TIDMTRP
RNS Number : 3148N
Tower Resources PLC
31 May 2022
31 May 2022
Tower Resources plc
Preliminary Results to 31 December 2021
Tower Resources plc (the "Company", the "Group" or "Tower"
(TRP.L, TRP LN)), the AIM listed oil and gas company with its focus
on Africa, announces its preliminary results for the 12 months
ended 31 December 2021.
Highlights:
-- Cameroon exploration and evaluation expenditure on the Thali
PSC amounted to $1.3 million (2020: $2.2 million). Extension of the
First Exploration Period of the PSC was granted to 11 May 2022 (and
further extension to 11 May 2023 was subsequently agreed);
-- In Cameroon, the Group also negotiated a farm-out agreement
in respect of the Thali PSC, however the agreement has not to date
been approved by the Government of Cameroon;
-- In South Africa, operator NewAge completed interpretation of
the reprocessing of 4,500 line kms of 2D seismic data on behalf of
the joint venture. The data set incorporated both existing JV data
and further data acquired from the Petroleum Agency of South Africa
("PASA") including lines from the Brulpadda discovery across the
Outeniqua basin to the JV license area at Algoa-Gamtoos. The work
identified a deeper-level slope play similar to that seen at
Brulpadda, with three distinct reservoir sections containing
unrisked Pmean recoverable resources of 1.4 billion barrels of oil
equivalent;
-- In Namibia the Group began basin modelling work as envisaged in the license work plan;
-- The Group received a favourable ruling in the UK from the
Upper Tribunal ("UTTC") supporting the previous (2019) favourable
ruling from the First Tier Tax Tribunal ("FTT") in respect of the
Group's UK VAT position;
-- Administrative costs net of share-based payment charges of
$762k (2020: $508k) include legal fees incurred totalling $263k
(2020: $56k);
-- Cash balance at year-end of $10k (2020: $10k).
Post-reporting period events:
-- 14 January 2022
Placing for cash to raise GBP1.5 million (gross) via a
subscription of 576,923,077 new ordinary shares of 0.001p each at a
price of 0.26 pence per share;
-- 7 February 2022
Announcements by the National Petroleum Corporation of Namibia
("Namcor"), and also operator Shell Namibia Upstream B.V.
("Shell"), and partner QatarEnergy, confirming that the Graff-1
well on PEL 39 has made a discovery in both its primary and
secondary targets, and proved a working petroleum system for light
oil in the Orange Basin, offshore Namibia. The Company provided an
analysis of the implications of this successful well for the
prospectivity of other operators' acreage in Namibia, including its
own, and observed that Tower's net acreage position of 18,637 km2
is believed to be the third largest net acreage position in the
Namibian offshore, after Exxon and Eco Atlantic Oil & Gas;
-- 1 April 2022:
Issue of warrants in lieu of GBP30,000 (in aggregate) of
Directors fees and a further GBP7,500 employment costs, to conserve
the Company's working capital at a strike price of 0.2625 pence,
and exercisable over five years;
-- 9 May 2022:
The Company was notified by the Government of Cameroon of a
further extension of the First Exploration Period of the Thali PSC
to 11 May 2023. The Company also announced that it was negotiating
an LOI with Shelf Drilling for Shelf's Trident VIII jack-up
drilling rig to drill the NJOM-3 well on the Thali block in the
fourth quarter of 2022.
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
Caroline Rowe +44 20 3470 0470
Novum Securities Limited
Joint Broker
Jon Beliss
Colin Rowbury +44 20 7399 9400
Panmure Gordon (UK) Limited
Joint Broker
Nick Lovering
Hugh Rich +44 20 7886 2500
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
During 2021 we continued to encounter problems arising from the
pandemic, but these gradually receded in importance, and by the end
of the year - and even before the conflict in Ukraine - the world
had woken up to the consequences of several years of
underinvestment in the oil and gas industry, with the price of
Brent pushing $80/bbl and European gas prices already reflecting
physical shortages. Since the year-end we have seen the Brent price
for prompt delivery move above $110/bbl, and even forward prices,
which are usually less volatile, have risen substantially, with
Brent for 2025 delivery having increased from below $60/bbl a year
ago to around $80/bbl now.
Naturally, this has increased the potential value of all of our
projects. The prospectivity and value of our license interests in
Namibia and South Africa have also been enhanced both by work that
we and our partners have undertaken in 2021 and in the year to
date, and also by the exciting drilling results achieved by
TotalEnergies and Shell in Namibia during the same period. This
work is discussed in more detail in the Operational Review section
below.
Our Cameroon project is also positively affected by the increase
in oil prices, though this increase also presents us with short
term challenges. Our Njonji development plans on the Thali PSC
represent our path to near-term production, and in that sense are
more sensitive to the increase in oil prices than our other assets
- our internal cash flow projections have certainly improved from
those we presented to shareholders in 2021. However, I should also
emphasise something we have said in the past: that the economics of
the Njonji development are very solid at a wide range of oil
prices, and therefore the positive impact of the current high
prices, while welcome, is not critical. Our priority is to get the
NJOM-3 well drilled, as this is the gateway to the rest of the
development. And with higher oil prices leading to increased
drilling activity around the world, there are also some additional
challenges to address in the form of longer lead times and higher
prices for rigs and services.
The Government of Cameroon has recognised this, in providing us
with a further extension of the First Exploration Period of the
Thali PSC to May 2023, which should give us plenty of time to get
the NJOM-3 well drilled, tested and evaluated before entering the
next Exploration Period. And with this extension in hand, we are
now finalising a binding LOI for a rig to drill the NJOM-3 well
prior to the year-end. As we have already explained in our recent
Cameroon update, although costs have risen a bit, this is somewhat
mitigated by our having already completed a lot of the work for the
well and acquired all the long lead items, which are in place in
our facility in Douala.
At the time of writing, we are in discussions regarding the
final financing arrangements for the well, and as we previously
announced, we do not intend to go forward with the previously
agreed farm-out as originally planned. It now appears that we can
raise some debt financing at the level of our Cameroon subsidiary
to help with the NJOM-3 costs, which (if it can be done) would
obviously be preferable to the asset-level dilution of the farm-out
as originally structured. We do not want to comment further on
these discussions at this stage, and we cannot be certain what the
final arrangements will be, but we do believe that we will be able
to achieve a better overall outcome than the farm-out, while also
avoiding a further approval process.
The remainder of 2022 looks like being a crucial period for our
Company, and I hope it will also be a very successful period.
STRATEGIC REPORT
Our strategy over the past several years has been to focus in
the near term on lower risk appraisal and development within proven
basins where there is still low-risk exploration upside, such as
our Thali PSC in Cameroon, while still maintaining selective
exposure to longer term and high risk/reward exploration in areas
where we have existing relationships, such as Namibia and South
Africa.
Even before the current conflict in Ukraine, markets were
becoming aware by the end of 2021 that the global underinvestment
in exploration and production since 2015 was already having a
profound effect on both oil and gas supply, and on prices. This has
reinforced the benefits, both short and long term, of a strategy
based on achieving short term production as quickly as we can,
while also continuing to develop potential resources for the
future.
Totalenergies' 2020 success in South Africa with its Brulpadda
and Luiperd wells in the Outeniqua basin, and its recent success in
Namibia at Venus-X1 coupled with Shell's recent success in Namibia
with its Graff-1 well, indicate that in Namibia and South Africa we
have chosen promising countries for our exposure to high risk, high
reward exploration. These successes have also resulted in a
renaissance of investor interest in exploration, and especially in
these countries, as both the scale of these opportunities and the
need for the resulting oil and gas over the next decade have become
apparent.
In the near term, our strategy still requires reaching first oil
in Cameroon as soon as possible, especially now that production is
worth so much more than a few years ago. Our Cameroon license also
has substantial exploration upside, but this can only be unlocked
once we have the existing discovery appraised and in
production.
This activity requires financing, and while there is still
non-dilutive financing available (within limits) for producing
assets, the equity requirements for the earlier stages of
exploration and development usually require some trade-offs between
the amount of a project one can retain and the speed with which it
can be developed. We always look at the alternatives of financing
our activity at the asset level, whether via debt or other
non-dilutive financing, or via farm-outs, or at the corporate
level, again with debt or equity, in order to achieve the best
expected outcome for our shareholders.
