marked contrast to the first six months of 2020, and
the progress we have made during this period has, so far, been
carried through the third quarter.
We were delighted to agree the farm-out to Beluga Energy Limited
("Beluga"), and over the last two months we have moved forward with
negotiation of a fresh rig contract and with resumption of
discussions with the service companies to finalise both terms and
schedule for the drilling and testing of the NJOM-3 well.
It took a little longer to finalise the full documentation of
the farm-out than we had hoped but this was still achieved quite
rapidly, and the documents are now with the relevant Cameroon
Government bodies, and also with Beluga's financiers. Beluga
yesterday requested, and we have agreed, a 30-day extension to the
financing contingency which, together with the Cameroon government
approval, are conditions precedent for completion of the farmout,
and we also still have to finalise the escrow agreement with our
lawyers, Watson, Farley & Williams LLP, for funds to be held
prior to disbursements. So although we now expect completion will
not be before the end of October at the earliest, we believe the
transaction remains on track.
At the time of writing, while spudding the well before the
year-end remains theoretically possible, we believe that the most
likely timing for the well is in the first quarter 2022, and we are
still working on the dates which will best fit the combination of
rig and service company schedules and lead times. I should note
that we are presently considering two rigs, one available early in
Q1 2022 and one available later in Q1 2022, in addition to other
rig possibilities, and so we are confident of both rig and service
availability in this period. But we are obviously keen to spud
earlier rather than later if possible.
We have also already begun work on planning the next steps to
reach oil production assuming a successful test result from NJOM-3.
As presently conceived, this would involve the design and drilling
of three further wells deviated into different parts of the Njonji
structure from the NJOM-3 well location, and the completion of the
four wells with wellheads above the water on a simple steel
structure which would also brace the four well conductors. This
would allow easy access to the wellheads for a Mobile Oil
Production Unit ("MOPU") and shuttle tanker.
A significant element on the critical path to oil production is
the specification and procurement of the MOPU, and until it is
secured this also probably represents the largest operational risk
to both schedule and budget for reaching first oil. Therefore we
have already begun discussions with contractors about cooperation
to secure or build a suitable unit as a joint venture, including
the possibility of securing an option on a unit, to be declared
after we have the result of the NJOM-3 well. These negotiations
will reduce significantly the lead time for the next stage of the
Njonji project, assuming the current well achieves its objectives
successfully.
Looking forward outside Cameroon, in South Africa we anticipate
making decisions over the coming months with our joint venture
partner NewAge regarding the timing, specification and financing of
further 3D seismic acquisition over our Algoa-Gamtoos license in
South Africa, with our preferred focus being the leads in the deep
water Outeniqua basin section of the block that contain a combined
unrisked potential recoverable resource of over 1.4 billion boe. We
are also engaging in further basin modelling on our Namibian
blocks, while waiting with interest for the results from Shell and
Total's upcoming wells in the Namibian Orange Basin.
Finally, we were very gratified by the decision of the Upper
Tier Tribunal, which we received in May, to uphold the First Tier
Tribunal's 2019 decision in our favour regarding our eligibility
for VAT and our entitlement to refunds of input VAT, which HMRC now
accepts. This ruling covers our current and future VAT returns and
also the past returns up to the period covered by our original
appeal to the FTT. There are a number of returns for periods after
those covered by the original FTT appeal that are covered by two
further appeals that remain with the FTT, which is why we have not
yet completed eliminated the provision for VAT in our accounts, but
we are hopeful that these will also be resolved satisfactorily in
due course.