Although we have both operated and non-operated interests, our
preference is to operate assets, in order to control costs and
timing more directly, and to build up our local relationships and
internal knowledge of reservoirs and petroleum systems, and this
remains the case in 2021 and now.
Over the past few years, keeping costs low and flexible without
losing access to our people and their skills has also been critical
to survival, and we believe will continue to be critical to success
in future - not merely in being able to keep costs to a minimum in
periods where activity is necessarily low, as we have recently
seen, but also in being able to ramp up the resources and
technology we are able to bring to our projects in the future when
needed. This is why our technical-subsurface relationship with EPI,
which has served us well since 2015, and our more recent
relationship with Bedrock Drilling on well design and management,
are an essential part of our strategy.
Finally, as noted in our last annual report, our strategy is to
enable and to support the wider strategic and environmental plans
of each of the countries in which we operate, to increase power
generation from cleaner sources, including both renewables and
natural gas, both to aid economic development and to displace less
efficient diesel and fuel-oil based power generation, and to reduce
imports of liquid fuels by increasing local production where
possible. These countries' strategic plans depend critically on the
continued development of local oil and gas production in the near
term, in order to meet the national goals and COP26 and other
climate commitments which they have set for the next decade.
OPERATIONAL REVIEW
In 2021, much of our activity remained constrained by the impact
of the pandemic and associated travel and other restrictions. In
Namibia and South Africa, where our work programme naturally
comprised more planning activity in any case, this was less of a
problem than in Cameroon, where our original intention had been to
be drilling already. Nevertheless, we were able to make progress on
all three licenses.
In Cameroon the first half of the year was dominated by the
discussions with MINMIDT and the other elements of government in
Cameroon regarding the extension of the initial exploration period
of our PSC in the unusual circumstances, and the negotiation of a
farm-out agreement with Beluga Energy. The discussions with the
government were substantially complete in March and the extension
itself was formalised in May, and we were able to announce the
terms of the farmout in August. Although we worked hard to complete
the farm-out documentation with Beluga as quickly as possible, and
submitted a request to government to approve the farmout in
September, we waited a long time for any feedback on the approval
process (and to date have still not received a formal approval).
However, we used the time to update our drilling plans, and in
particular to advance our planning for the next steps following the
NJOM-3 well, including identifying potential contractors for the
wellhead platform and refining the design, and also identifying
candidates for the Mobile Oil Production Unit ("MOPU") and
potential partners for its provision. At the time of writing our
plan is to drill the NJOM-3 well in the fourth quarter of 2022.
In Namibia, we began basin modelling work as planned, and by the
end of the year we felt ready to begin a more formal piece of work
integrating all the well information and seismic data we could
obtain to understand the subsurface better and to prioritise the
various leads in our license area. This area, spanning three blocks
over 23,297 km2 (gross), is one of the largest acreage positions in
Namibia - we believe that only Exxon and Eco Atlantic, following
their acquisition of the Azinam interests in Namibia, have larger
acreage - and so the importance of the initial subsurface work to
narrow down the areas of interest and to prioritise the leads is
critical. We expect to complete this work by the end of the summer
of 2022 and will have more to say about it at that time. As noted
elsewhere in this report, the success of Shell's Graff-1 well and
TotalEnergies' Venus-X1 well in early 2022 have given this work
additional impetus and excitement since the year-end.
In South Africa, our 50% partner NewAge, as operator of the
Algoa-Gamtoos block, announced in 2021 an update to its resources
estimate following the 2020 reprocessing of 4,500 kms of 2D seismic
together with two post-stacked merged 3D seismic surveys over the
Algoa basin. On the deep-water section of the licence the operator
has identified a deeper level slope play, similar to that seen at
TotalEnergies' Brulpadda discovery in the adjoining blocks in the
Outeniqua basin, with three distinct reservoir sections containing
unrisked Pmean recoverable resources of 1.4 billion barrels of oil
equivalent:
-- A shallow section with 470 million boe recoverable resources;
-- A deeper slope section with 231 million boe recoverable resources;
-- A basin floor fan section with 710 million boe recoverable resources.
In the second half of the year, our focus in South Africa
shifted to preparing for acquisition of additional 3D seismic data
over this promising deep-water prospect in the Outeniqua basin. We
worked with NewAge on the specification and terms of either a
stand-alone survey or participation in a multi-client survey linked
to adjoining acreage. In the event, unresolved environmental issues
delayed one of the surveys in adjoining acreage, and we and our
partners concluded that it would be best to defer the 3D seismic
acquisition while these issues were clarified, a decision which the
Petroleum Authority supported. This remains the next step before we
move into the next phase of the license.
The operator NewAge continued to engage in farmout discussions
supported by Envoi in 2021, and have some interested parties in
discussion at the time of writing. Our own view is that the terms
of a farmout have to be right for us to participate in it, as the
cost of the 3D acquisition is not great (compared to a well, for
example) and the timing is anyway still uncertain, but most
importantly, we believe that the prospect itself has substantial
value.
PRELIMINARY RESULTS FOR THE YEARED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
31 December 2021 31 December 2020
(audited) (audited)
Note $ $
----------------------------------------------------- ----- ------------------ -----------------
Revenue - -
Cost of sales - -
----------------------------------------------------- ----- ------------------ -----------------
Gross profit - -
Other administrative expenses (1,284,136) (755,605)
VAT provision 1,480,683 (174,752)
----------------------------------------------------- ----- ------------------ -----------------
Total administrative expenses 196,547 (930,357)
----------------------------------------------------- ----- ------------------ -----------------
Group operating profit / (loss) 4 196,547 (930,357)
Finance expense 6 (149,248) (430,379)
----------------------------------------------------- ----- ------------------ -----------------
Profit / (loss) for the year before taxation 47,299 (1,360,736)
Taxation 7 - -
----------------------------------------------------- ----- ------------------ -----------------
Profit / (loss) for the year after taxation 47,299 (1,360,736)
----------------------------------------------------- ----- ------------------ -----------------
Other comprehensive income - -
----------------------------------------------------- ----- ------------------ -----------------
Total comprehensive income / (expense) for the year 47,299 (1,360,736)
----------------------------------------------------- ----- ------------------ -----------------
Basic profit / (loss) per share (USc) 10 0.00c (0.11c)
----------------------------------------------------- ----- ------------------ -----------------
Diluted profit / (loss) per share (USc) 10 0.00c (0.11c)
----------------------------------------------------- ----- ------------------ -----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2021 31 December 2020
(audited) (audited)
Note $ $
----------------------------------- ----- ------------------ -----------------
Non-current assets
Exploration and evaluation assets 12 28,780,391 27,080,202
----------------------------------- ----- ------------------ -----------------
28,780,391 27,080,202
----------------------------------- ----- ------------------ -----------------
Current assets
Trade and other receivables 14 8,239 8,805
Cash and cash equivalents 10,227 10,054
----------------------------------- ----- ------------------ -----------------
18,466 18,859
----------------------------------- ----- ------------------ -----------------
Total assets 28,798,857 27,099,061
----------------------------------- ----- ------------------ -----------------
Current liabilities
Trade and other payables 15 2,336,336 3,796,111
Borrowings 16 13,801 1,262,937
----------------------------------- ----- ------------------ -----------------
2,350,137 5,059,048
----------------------------------- ----- ------------------ -----------------
Non-current liabilities
Borrowings 46,548 68,763
----------------------------------- ----- ------------------ -----------------
Total liabilities 2,396,685 5,127,811
----------------------------------- ----- ------------------ -----------------
Net assets 26,402,172 21,971,250
----------------------------------- ----- ------------------ -----------------
Equity
Share capital 17 18,264,803 18,254,040
Share premium 17 148,747,595 145,343,446
Retained losses 18 (140,610,226) (141,626,236)
----------------------------------- ----- ------------------ -----------------
Total shareholders' equity 26,402,172 21,971,250
----------------------------------- ----- ------------------ -----------------
The financial statements of Tower Resources plc, registered
number 05305345 were approved by the Board of Directors and
authorised for issue on 30 May 2022.
Signed on behalf of the Board of Directors
Jeremy Asher - Chairman and Chief Executive
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 2,265 856,595 - - 858,860
Shares issued on settlement of third-party
fees 70 26,150 - - 26,220
Shares issued in settlement of loan
interest 588 225,568 - - 226,156
Share issue costs - (58,995) - - (58,995)
Share-based payment charge for the year - - 528,029 - 528,029
Total comprehensive expense for the year - - - (1,360,736) (1,360,736)
At 31 December 2020 18,254,040 145,343,446 8,187,337 (149,813,573) 21,971,250
------------------------------------------- ----------- ------------ ---------------- -------------- ------------
Shares issued for cash 10,403 3,838,243 3,848,646
Shares issued on settlement of third-party
fees 360 110,068 - - 110,428
Share issue costs - (544,162) (544,162)
Share-based payment charge for the year - - 968,711 - 968,711
Transfer to retained losses - - (6,272,250) 6,272,250 -
Total comprehensive income for the year - - - 47,299 47,299
At 31 December 2021 18,264,803 148,747,595 2,883,798 (143,494,024) 26,402,172
------------------------------------------- ----------- ------------ ---------------- -------------- ------------
(1) The share-based payment reserve has been included within the
retained loss reserve on the consolidated statement of financial
position and is a non-distributable reserve.
CONSOLIDATED STATEMENT OF CASH FLOWS
31 December 2021 31 December 2020
(audited) (audited)
Note $ $
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash outflow from operating activities
Group operating profit / (loss) for the year 196,547 (930,357)
Share-based payments 20 968,711 264,416
Shares issued on settlement of third-party fees 110,428 26,220
----------------------------------------------------------------------- ----- ------------------ -----------------
Operating cash flow before changes in working capital 1,275,686 (639,721)
Decrease in receivables and prepayments 566 44,643
(Decrease) / increase in trade and other payables (1,459,775) 1,980,391
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash (used in) / from operations (183,523) 1,385,313
Interest paid (net) (2,631) (10,916)
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash (used in) / from operating activities (186,154) 1,374,397
----------------------------------------------------------------------- ----- ------------------ -----------------
Investing activities
Exploration and evaluation costs 12 (1,700,189) (2,764,386)
Net cash used in investing activities (1,700,189) (2,764,386)
----------------------------------------------------------------------- ----- ------------------ -----------------
Financing activities
Repayment of loan facilities 16 (1,278,451) -
Proceeds from borrowings 16 - 561,742
Cash proceeds from issue of ordinary share capital net of issue costs 17 3,304,484 799,865
Interest paid 16 (139,516) (226)
----------------------------------------------------------------------- ----- ------------------ -----------------
Net cash from financing activities 1,886,517 1,361,381
----------------------------------------------------------------------- ----- ------------------ -----------------
Increase / (decrease) in cash and cash equivalents 173 (28,608)
Cash and cash equivalents at beginning of year 10,054 38,662
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash and cash equivalents at end of year 10,227 10,054
----------------------------------------------------------------------- ----- ------------------ -----------------
COMPANY STATEMENT OF FINANCIAL POSITION
31 December 2021 31 December 2020
(audited) (audited)
Note $ $
---------------------------------------- ----- ------------------ -----------------
Non-current assets
Loans to subsidiary undertakings 13 17,475,903 15,330,438
Investments in subsidiary undertakings 13 12,307,766 12,307,766
---------------------------------------- ----- ------------------ -----------------
29,783,669 27,638,204
---------------------------------------- ----- ------------------ -----------------
Current assets
Trade and other receivables 14 8,237 8,803
Cash and cash equivalents 6,232 7,236
---------------------------------------- ----- ------------------ -----------------
14,469 16,039
---------------------------------------- ----- ------------------ -----------------
Total assets 29,798,138 27,654,243
Current liabilities
Trade and other payables 15 226,194 1,444,429
Borrowings 16 13,801 1,262,937
239,995 2,707,366
---------------------------------------- ----- ------------------ -----------------
Non-current liabilities
Borrowings 46,548 68,763
Total liabilities 286,543 2,776,129
---------------------------------------- ----- ------------------ -----------------
Net assets 29,511,595 24,878,114
---------------------------------------- ----- ------------------ -----------------
Equity
Share capital 17 18,264,803 18,254,040
Share premium 17 148,747,595 145,343,446
Retained losses 18 (137,500,803) (138,719,372)
Total shareholders' equity 29,511,595 24,878,114
---------------------------------------- ----- ------------------ -----------------
In accordance with the provisions of Section 408 of the
Companies Act 2006, the Company has not presented a statement of
comprehensive income and for the year-ended 31 December 2021 the
Company made a profit of $250k (2020: $247k)
The financial statements of Tower Resources plc, registered
number 05305345 were approved by the Board of Directors and
authorised for issue on 30 May 2022.
Signed on behalf of the Board of Directors
Jeremy Asher - Chairman and Chief Executive
COMPANY 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 (147,154,189) 23,050,364
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
Shares issued for cash 2,265 856,595 - - 858,860
Shares issued on settlement of third-party
fees 70 26,150 - - 26,220
Shares issued on settlement of loan
interest 588 225,568 - - 226,156
Share issue costs - (58,995) - - (58,995)
Share option charge for the year - - 528,029 - 528,029
Total comprehensive expense for the year - - - 247,480 247,480
At 31 December 2020 18,254,040 145,343,446 8,187,337 (146,906,709) 24,878,114
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
Shares issued for cash 10,403 3,838,243 - - 3,848,646
Shares issued on settlement of third-party
fees 360 110,068 - - 110,428
Share issue costs - (544,162) - - (544,162)
Share option charge for the year - - 968,711 - 968,711
Transfer to retained losses - - (6,272,250) 6,272,250 -
Total comprehensive expense for the year - - - 249,858 249,858
At 31 December 2021 18,264,803 148,747,595 2,883,798 (140,384,601) 29,511,595
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
(1) The share-based payment reserve has been included within the
retained loss reserve on the Company statement of financial
position and is a non-distributable reserve.
COMPANY STATEMENT OF CASH FLOWS
31 December 2021 31 December 2020
(audited) (audited)
Note $ $
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash outflow from operating activities
Operating profit for the year 214,817 444,590
Share-based payments 20 968,711 264,416
Shares issued on settlement of third-party fees 110,428 26,220
----------------------------------------------------------------------- ----- ------------------ -----------------
Operating cash flow before changes in working capital 1,293,956 735,226
Increase in receivables and prepayments 566 44,643
(Decrease) / increase in trade and other payables (1,218,235) 248,517
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash from operations 76,287 1,028,386
Interest received 181,658 222,353
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash from operating activities 257,945 1,250,739
----------------------------------------------------------------------- ----- ------------------ -----------------
Investing activities
Loans granted to subsidiary undertakings 13 (2,145,465) (7,919,922)
Impairment of subsidiary undertaking 13 - 5,302,983
----------------------------------------------------------------------- ----- ------------------ -----------------
Net cash used in investing activities (2,145,465) (2,616,939)
----------------------------------------------------------------------- ----- ------------------ -----------------
Financing activities
Repayment of loan facilities 16 (1,278,451) -
Proceeds from loan facilities 16 - 561,742
Cash proceeds from issue of ordinary share capital net of issue costs 17 3,304,484 799,865
Interest paid 16 (139,516) (226)
----------------------------------------------------------------------- ----- ------------------ -----------------
Net cash from financing activities 1,886,517 1,361,381
----------------------------------------------------------------------- ----- ------------------ -----------------
Increase / (decrease) in cash and cash equivalents (1,004) (4,819)
Cash and cash equivalents at beginning of year 7,236 12,055
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash and cash equivalents at end of year 6,232 7,236
----------------------------------------------------------------------- ----- ------------------ -----------------
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
a) General information
Tower Resources plc is a public company incorporated in the
United Kingdom under the UK Companies Act. The address of the
registered office is 134 Buckingham Palace Road, London, SW1W 9SA.
The Company and the Group are engaged in the exploration for oil
and gas.