Jeremy Asher
Chairman and Chief Executive
30 September 2021
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Six months ended
30 June 2021 30 June 2020
(unaudited) (unaudited)
Note $ $
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Revenue - -
Cost of sales - -
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Gross profit - -
Other administrative expenses (276,150) (364,019)
VAT provision 519,912 135,907
Share-based payment charges incurred on incentivisation of staff
and consultants 9 (153,039) (148,924)
Pre-licence expenditures (274) -
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Total administrative expenses 90,449 (377,036)
Group operating loss 90,449 (377,036)
Finance expense (129,907) (80,651)
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Loss for the period before taxation (39,458) (457,687)
Taxation - -
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Loss for the period after taxation (39,458) (457,687)
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Other comprehensive income - -
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Total comprehensive expense for the period (39,458) (457,687)
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Basic loss per share (USc) 3 (0.00c) (0.04c)
-------------------------------------------------------------------- ----- ----------------- --- -----------------
Diluted loss per share (USc) 3 (0.00c) (0.04c)
-------------------------------------------------------------------- ----- ----------------- --- -----------------
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 2021 31 December 2020
(unaudited) (audited)
Note $
----------------------------------- ----- -------------- -----------------
Non-current assets
Exploration and evaluation assets 4 27,942,083 27,080,202
----------------------------------- ----- -------------- -----------------
27,942,083 27,080,202
Current assets
Trade and other receivables 5 23,275 8,805
Cash and cash equivalents 125,030 10,054
----------------------------------- ----- -------------- -----------------
148,305 18,859
Total assets 28,090,388 27,099,061
----------------------------------- ----- -------------- -----------------
Current liabilities
Trade and other payables 6 3,256,877 3,796,111
Borrowings 7 870,645 1,262,937
----------------------------------- ----- -------------- -----------------
4,127,522 5,059,048
Non-current liabilities
Borrowings 7 54,906 68,763
----------------------------------- ----- -------------- -----------------
54,906 68,763
Equity
Share capital 8 18,259,833 18,254,040
Share premium 8 147,107,600 145,343,446
Retained losses (141,459,473) (141,626,236)
----------------------------------- ----- -------------- -----------------
23,907,960 21,971,250
----------------------------------- ----- -------------- -----------------
Total liabilities and equity 28,090,388 27,099,061
----------------------------------- ----- -------------- -----------------
Signed on behalf of the Board of Directors
Jeremy Asher
Chairman and Chief Executive
29 September 2021
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share (1) Share-based Retained Total
capital premium payments losses
reserve
$ $ $ $ $
At 1 January 2020 18,251,117 144,294,128 7,659,308 (148,452,837) 21,751,716
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
Shares issued for cash 1,748 653,757 - - 655,505
Shares issued on settlement of third-party
fees 70 26,150 - - 26,220
Shares issued on settlement of staff - - - - -
remuneration
Share issue costs - (58,996) - - (58,996)
Total comprehensive income for the period - - 177,107 (457,687) (280,580)
At 30 June 2020 18,252,935 144,915,039 7,836,415 (148,910,524) 22,093,865
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
Shares issued for cash 517 202,838 - - 203,355
Shares issued on settlement of third-party - - - - -
fees
Shares issued in settlement of loan
interest 588 225,568 - - 226,156
Share issue costs - 1 - - 1
Total comprehensive expense for the period - - 350,922 (903,049) (552,127)
At 31 December 2020 18,254,040 145,343,446 8,187,337 (149,813,573) 21,971,250
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
Shares issued for cash 5,521 1,767,869 - - 1,773,390
Shares issued on settlement of third-party
fees 273 88,330 - - 88,603
Shares issue costs - (92,045) - - (92,045)
Total comprehensive income for the period - - 206,221 (39,458) 166,763
At 30 June 2021 18,259,833 147,107,600 8,393,558 (149,853,031) 23,907,960
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
(1) The share-based payment reserve has been included within the retained loss reserve and is a non-distributable reserve.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Six months ended
30 June 2021 30 June 2020
(unaudited) (unaudited)
Note $ $
----------------------------------------------------------------------- ----- ----------------- -----------------
Cash outflow from operating activities
Group operating profit / (loss) for the period 90,449 (377,036)
Share-based payments 9 206,221 148,924
Finance costs 4 (769) -
----------------------------------------------------------------------- ----- ----------------- -----------------
Operating cash flow before changes in working capital 295,901 (228,112)
(Increase) / decrease in receivables and prepayments (14,470) 6,993
(Decrease) / increase in trade and other payables (539,234) 861,314
----------------------------------------------------------------------- ----- ----------------- -----------------
Cash used in operating activities (257,803) 640,195
----------------------------------------------------------------------- ----- ----------------- -----------------
Investing activities
Exploration and evaluation costs 4 (861,881) (1,290,678)
Net cash used in investing activities (861,881) (1,290,678)
----------------------------------------------------------------------- ----- ----------------- -----------------
Financing activities
Cash proceeds from issue of ordinary share capital net of issue costs 8 1,769,947 622,729
Proceeds from drawdown of borrowing facilities 7 - 61,596
Repayment of borrowing facilities (501,154) -
Repayment of interest on borrowing facilities (35,142) -
Effects of foreign currency movements on borrowing facilities 1,010 (476)
----------------------------------------------------------------------- ----- ----------------- -----------------
Net cash from financing activities 1,234,660 683,849
----------------------------------------------------------------------- ----- ----------------- -----------------
Increase in cash and cash equivalents 114,976 33,366
Cash and cash equivalents at beginning of period 10,054 38,662
----------------------------------------------------------------------- ----- ----------------- -----------------
Cash and cash equivalents at end of period 125,030 72,028
----------------------------------------------------------------------- ----- ----------------- -----------------
NOTES TO THE INTERIM FINANICAL INFORMATION
1. Accounting policies
a) Basis of preparation
This interim financial report, which includes a condensed set of
financial statements of the Company and its subsidiary undertakings
("the Group"), has been prepared using the historical cost
convention and based on International Financial Reporting Standards
("IFRS") including IAS 34 'Interim Financial Reporting' and IFRS 6
'Exploration for and Evaluation of Mineral Reserves', as adopted by
the European Union ("EU").