These financial statements are presented in US dollars as this
is the currency in which the majority of the Group's expenditures
are transacted and the functional currency of the Company and have
been prepared in accordance with UK-adopted International
Accounting Standards, and in compliance with the requirements of
the Companies Act 2006.
b) Basis of accounting and adoption of new and revised standards
Changes in accounting policies
A number of new standards are effective from 1 January 2021 but
they do not have material effect on the Group's financial
statements.
New and amended standards
The following amended standards and interpretation are effective
for financial years commencing on or after 1 January 2022. The
Group does not intend to adopt the standards below, before their
mandatory application date.
Standard Description IASB Issue Date IASB Effective Date Secretary of State
Adoption Date
IAS 37 (Amendments) Onerous Contracts - 14 May 2020 1 January 2022 Endorsed
Cost of Fulfilling a
Contract
------------------------ ----------------- -------------------- -------------------------
IAS 16 (Amendments) Property, Plant and 14 May 2020 1 January 2022 Endorsed
Equipment - Proceeds
before Intended Use.
------------------------ ----------------- -------------------- -------------------------
IFRS 3 (Amendments) Reference to the 14 May 2020 1 January 2022 Endorsed
Contractual Framework.
------------------------ ----------------- -------------------- -------------------------
IAS 1 (amendments) Classification of 23 January 2020 1 January 2023 Endorsed
Liabilities as Current
or Non-current.
------------------------ ----------------- -------------------- -------------------------
IFRS 17 Insurance contracts. 25 June 2020 1 January 2023 Endorsed
------------------------ ----------------- -------------------- -------------------------
IAS 12 (Amendments) Deferred tax related to 7 May 2021 1 January 2023 Endorsed
assets and liabilities
arising from a single
transaction.
------------------------ ----------------- -------------------- -------------------------
IAS 8 (amendments) Definition of 12 February 2021 1 January 2023 Endorsed
accounting estimates.
------------------------ ----------------- -------------------- -------------------------
IAS 1 and IFRS Practice Disclosure of 12 February 2021 1 January 2023 Endorsed
Statement 2 accounting policies.
(amendments)
------------------------ ----------------- -------------------- -------------------------
Future accounting pronouncements
The Company intends to adopt the above listed standards and
interpretations in its financial statements for the annual period
beginning 1 January 2022. The Company does not expect the
implementation to have a material impact on the financial
statements.
c) Going concern
The Group will need to complete its agreed farm-out and/or
another asset-level transaction within the coming months, or
otherwise raise further funds, in order to meet its liabilities as
they fall due, particularly with respect to the forthcoming
drilling programme in Cameroon. The Directors believe that there
are a number of options available to them through either, or a
combination of, capital markets, farm-outs or asset disposals with
respect to raising these funds. There can, however, be no guarantee
that the required funds may be raised or transactions completed
within the necessary timeframes, which raises uncertainty as to the
application of going concern in these accounts. Having assessed the
risks attached to these uncertainties on a probabilistic basis, the
Directors are confident that they can raise sufficient finance in a
timely manner and therefore believe that the application of going
concern is both appropriate and correct.
This point is also discussed in note 2 of the financial
statements
d) Basis of consolidation
The consolidated financial statements incorporate the accounts
of the Company and its subsidiaries and have been prepared by using
the principles of acquisition accounting ("the purchase method")
which includes the results of the subsidiaries from their date of
acquisition. Intra-group sales, profits and balances are eliminated
fully on consolidation.
The results of subsidiaries acquired or disposed of are included
in the consolidated statement of comprehensive income from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group. All intra-group
transactions, balances, income and expenses are eliminated on
consolidation.
As a Consolidated Statement of Comprehensive Income is
published, a separate Statement of Comprehensive Income for the
Parent Company has not been published in accordance with section
408 of the Companies Act 2006.
e) Jointly controlled operations
Jointly controlled operations are arrangements in which the
Group holds an interest on a long-term basis which are jointly
controlled by the Group and one or more ventures under a
contractual arrangement. The Group's exploration, development and
production activities are sometimes conducted jointly with other
companies in this way. Since these arrangements do not constitute
entities in their own right, the consolidated financial statements
reflect the relevant proportion of costs, revenues, assets and
liabilities applicable to the Group's interests.
f) Oil and Gas Exploration and Evaluation Expenditure
Costs incurred before the acquisition of a license or permit to
explore an area are expensed to the income statement.
All exploration and evaluation costs incurred following a
license or permit to explore being obtained or acquired on the
acquisition of a subsidiary are capitalised in respect of each
identifiable project area. These costs are classified as intangible
assets and are only carried forward to the extent that they are
expected to be recouped through the successful development of the
area or where activities in the area have not yet reached a stage
which permits reasonable assessment of the existence of
economically recoverable reserves (successful efforts).
Costs incurred by Directors' and employees of the parent Company
on the exploration activities are recharged to the subsidiaries and
capitalised as exploration assets accordingly.
Other costs are expensed unless commercial reserves have been
established or the determination process has not been completed.
Accumulated costs in relation to an abandoned area are written off
in full against profit in the year in which the decision to abandon
the area is made.
When production commences the accumulated costs for the relevant
area of interest are transferred from intangible assets to tangible
assets as 'Developed Oil and Gas Assets' and amortised over the
life of the area according to the rate of depletion of the
economically recoverable costs.
g) Impairment of Oil and Gas Exploration and Evaluation assets
The carrying value of unevaluated areas is assessed when there
has been an indication that impairment in value may have occurred.
The impairment of unevaluated prospects is assessed based on the
Directors' intention with regard to future exploration and
development of individual significant areas and the ability to
obtain funds to finance such exploration and development.
h) Decommissioning costs
Where a material liability for the removal of production
facilities and site restoration at the end of the field life
exists, a provision for decommissioning is made. The amount
recognised is the present value of estimated future expenditure
determined in accordance with local conditions and requirements. An
asset of an amount equivalent to the provision is also created and
depreciated on a unit of production basis. Changes in estimates are
recognised prospectively, with corresponding adjustments to the
provision and the associated asset.
i) Property, plant and equipment
Property, plant and equipment is stated at cost less
depreciation. Depreciation is provided at rates calculated to write
off the cost less estimated residual value of each asset over its
expected useful life as follows:
Computers and equipment, fixtures, fittings and equipment:
straight line over 4 years
Leasehold and office refurbishment costs: over duration of
lease
The assets' residual values and useful lives are reviewed and
adjusted if necessary, at each year-end. Profits or losses on
disposals of plant and equipment are determined by comparing the
sale proceeds with the carrying amount and are included in the
statement of comprehensive income. Items are reviewed for
impairment if and when events indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount
by which the carrying amount of the asset exceeds its recoverable
amount which is the higher of an asset's net selling price and
value in use.
j) Investments
The Parent Company's investments in subsidiary companies are
stated at cost less any expected credit loss for impairment and are
shown in the Company's Statement of Financial Position.
k) Share-based payments
The Company makes share-based payments to certain Directors,
employees and consultants by the issue of share options or
warrants. The fair value of these payments is calculated either
using the Black Scholes option pricing model or by reference to the
fair value of the remuneration settled by way of the grant of such
options or warrants. The expense is recognised on a straight-line
basis over the period from the date of award to the date of
vesting, based on the Company's best estimate of shares that will
eventually vest.
l) Foreign currency translation
i Functional and presentational currency
Items included in the financial statements are shown in the
currency of the primary economic environment in which the Company
operates ("the functional currency") which is considered by the
Directors to be the U.S Dollar. The exchange rate at 31 December
2021 was GBP1 / $1.3479 (2020: GBP1 / $1.3649).
ii Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the statement
of comprehensive income.
Transactions in the accounts of individual Group companies are
recorded at the rate of exchange ruling on the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rates ruling at the year-end. All
differences are taken to the statement of comprehensive income.
m) Taxation
i Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
statement of comprehensive income because it excludes items of
income or expense that are taxable or deductible on other years and
it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the reporting
date.
ii Deferred taxation
Deferred income taxes are provided in full, using the liability
method, for all temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the
financial statements. Deferred income taxes are determined using
tax rates that have been enacted or substantially enacted and are
expected to apply when the related deferred income tax asset is
realised or the related deferred income tax liability is
settled.
The principal temporary differences arise from depreciation or
amortisation charged on assets and tax losses carried forward.
Deferred tax assets relating to the carry forward of unused tax
losses are recognised to the extent that it is probable that future
taxable profit will be available against which the unused tax
losses can be utilised.
n) Financial instruments
The Group's Financial Instruments comprise of cash and cash
equivalents, loans and receivables. There are no other categories
of financial instrument.
i Cash and cash equivalents
Cash and cash equivalents are carried at cost and comprise cash
in hand, cash at bank, deposits held at call with banks, and other
short-term highly liquid investments with original maturities of
three months or less.
ii Receivables
Receivables are measured at amortised cost unless the time value
of money is immaterial. A provision for impairment of receivables
is established when there is objective evidence that the Group will
not be able to collect all amounts due according to the original
terms of the receivables. The amount of the provision is the
difference between the assets' carrying amount and the recoverable
amount. Expected credit losses for impairment of receivables are
included in the statement of comprehensive income.
iii Payables
Payables are recognised initially at fair values and
subsequently measured at amortised cost using the effective
interest method.
Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the asset of the Group after deducting all of
its liabilities. Equity instruments issued by the Company are
recorded at the proceeds received net of direct issue costs.
o) Share capital
Ordinary shares are classified as equity. Proceeds received from
the issue of ordinary shares above the nominal value are classified
as Share Premium. Costs directly attributable to the issue of new
shares are shown in equity as a deduction from the Share Premium
account.
p) Provisions
Provisions are recognised when the Group has a present
obligation as a result of a past event and it is probable that the
Group would be required to settle that obligation. Provisions are
measured at the managements' best estimate of the expenditure
required to settle the obligation at the reporting date and are
discounted to present value where the effect is material.
q) Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision makers.
The chief operating decision makers have been identified as the
executive Board members.
r) Leases
The Group do not have any leases with a term of 12-months or
more that contain an option to purchase or where the underlying
asset has anything other than a low value and has elected for
exemption to the reporting requirements of IFRS 16 (Leases).
2. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with
International Financial Reporting Standards requires the use of
accounting estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during
the reporting period. Although these estimates are based on
managements' best knowledge of current events and actions, actual
results ultimately may differ from those estimates. IFRS also
require management to exercise its judgement in the process of
applying the Group's accounting policies.
The prime areas involving a higher degree of judgement or
complexity, where assumptions and estimates are significant to the
financial statements, are as follows:
Recoverability of inter-company balances
Determining whether inter-company balances are impaired requires
an estimation of whether there are any indications that their
carrying values are not recoverable details of which are included
in note 13.
Impairment of capitalised exploration and evaluation
expenditure
The future recoverability of capitalised exploration and
evaluation expenditure is dependent on a number of factors,
including whether it successfully recovers the related exploration
and evaluation asset through sale. Factors which could impact the
future recoverability include the level of proved, probable and
inferred resources, future technological changes which could impact
the cost of drilling and extraction, future legal changes
(including changes to environmental restoration obligations),
changes to commodity prices and licence renewal dates and
commitments.
To the extent that capitalised exploration and evaluation
expenditure is determined to be irrecoverable in the future, this
will reduce profits and net assets in the period in which this
determination is made. In addition, exploration and evaluation
expenditure is capitalised if activities in the area of interest
have not yet reached a stage which permits reasonable assessment of
the existence or otherwise of economically recoverable reserves. To
the extent that it is determined in the future that this
capitalised expenditure should be written off, this will reduce
profits and net assets in the period in which this determination is
made. Details of impairments of capitalised exploration and
evaluation expenditure are included in note 12.
VAT receivable
On 21 May 2021 the Company announced that it had received a
favourable ruling from the Upper Tribunal upholding the First-Tier
Tax Tribunal's decision in the Company's favour and dismissing
HMRC's appeal against the First-Tier Tax Tribunal's decision.
The First-Tier Tax Tribunal's decision, which was announced by
the Company in July 2019, allowed the Company's appeal against
HMRC's 2016 decisions to deny it credit for input VAT. The Upper
Tribunal's decision affirmed the First-Tier Tax Tribunal's
decision, and no subsequent appeal was made by HMRC to the Court of
Appeal. There remains a further appeal to the First-Tier Tax
Tribunal by HMRC on procedural grounds which is yet to be heard,
however, the Company does not assess that this appeal has any basis
in fact and has released provisions previously made totalling $1.5
million (2020: provisioned $175k). Included within trade and other
payables (note 15) are amounts totalling $72k / GBP53k (2020: $1.2
million / GBP903k) with respect to UK VAT payable.
Capital markets / going concern
The Group relies on the UK equities market and the market for
equity participations in oil and gas exploration assets in order to
raise the funds required to operate as a listed entity and complete
the respective work programmes for its oil and gas exploration
assets. From time to time, and especially in light of the present
Covid-19 pandemic, general economic and market conditions may
deteriorate to a point where it is not possible to raise equity
finance to fund exploration projects, nor debt to develop
projects.
Additional financing may therefore not be available to the Group
restricting the scope of operations, risking both its long-term
expansion programme, its obligations under contracts which may be
withdrawn or terminated for non-compliance and ultimately the
financial stability of the Group to continue as a going
concern.
Please see note 1 (c) for a more detailed discussion of going
concern matters.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined
by using the Black Scholes model and by reference to the value of
the fees or remuneration settled by way of granting of warrants.
The determination of fair value using the Black Scholes methodology
is based on the input parameters chosen and will therefore contain
an element of judgement and uncertainty. Details of share-based
payment transactions are included in note 20.
3. 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 IFRS 8 'Operating Segments' 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 year-ended 31 December 2021.
Africa Head Office Total
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
------------------------------------ ------------ ------------ ---------- ------------ ------------ ------------
Administrative expenses (1) 73,931 111,635 598,396 (805,452) 672,327 (693,817)
Pre-licence expenditures - - - (243) - (243)
Share-based payment charges - - (475,780) (236,297) (475,780) (236,297)
Interest income - (416) (1,226) 161 (1,226) (255)
Financing costs (643) (117) (147,379) (430,007) (148,022) (430,124)
Gain / (loss) on disposal of
subsidiary undertaking - 1,314,617 - (1,314,617) - -
Loss by reportable segment 73,288 1,425,719 (25,989) (2,786,455) 47,299 (1,360,736)
Total assets by reportable segment
(2 / 3) 28,784,388 27,083,022 14,469 16,039 28,798,857 27,099,061
------------------------------------ ------------ ------------ ---------- ------------ ------------ ------------
Total liabilities by reportable
segment (4) (2,110,144) (2,351,684) (286,541) (2,776,127) (2,396,685) (5,127,811)
------------------------------------ ------------ ------------ ---------- ------------ ------------ ------------
(1) Administrative expenses include credits of $1.4 million
(2020: expense $175k) of VAT provision write-backs following the
successful defence of VAT claims made against the Company by HMRC
at the chambers of the second-tier tax tribunal.
(2) Included within total assets of $28.8 million (2020: $27.0
million) are $14.3 million Cameroon (2020: $13.0 million), $368k
Namibia (2020: $320k) and $14.0 million South Africa (2020: $13.7
million).
(3) Carrying amounts of segment assets exclude investments in
subsidiaries.
(4) Carrying amounts of segment liabilities exclude intra-group
financing.
4. Group operating profit / (loss)
Profit from operations is stated after charging/(crediting): Total
2021 2020
$ $
---------------------------------------------------------------------------------------- --------- --------
Share-based payment charges included within staff costs 475,780 236,297
Share-based payment charges included within professional costs 67,364 20,632
Share-based payment charges included within finance costs - 263,613
Staff costs - 2,203
(Loss) / gain on foreign currencies (21,367) 164,951
An analysis of auditor's remuneration is as follows:
Fees payable to the Group's auditors for the audit of the Group and subsidiary annual
accounts 49,095 39,329
Fees payable to the Group's auditors for non-audit assurance services 4,442 9,884
Total audit fees 53,537 49,213
------------------------------------------------------------------------------------------- --------- --------
5. Employee information
The average monthly number of employees of the Group (including
Directors) was:
2021 2020
Head office 3 3
Africa 3 3
--------------- ----- -----
6 6
------------- ----- -----
Group employee costs during the year (including executive
Directors) amounted to:
2021 2020
$ $
----------------------------- -------- --------
Wages and salaries - 2,060
Social security costs - 143
Share-based payment charges 475,780 236,297
475,780 238,500
----------------------------- -------- --------
During 2021, no awards were made under the Group share incentive
scheme.