The condensed set of financial statements for the six months
ended 30 June 2021 is unaudited and does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. They
have been prepared using accounting bases and policies consistent
with those used in the preparation of the audited financial
statements of the Company and the Group for the year ended 31
December 2020 and those to be used for the year ending 31 December
2021. The comparative figures for the half year ended 30 June 2020
are unaudited. The comparative figures for the year ended 31
December 2020 are not the Company's full statutory accounts but
have been extracted from the financial statements for the year
ended 31 December 2020 which have been delivered to the Registrar
of Companies and the auditors' report thereon was unqualified and
did not contain a statement under sections 498(2) and 498(3) of the
Companies Act 2006.
This half-yearly financial report was approved by the Board of
Directors on 29 September 2021.
b) Going concern
The Group will need to raise further funds sufficient to meet
its financial and operating commitments for the 12-month period
commencing immediately subsequent to the date of signature of these
interim financial statements and is planning to do this
through:
-- Completion of the Beluga Energy Limited farmout transaction
for which heads of agreement were signed and announced on 10 August
2021; and
-- A farm-out of its South African license sufficient to cover
its share of 3D acquisition work programme costs which are
approximately GBP2 million; or
-- Receipt of further funds from the exercise of warrants or the
issuance of shares in order to provide partial funding of the
proposed 3D acquisition work programme in South Africa.
The Directors are confident that the above initiatives will be
concluded satisfactorily within the necessary timeframes and the
financial statements have, therefore, been prepared on a going
concern basis.
There can, however, be no guarantee that the required funds may
be raised or transactions completed within the necessary
timeframes. Consequently, a material uncertainty exists that may
cast doubt on the Group's ability to continue to operate and to
meet its commitments and discharge its liabilities in the normal
course of business for a period of not less than twelve months from
the date of this report. The financial statements do not include
the adjustments that would result if the Group was unable to
continue in operation such as the impairment of the exploration
assets.
2. Operating segments
The Group has two reportable operating segments: Africa and Head
Office. Non-current assets and operating liabilities are located in
Africa, whilst the majority of current assets are carried at Head
Office. The Group has not yet commenced production and therefore
has no revenue. Each reportable segment adopts the same accounting
policies. In compliance with IAS 34 'Interim Financial Reporting'
the following table reconciles the operational loss and the assets
and liabilities of each reportable segment with the consolidated
figures presented in these Financial Statements, together with
comparative figures for the period-ended 30 June 2020.
Africa Head Office Total
Six months Six months Six months Six months Six months Six months
ended ended ended ended ended ended
30 June 2021 30 June 2020 30 June 2021 30 June 2020 30 June 2021 30 June 2020
$ $ $ $ $ $
---------------------- -------------- -------------- -------------- -------------- -------------- --------------
Loss by reportable
segment (65,611) 11,608 105,069 446,079 39,458 457,687
Total assets by
reportable segment
(1) 27,954,857 25,624,797 135,531 100,180 28,090,388 25,724,977
---------------------- -------------- -------------- -------------- -------------- --------------
Total liabilities by
reportable segment
(2) (2,384,500) (1,313,963) (1,797,928) (2,317,149) (4,182,428) (3,631,112)
---------------------- -------------- -------------- -------------- -------------- -------------- --------------
(1) Carrying amounts of segment assets exclude investments in
subsidiaries.
(2) Carrying amounts of segment liabilities exclude intra-group
financing.