Key management personnel include the executive and non-executive
Directors whose remuneration, including non-cash share-based
payment charges of $481k (2020: $399k), was $481k (2020: $399k);
see Directors' Report for additional detail. During the year $581k
(2020: $244k) of the full-year share-based payment charge of $969k
(2020: $528k) related to employees and their remuneration as
employees.
The highest paid Director was Jeremy Asher $401k (2020:
$305k).
6. Finance costs
During the year covered by these financial statements the Group
incurred finance costs of $149k (2020: $430k). Included within
these charges is share-based payment costs of $nil (2020: $264k)
relating to warrants issued on drawdown and extension of the
bridging loan facility and the settlement of interest due. The
Company incurred finance costs of $147k (2020: $430k).
7. Taxation
2021 2020
$ $
Current tax
UK Corporation tax - -
-------------------------------------------------------------------------------------- --------- ----------
Total current tax charge - -
-------------------------------------------------------------------------------------- --------- ----------
The tax charge for the period can be reconciled to the loss for the year as follows:
Group loss before tax (47,299) 1,360,733
Tax at the UK Corporation tax rate of 19% (2020: 19.3%) 8,986 (258,540)
Tax effects of:
Expenses not deductible for tax purposes 90,398 44,896
Tax losses carried forward not recognised as a deferred tax asset (99,384) 213,644
Current tax charge - -
---------------------------------------------------------------------------------------- --------- ----------
8. Deferred tax
At the reporting date the Group had an unrecognised deferred tax
asset of $4.1 million (2020: $4.3 million) relating to unused tax
losses. No deferred tax asset has been recognised due to the
uncertainty of future profit streams against which these losses
could be utilised.
9. Parent company income statement
For the year-ended 31 December 2021 the Parent Company made a
profit of $250k (2020: loss of $247k) including financing costs of
$147k (2020: $430k). Included within finance costs are $nil of
share-based payments with respect to warrants issued to lenders
(2020: $264k). The Company charged finance interest on intercompany
loan accounts of $185k (2020: $233k) and fees with respect to the
provision of strategic advice and support of $91k (2020: $39k). In
accordance with the provisions of Section 408 of the Companies Act
2006, the Parent Company has not presented a statement of
comprehensive income.
10. Profit / (loss) per share
The fully diluted weighted average number of shares in issue and
to be issued as at 31 December 2021 is 1,900,696,681 (2020:
1,244,247,074). At 31 December 2021 the dilutive effect of share
options outstanding was 35,416,521. At 31 December 2020, the fully
diluted profit per share has been kept the same as the basic profit
per share because the conversion of share options and share
warrants would decrease the basic loss per share and is thus
anti-dilutive. The number of anti-dilutive shares that were
excluded from this computation of profit per share was
32,615,562.
Basic & Diluted
2021 2020
$ $
--------------------------------------------------------------------- -------------- --------------
Profit / (loss) for the year 47,299 (1,360,736)
Weighted average number of ordinary shares in issue during the year 1,865,280,160 1,244,247,074
Dilutive effect of share options outstanding 35,416,521 -
Fully diluted average number of ordinary shares during the year 1,900,696,681 1,244,247,074
Profit / (loss) per share (USc) 0.00c (0.11c)
---------------------------------------------------------------------- -------------- --------------
11. Property, plant and equipment
Group Company
Year-ended 31 December 2021 $ $
Cost
At 1 January 2021 1,046 1,046
At 31 December 2021 1,046 1,046
------------------------------ ------ --------
Depreciation
At 1 January 2021 1,046 1,046
At 31 December 2021 1,046 1,046
------------------------------ ------ --------
Net book value
At 31 December 2021 - -
------------------------------ ------ --------
At 31 December 2020 - -
------------------------------ ------ --------
Year-ended 31 December 2020 $ $
Cost
At 1 January 2020 1,046 1,046
At 31 December 2020 1,046 1,046
------------------------------ ------ ------
Depreciation
At 1 January 2020 1,046 1,046
At 31 December 2020 1,046 1,046
------------------------------ ------ ------
Net book value
At 31 December 2020 - -
------------------------------ ------ ------
At 31 December 2019 - -
------------------------------ ------ ------
12. Intangible Exploration and Evaluation (E&E) assets
Exploration and evaluation assets Goodwill Total
Year-ended 31 December 2021 $ $ $
---------------------------------- ------------ -------------
Cost
At 1 January 2021 99,088,664 8,023,292 107,111,956
Additions during the year 1,700,189 - 1,700,189
At 31 December 2021 100,788,853 8,023,292 108,812,145
----------------------------- ---------------------------------- ------------ -------------
Amortisation and impairment
At 1 January 2021 (72,008,462) (8,023,292) (80,031,754)
Impairment during the year - - -
At 31 December 2021 (72,008,462) (8,023,292) (80,031,754)
----------------------------- ---------------------------------- ------------ -------------
Net book value
At 31 December 2021 28,780,391 - 28,780,391
At 31 December 2020 27,080,202 - 27,080,202
----------------------------- ---------------------------------- ------------ -------------
Exploration and evaluation assets Goodwill Total
Year-ended 31 December 2020 $ $ $
---------------------------------- ------------ -------------
Cost
At 1 January 2020 96,324,278 8,023,292 104,347,570
Additions during the year 2,764,386 - 2,764,386
At 31 December 2020 99,088,664 8,023,292 107,111,956
----------------------------- ---------------------------------- ------------ -------------
Amortisation and impairment
At 1 January 2020 (72,008,462) (8,023,292) (80,031,754)
Impairment during the year - - -
At 31 December 2020 (72,008,462) (8,023,292) (80,031,754)
----------------------------- ---------------------------------- ------------ -------------
Net book value
At 31 December 2020 27,080,202 - 27,080,202
At 31 December 2019 24,315,816 - 24,315,816
----------------------------- ---------------------------------- ------------ -------------
During the year the Group capitalised amounts totalling $1.7
million (2020: $2.7 million) with respect to the following
assets:
2021 2020
$ $
-------------- ---------- ----------
Cameroon 1,314,854 2,233,492
Namibia 47,880 91,338
South Africa 337,455 439,556
Total 1,700,189 2,764,386
-------------- ---------- ----------
In Cameroon the $1.3 million of capitalised expenditure
comprised ongoing NJOM-3 appraisal drilling preparation costs plus
the capitalised cost of operating the local office in Douala.
In South Africa, Rift Petroleum Limited, Tower's wholly owned
subsidiary, and its JV partner and operator New African Global
Energy SA (Pty) Ltd, completed the reprocessing of existing
sub-surface data, further corroborating management's view of the
prospectivity of the Algoa-Gamtoos block.
In Namibia, the Group made various licence commitment payments
to the Government of the Republic of Namibia in addition to
commencing basin modelling work and other work in line with the
work programme commitments.
In accordance with the Group's accounting policies and IFRS 6
'Exploration for and Evaluation of Mineral Resources' the Directors
have reviewed each of the exploration license areas for indications
of impairment. Having done so, it was concluded that a full
impairment review was not required on the Cameroon, South Africa or
Namibian licences,.
The Directors have not provided for any impairment of the
Group's investment in the Thali license, because potential
transactions and funding discussions with third parties support the
Directors' view that the current carrying value is recoverable.
Furthermore, the operating company, Tower Resources Cameroon SA,
was awarded a 12-month extension of the First Exploration Period of
the license to May 2022 by the Government of the Republic of
Cameroon, which has now been further extended to 11 May 2023.