3. Loss per ordinary share
Basic & Diluted
30 June 2021 31 December 2020
(unaudited) (audited)
$ $
----------------------------------------------------------------------- ---- -------------- -----------------
Loss for the period 39,458 457,687
Weighted average number of ordinary shares in issue during the period 1,699,278,182 1,190,700,446
Dilutive effect of share options outstanding - -
Fully diluted average number of ordinary shares during the period 1,699,278,182 1,190,700,446
Loss per share (USc) 0.00c 0.04c
----------------------------------------------------------------------------- -------------- -----------------
4. Intangible Exploration and Evaluation (E&E) assets
Exploration and evaluation assets Goodwill Total
Period-ended 30 June 2021 $ $ $
---------------------------------- ------------ -------------
Cost
At 1 January 2021 99,088,664 8,023,292 107,111,956
Additions during the period 861,881 - 861,881
At 30 June 2021 99,950,545 8,023,292 107,973,837
------------------------------- ---------------------------------- ------------ -------------
Amortisation and impairment
At 1 January 2021 (72,008,462) (8,023,292) (80,031,754)
At 1 January and 30 June 2021 (72,008,462) (8,023,292) (80,031,754)
------------------------------- ---------------------------------- ------------ -------------
Net book value
At 30 June 2021 27,942,083 - 27,942,083
At 31 December 2020 27,080,202 - 27,080,202
------------------------------- ---------------------------------- ------------ -------------
In accordance with the Group's accounting policies and IFRS 6
the Directors' have reviewed each of the exploration license areas
for indications of impairment. Having done so, based on the
financial constraints on the Group, and specific issues associated
with each license it was concluded that a full ongoing impairment
was only necessary in the case of the Zambian licenses 40 and 41,
the circumstances of which have not changed since previous
reporting period.
The additions during the period represent $600k (2020: $1.2
million), $197k in South Africa (2020: $80k), $77k in Namibia
(2020: $21k) and $nil in Zambia (2020: $nil). The focus of the
Group's activities during this period has been on preparing for and
acquiring inventory and services with respect to the anticipated
drilling of the Njonji-3 appraisal well.
5. Trade and other receivables
30 June 2021 31 December 2020
(unaudited) (audited)
$ $
----------------------------- -------------- -----------------
Trade and other receivables 23,275 8,805
----------------------------- -------------- -----------------
Trade and other receivables comprise prepaid expenditures.
6. Trade and other payables
30 June 2021 31 December 2020
(unaudited) (audited)
$ $
--------------------------------- -------------- -----------------
Trade and other payables 512,810 531,253
Work programme-related accruals 1,982,683 1,882,999
Other accruals 122,968 149,930
VAT payable 638,416 1,231,929
3,256,877 3,796,111
--------------------------------- -------------- -----------------
The future ability of the Group to recover UK VAT was confirmed
by the Upper Tier Tribunal in its judgement in favour of the
Company on 20 May 2021 and is no longer the subject of a dispute
with HMRC. Previously, on 8 July 2019, the Company had received an
initial judgement in its favour from the First-Tier Tribunal (Tax
Chamber). HMRC have chosen not appeal this latest ruling against
them.
This ruling covers the Group's current and future VAT returns
and also the past returns up to the period covered by our original
appeal to the First Tier Tribunal ("FTT"). There are a number of
returns for periods after those covered by the original FTT appeal
that are covered by two further appeals that remain with the FTT,
which is why the Directors have made the judgement to continue to
provide against certain recoverable amounts until such time as the
case has been formally closed. The Company has, therefore,
continued to provide against $638k / GBP461k (2020: $1.2 million /
GBP903k) of VAT recoverable within these financial statements.
Work programme-related accruals of $2.0 million (2020: $1.9
million) comprise $1.1 million with respect to Cameroon (2020: $1.1
million) and $900k with respect to South Africa (2020: $758k).
7. Borrowings
Group
30 June 2021 31 December 2020
(unaudited) (audited)
$ $
-------------------------------------------- -------------- -----------------
Principal balance at beginning of period 1,338,726 770,480
Amounts drawn down during the period - 561,742
Amounts repaid during the period (501,154) -
Currency revaluations at year end 1,004 6,504
-------------------------------------------- -------------- -----------------
Principal balance at end of period 838,576 1,338,726
Financing costs at beginning of year (7,026) 70,010
Changes to financing costs during the year 47,383 (3,013)
Interest expense 81,755 152,372
Interest paid (35,142) (226,382)
Currency revaluations at year end 6 (13)
-------------------------------------------- -------------- -----------------
Financing costs at the end of the year 86,976 (7,026)
Carrying amount at end of period 925,552 1,331,700
-------------------------------------------- -------------- -----------------
Current 870,645 1,262,937
Non-current 54,906 68,763
Repayment dates
30 June 2021 31 December 2020
(unaudited) (audited)
$ $
-------------------------- -------------- -----------------
Due within 1 year 870,645 1,270,960
Due within years 2-5 42,171 55,010
Due in more than 5 years 12,735 5,730
925,552 1,331,700
-------------------------- -------------- -----------------
During the period, the Group and Company entered into no new
facilities (2020: $562k) and repaid its Shard Merchant Capital Ltd
loan in January 2021.
On 21 January 2021, the Company repaid in full the $500k loan
facility with Shard Merchant Capital Ltd. The terms of the Shard
Facility included the issue of 31,446,541 attached three-year
warrants at a strike price of 0.6 pence and 5,761,198 shares to
pre-pay interest charged at 12% per annum. The loan was secured by
a fixed and floating charge over the Company's assets in favour of
Shard Merchant Capital Ltd. The repayment of the loan included
facility transaction costs of $35k. During the period the Company
recognised interest charges totalling $21k (2020: $43k) and made
repayments totalling $535k (2020: $30k).
On 4 March 2021, the Pegasus Petroleum Limited loan facility, to
which Jeremy Asher is a controlling party, was extended to the end
of November 2021. Consideration for the extension comprised an
increase in the production-based payments, the amount depending on
whether the loan would be repaid by 15 July or only in November
2021. Additionally, simple interest would accrue at 12% per annum
pro rata, commencing on 4 March 2021, and would only be paid at the
end of the facility period. The 15 July date was subsequently
extended to 20 August 2021, with the production-based payments
effectively limited to 3.75% of the Contractor share of revenues
from the production sharing contract, net of the Government share
and net of all Petroleum Taxes, and the facility was fully repaid
on 20 August 2021.
8. Share capital
30 June 2021 31 December 2020
(unaudited) (audited)
$ $
--------------------------------------------------------------- ---- -------------- -----------------
Authorised, called up, allotted and fully paid
1,749,911,416 (2020: 1,325,296,032) ordinary shares of 0.001p 18,259,833 18,251,117
--------------------------------------------------------------------- -------------- -----------------
The share capital issues during the period are summarised
below:
Number of shares Share capital at nominal value Share premium
Ordinary shares $ $
-------------------------------------------------- ----------------- ------------------------------- --------------
At 1 January 2021 1,325,296,032 18,254,040 145,343,446
Shares issued for cash 404,615,384 5,521 1,767,869
Shares issued on settlement of third-party fees 20,000,000 273 88,330
Share issue costs - - (92,045)
At 30 June 2021 1,749,911,416 18,259,833 147,107,600
-------------------------------------------------- ----------------- ------------------------------- --------------
9. Share-based payments
In the Statement of Comprehensive Income, the Group recognised the following charge in r 30 June 2021 30 June 2020
espect
of its share-based payment plan:
(unaudited) (unaudited)
----------------------------------------------------------------------------------------
$ $
---------------------------------------------------------------------------------------- ------------- -------------
Share-based payment charges incurred on incentivisation of staff included within
administrative
expenses (153,039) (148,924)
Share-based payment charges incurred on incentivisation of consultants included within
administrative
expenses (11,066) -
Share-based payment charges recharged to subsidiary undertakings on incentivisation of
staff
and consultants (42,116) -
----------------------------------------------------------------------------------------
(206,221) (148,924)
---------------------------------------------------------------------------------------- ------------- -------------
Share-based payment charges incurred on issue of options and warrants as part of loan
financing
facilities included within finance expense - (28,183)
Total share-based payment plan charges for the period (206,221) (177,107)
---------------------------------------------------------------------------------------- ------------- -------------
Options
Details of share options outstanding at 30 June 2021 are as
follows:
Number in issue
--------------------------- ----------------
At 1 January 2021 157,552,800
Awarded during the period 88,000,000
Lapsed during the period (52,800)
----------------------------- ----------------
At 30 June 2021 245,500,000
----------------------------- ----------------
Date of grant Number in issue Option price (p) Latest exercise date
--------------- ---------------- ----------------- ---------------------
26 Oct 16 1,500,000 0.023 25 Oct 21
24 Jan 19 70,000,000 1.250 24 Jan 24
18 Dec 20 86,000,000 0.450 18 Dec 25
01 Apr 21 88,000,000 0.450 01 Apr 26
245,500,000
--------------- ---------------- ----------------- ---------------------
These options vest in the beneficiaries in equal tranches on the
first, second and third anniversaries of grant.