In South Africa, PASA formally approved the application to enter
the second renewal period, submitted by the Operator NewAge Energy
Algoa (Pty) Ltd, on 17 November 2020, having confirmed that the
first renewal period work programme had been completed to its
satisfaction. The second renewal period commits the JV to the
acquisition of 700km of 2D seismic acquisition or the acquisition
of 300km of 3D seismic. The minimum spend is $5.0 million in total
to the JV and is to be completed by 16 November 2022, representing
a commitment to acquire a minimum of 700km 2D or 300km of 3D
seismic over the block. Acquiring the additional seismic data in
2022 is now no longer possible, not least because of environmental
concerns raised in the fourth quarter of 2021 over Shell's
acquisition of seismic data in the adjoining license areas to the
East. As a result, the JV partners do not expect to acquire the new
3D seismic data over the block until 2023 at the earliest, the
operator has told the Company that the Petroleum Authority of South
Africa ("PASA") accepts this position and merely requires that
the seismic acquisition obligation is completed before the JV
enters the next renewal period.
The Directors' view is that the recent TotalEnergies discoveries
at Brulpadda and Luiperd, and the analysis conducted by the JV
indicating that the deepwater lead in the JV license area conducted
in 2021, support the current valuation of the license.
In Namibia, the Company's investment in the current license is
currently just $368k (2020: $320k), which appears well supported by
the valuations implied by recent transactions in the region,
allowing for the early stage of the evaluation and appraisal
process. Furthermore, the Directors continue to believe firmly that
the relatively modest amounts of expenditure incurred on acquiring
and securing tenure to the licence is fully supported by their
initial view of its prospectivity based on the information that is
currently available.
13. Investment in subsidiaries
Loans to subsidiary undertakings Shares in subsidiary undertakings Total
Company $ $ $
Cost
At 1 January 2021 80,192,564 32,216,739 112,409,303
Net advances during the year 2,145,464 - 2,145,464
At 31 December 2021 82,338,028 32,216,739 114,554,767
------------------------------ --------------------------------- ---------------------------------- -------------
Provision for impairment -
At 1 January 2021 (64,862,126) (19,908,973) (84,771,099)
At 31 December 2021 (64,862,126) (19,908,973) (84,771,099)
------------------------------ --------------------------------- ---------------------------------- -------------
Net book value -
At 31 December 2021 17,475,902 12,307,766 29,783,668
------------------------------ --------------------------------- ---------------------------------- -------------
At 31 December 2020 15,330,438 12,307,766 27,638,204
------------------------------ --------------------------------- ---------------------------------- -------------
Included within loans made to subsidiary undertakings during the
year of $2.1 million (2020: 1.3 million) are amounts of $1.3
million Cameroon (2020: $1.0 million), $394k South Africa (2020:
$25k), $415k Rift Petroleum Holdings (2020: $256k) and $51k (2020:
$15k) Namibia.
Loans made by the parent company to subsidiary undertakings are
interest-bearing in accordance with loan agreements made in 2015,
and are repayable to the parent company on demand.
The subsidiary undertakings at the year-end are as follows
(these undertakings are included in the Group accounts):
Country of Class of
incorporation shares held Proportion of voting rights held Nature of business
2020 2020 2020 2019 2020
---------------------- ------------------ ------------ ----------------- ---------------- ---------------------
Tower Resources
Cameroon Limited (1) England & Wales Ordinary 100% 100% Holding company
Tower Resources Oil and gas
Cameroon SA (2) Cameroon Ordinary 100% 100% exploration
Rift Petroleum
Holdings Limited (1) Isle of Man Ordinary 100% 100% Holding company
Rift Petroleum Oil and gas
Limited (3) Zambia Ordinary 100% 100% exploration
Rift Petroleum Oil and gas
Limited (3) Isle of Man Ordinary 100% 100% exploration
Tower Resources
(Namibia) Holdings
Limited (1) England & Wales Ordinary 100% 100% Holding company
Tower Resources
(Namibia) Limited Oil and gas
(4) England & Wales Ordinary 100% 100% exploration
---------------------- ------------------ ------------ ----------------- ---------------- ---------------------
(1) Held directly by the Company, Tower
Resources plc
(2) Held directly or indirectly through
Tower Resources Cameroon Limited
(3) Held directly or indirectly through
Rift Petroleum Holdings Limited
(4) Held directly or indirectly through Tower Resources
(Namibia) Holdings Limited
14. Trade and other receivables
Group Company
2021 2020 2021 2020
$ $ $ $
----------------------------- ------ ------ ------ ------
Trade and other receivables 8,239 8,805 8,237 8,803
----------------------------- ------ ------ ------ ------
15. Trade and other payables
Group Company
2021 2020 2021 2020
$ $ $ $
------------------------------------ ---------- ---------- -------- ----------
Trade and other payables 344,601 1,763,182 173,172 1,386,925
Accruals 1,991,735 2,032,929 53,022 57,504
Loans from subsidiary undertakings - - - -
2,336,336 3,796,111 226,194 1,444,429
------------------------------------ ---------- ---------- -------- ----------
On 21 May 2021 the Company announced that it had received a
favourable ruling from the Upper Tribunal upholding the First-Tier
Tax Tribunal's decision in the Company's favour and dismissing
HMRC's appeal against the First-Tier Tax Tribunal's decision.
The First-Tier Tax Tribunal's decision, which was announced by
the Company in July 2019, allowed the Company's appeal against
HMRC's 2016 decisions to deny it credit for input VAT. The Upper
Tribunal's decision affirmed the First-Tier Tax Tribunal's
decision, and no subsequent appeal was made by HMRC to the Court of
Appeal. There remains a further appeal to the First-Tier Tax
Tribunal by HMRC on procedural grounds which is yet to be heard,
however, the Company does not assess that this appeal has any basis
in fact and has released provisions previously made totalling $1.5
million (2020: provisioned $175k). Included within trade and other
payables are amounts totalling $72k / GBP53k (2020: $1.2 million /
GBP903k) with respect to UK VAT payable.
Group creditor payment days are approximately 32 days (2020: 29
days).
Accruals include a number of cash calls in respect of current or
proposed work in South Africa which have not yet been agreed or
approved by the JV partners, and which the Company expects will
ultimately change.
16. Borrowings
Total borrowings for the Group and Company are noted below:
Group Company
2021 2020 2021 2020
$ $ $ $
----------------------------------------------- ------------ -------------- -------------- ------------
Principal balance at beginning of year 1,338,726 770,480 1,338,726 770,480
Amounts drawn down during the year - 561,742 - 561,742
Principal repaid during the year (1,278,451) - (1,278,451) -
Currency revaluations at year end (743) 6,504 (743) 6,504
----------------------------------------------- ------------ -------------- -------------- ------------
Principal balance at end of year 59,532 1,338,726 59,532 1,338,726
Financing costs at beginning of year (7,026) 70,010 (7,026) 70,010
Changes to financing costs during the year 47,383 (3,013) 47,383 (3,013)
Interest expense 99,997 152,372 99,997 152,372
Interest paid during the year (139,516) (226,382) (139,516) (226,382)
Currency revaluations at year end (20) (13) (20) (13)
----------------------------------------------- ------------ -------------- -------------- ------------
Financing costs at the end of the year 818 (7,026) 818 (7,026)
Carrying amount at end of period 60,349 1,331,700 60,349 1,331,700
----------------------------------------------- ------------ -------------- -------------- ------------
Current 13,801 1,262,937 - 1,262,937
Non-current 46,548 68,763 60,349 68,763
PRINCIPAL REPAYMENT DATES Group Company
2021 2020 2021 2020
$ $ $ $
----------------------------------------------- ------------ -------------- -------------- ------------
Due within 1 year 13,801 1,270,960 13,802 1,270,960
Due within years 2-5 46,548 55,010 46,548 55,010
Due in more than 5 years - 5,730 - 5,730
60,349 1,331,700 60,349 1,331,700
----------------------------------------------- ------------ -------------- -------------- ------------
During the year, the Group and Company entered into no new
facilities (2020: $562k) and repaid its Shard Merchant Capital Ltd
loan in January 2021 and its Pegasus Petroleum Limited loan in
August 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.