Warrants
Details of warrants outstanding at 30 June 2021 are as
follows:
Number in issue
At 1 January 2021 620,444,335
Awarded during the period 169,939,544
----------------
At 30 June 2021 790,383,879
----------------------------- ----------------
Date of grant Number in issue Warrant price (p) Latest exercise date
--------------- ---------------- ------------------ ---------------------
09 Nov 17 31,853,761 1.000 09 Nov 22
01 Jan 18 2,542,372 1.000 01 Jan 23
01 Apr 18 2,083,333 1.500 01 Apr 23
01 Jul 18 2,272,726 1.780 30 Jun 23
01 Oct 18 4,687,500 1.575 30 Sep 23
24 Jan 19 112,211,999 1.250 23 Jan 24
16 Apr 19 90,000,000 1.000 14 Apr 24
30 Jun 19 4,285,714 1.000 28 Jun 24
30 Jul 19 3,000,000 1.000 28 Jul 24
15 Oct 19 191,347,084 1.000 13 Oct 24
31 Mar 20 49,816,850 0.200 30 Mar 25
29 Jun 20 19,719,338 0.350 28 Jun 25
28 Aug 20 78,616,352 0.600 28 Aug 23
01 Oct 20 10,960,907 0.390 30 Sep 25
01 Dec 20 4,930,083 0.375 30 Nov 25
31 Dec 20 12,116,316 0.450 30 Dec 25
01 Apr 21 16,998,267 0.450 31 Mar 26
01 Jul 21 24,736,149 0.250 30 Jun 26
14 Jan 21 128,205,128 0.325 14 Jan 23
790,383,879
--------------- ---------------- ------------------ ---------------------
10. Subsequent events
10 August 2021: Execution of a binding Heads of Agreement in
respect of a farm-out to Beluga Energy Limited ("Beluga") of a 49%
non-operating working interest in its Thali Production Sharing
Contract in Cameroon, conducted through its wholly-owned subsidiary
Tower Resources Cameroon S.A. The farm-out covers $15 million
towards the cost of the NJOM-3 well that Tower is planning to drill
on the Thali block. Beluga will receive a 49% working interest in
the Production Sharing Contract, subject to production-based
payments of 10%. The well cost is currently expected to be
approximately $16.8 million, of which approximately $3 million has
already been spent. Costs in excess of $15 million, and future
costs, will be funded pro-rata with respect to each party's working
interest.
11 August 2021 : Placing for cash of GBP1.5 million via a
placing of 352,941,176 new ordinary shares of 0.001p each at a
price of 0.425 pence per share, a discount of 14% to the closing
share price on 10 August 2021. Novum Securities Limited ("Novum"),
acted as sole broker on this Placing was appointed to serve as
Joint Broker to the Company going forwards. The Company has used
the net proceeds of the Placing to repay the $750,000 loan facility
from Pegasus Petroleum Ltd (whose ultimate beneficial owner is the
Company's Chairman and CEO, Jeremy Asher) together with accrued
interest and fees of $102,500, and to cover working capital
requirements going forward, which will include; work programme
costs in Namibia (for license PEL 96); South Africa (for the
Algoa-Gamtoos license operated by 50% partner New Age Energy Algoa
(Pty) Ltd and which adjoins the Total-operated blocks 11B/12B);
funding maintenance and planning expenditure in Cameroon to
maintain the long-lead items inventory ready for the commencement
of drilling and testing of the NJOM-3 well, pending completion of
the farm-out with Beluga; and general working capital purposes.
21 September 2021 : Documentation of its farm-out to Beluga of a
49% non-operating working interest in its Thali Production Sharing
Contract in Cameroon, conducted through its wholly-owned subsidiary
Tower Resources Cameroon S.A was finalised, and the package of
documents submitted to the Minister of Mines, Industry and
Technological Development per the Cameroon Petroleum Code.
Completion of the farm-out is still subject to two conditions
precedent: the financing contingency requiring Beluga's
shareholders' approval, and the Minister of Mines, Industry and
Technological Development's approval. The Company would notify the
market when both conditions precedent have been met.
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END
IR LLMFTMTBTBPB
(END) Dow Jones Newswires
September 30, 2021 02:00 ET (06:00 GMT)
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