17. Share capital
2021 2020
$ $
--------------------------------------------------------------- ----------- -----------
Authorised, called up, allotted and fully paid
2,109,172,592 (2020: 1,325,296,032) ordinary shares of 0.001p 18,264,803 18,254,040
----------------------------------------------------------------- ----------- -----------
The share capital issues during 2021 are summarised as
follows:
Number of shares Share capital at nominal value Share premium
$ $
----------------------------------------------- ----------------- ------------------------------- --------------
At 1 January 2021 1,325,296,032 18,254,040 145,343,446
Shares issued for cash 757,556,560 10,403 3,838,243
Shares issued on settlement of third party
fees 26,320,000 360 110,068
Shares issued in settlement of loan interest - - -
Share issue costs - - (544,162)
At 31 December 2021 2,109,172,592 18,264,803 148,747,595
------------------------------------------------ ----------------- ------------------------------- --------------
In January 2021, the Company raised GBP1.3 million by placing
384,615,384 shares for cash and 20,000,000 shares in settlement of
third party fees at 0.325 pence per share.
In June 2021, the Company raised GBP50k by placing 20,000,000
shares for cash at 0.25 pence per share.
In July 2021, the Company raised GBP16k by placing 6,320,000
shares in settlement of third fees at 0.25 pence per share.
In August 2021, the Company raised GBP1.5 million by placing
352,941,176 shares for cash at 0.425 pence per share.
18. Reserves
Reserves within equity are as follows:
Share capital
Amounts subscribed for share capital at nominal value.
Share premium account
The share premium account represents the amounts received by the
Company on the issue of its shares which were in excess of the
nominal value of the shares.
Retained losses
Cumulative net gains and losses recognised in the Statement of
Comprehensive Income less any amounts reflected directly in other
reserves.
19. Financial instruments
Capital risk management and liquidity risk
Capital structure of the Group and Company consists of cash and
cash equivalents held for working capital purposes and equity
attributable to the equity holders of the Parent, comprising issued
capital, reserves and retained losses as disclosed in the Statement
of Changes in Equity. The Group and Company uses cash flow models
and budgets, which are regularly updated, to monitor liquidity
risk.
Significant accounting policies
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised, in respect of each material class of financial asset,
financial liability and equity instrument are disclosed in note 1
to the financial statements.
Due to the short-term nature of these assets and liabilities
such values approximate their fair values at 31 December 2021 and
31 December 2020.
Carrying amount / fair value
2021 2020
Group $ $
-------------------------------------------------------- --------------- --------------
Financial assets (classified as loans and receivables)
Cash and cash equivalents 10,227 10,054
Trade and other receivables 8,239 8,805
Total financial assets 18,466 18,859
--------------------------------------------------------- --------------- --------------
Financial liabilities at amortised cost
Trade and other payables 2,336,336 3,796,111
Bridging loan facility 60,349 1,331,700
Total financial liabilities 2,396,685 5,127,811
--------------------------------------------------------- --------------- --------------
Carrying amount / fair value
2021 2020
Company $ $
-------------------------------------------------------- --------------- --------------
Financial assets (classified as loans and receivables)
Cash and cash equivalents 6,232 7,236
Trade and other receivables 8,237 8,803
Loans to subsidiary undertakings 17,475,903 15,330,438
Total financial assets 17,490,372 15,346,477
--------------------------------------------------------- --------------- --------------
Financial liabilities at amortised cost
Loans from subsidiary undertaking 17,475,903 15,330,438
Borrowings 60,349 1,331,700
Total financial liabilities 17,536,252 16,662,138
--------------------------------------------------------- --------------- --------------
Financial risk management objectives
The Group's and Company's objective and policy is to use
financial instruments to manage the risk profile of its underlying
operations. The Group continually monitors financial risk including
oil and gas price risk, interest rate risk, equity price risk,
currency translation risk and liquidity risk and takes appropriate
measures to ensure such risks are managed in a controlled manner
including, where appropriate, through the use of financial
derivatives. The Group and Company does not enter into or trade
financial instruments, including derivative financial instruments,
for speculative purposes.
Interest rate risk management
The Group and Company borrowings carry a fixed interest rate of
1% per month and are therefore not exposed to any sensitivity
risk.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the
exposure to interest rates at the reporting date and assuming the
amount of the balances at the reporting date were outstanding for
the whole year.
A 100-basis point change represents management's estimate of a
possible change in interest rates at the reporting date. If
interest rates had been 100 basis points higher and all other
variables were held constant the Group's profits and equity would
be impacted as follows:
Group Company
Increase Increase
2021 2020 2021 2020
$ $ $ $
--------------------------- ------ -------- ------ --------
Cash and cash equivalents 484 402 419 243
Borrowings 7,725 (9,599) 7,725 (9,599)
--------------------------- ------ -------- ------ --------
8,209 (9,197) 8,144 (9,356)
--------------------------- ------ -------- ------ --------
The Group's exposure to interest rate risk, which is the risk
that a financial instrument's value will fluctuate as a result of
changes in market interest rates on classes of financial assets and
financial liabilities, was as follows:
2021 2021 2020 2020
Floating interest Non-interest bearing Floating interest rate Non-interest bearing
rate
$ $ $ $
---------------------- --------------------- ----------------------- ---------------------
Cash and cash
equivalents 6,935 3,292 7,795 2,259
----------------------- ---------------------- --------------------- ----------------------- ---------------------
Foreign currency risk
The Group's and Company's reporting currency is the US dollar,
being the currency in which the majority of the Group's revenue and
expenditure is transacted. The US dollar is the functional currency
of the Company and the majority of its subsidiaries. Less material
elements of its management, services and treasury functions are
transacted in pounds sterling. The majority of balances are held in
US dollars with transfers to pounds sterling and other local
currencies, as required to meet local needs. The Group does not
enter into derivative transactions to manage its foreign currency
translation or transaction risk as it does not believe such risks
are material.
At the year-end the Group and Company maintained the following
cash reserves:
Group Company
2021 2020 2021 2020
Cash and cash equivalents $ $ $ $
------- ------- ------ ------
Cash and cash equivalents held in US$ 921 255 921 255
Cash and cash equivalents held in GBP 8,337 9,095 5,311 6,981
Cash and cash equivalents held in XAF 703 559 - -
Cash and cash equivalents held in other currencies 266 145 - -
---------------------------------------------------- ------- ------- ------
10,227 10,054 6,232 7,236
---------------------------------------------------- ------- ------- ------ ------
Credit risk management
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group or Company. The Group and Company reviews the credit risk of
the entities that it sells its products to or that it enters into
contractual arrangements with and will obtain guarantees and
commercial letters of credit as may be considered necessary where
risks are significant to the Group or Company.
The Group has cash and cash equivalents of $22,792 as at 31
December 2020 (2020: $10,054). The cash and cash equivalents are
held with financial institutions which are rated below. Wherever
possible ratings are provided by Fitch Ratings, however, where no
rating was available from either Fitch Ratings or either of the
other major international credit rating agencies such as Standard
& Poors or Moodys, the bank's local credit rating was used:
Group Company
2021 2020 2021 2020
Cash and cash equivalents Rating $ $ $ $
--------------------------- ----------- ------- ------- ------ ------
Barclays Bank plc A+ 6,232 7,236 6,232 7,236
Royal Bank of Scotland A 3,292 2,259 - -
First Afriland Bank No rating 324 414 - -
BGFI Bank A+ 379 145 - -
--------------------------- -----------
10,227 10,054 6,232 7,236
--------------------------------------- ------- ------- ------ ------
20. Share-based payments
2021 2020
$ $
-------- --------
In the statement of comprehensive income the Group recognised the following charge with respect
to its share-based payments 968,711 528,029
------------------------------------------------------------------------------------------------ -------- --------
The share-based payments include the cost of warrants issued in
respect of the company's equity financings and bridging loan, and
also share-based payments for a number of services to the Group's
various contractors and brokers and payments in lieu of Director
fees.
Options
Details of share options outstanding at 31 December 2021 are as
follows:
Number in issue
------------------------- ----------------
At 1 January 2021 157,552,800
Lapsed during the year (1,552,800)
Awarded during the year 88,000,000
At 31 December 2021 244,000,000
--------------------------- ----------------
Date of grant Number in issue (1) Option price (pence) Latest exercise date
--------------- -------------------- --------------------- ---------------------
24 Jan 2019 70,000,000 1.250 24 Jan 2024
18 Dec 2020 86,000,000 0.450 18 Dec 2025
01 Apr 2021 88,000,000 0.450 01 Apr 2026
244,000,000
--------------- -------------------- --------------------- ---------------------
(1) These options vest in the beneficiaries in equal tranches on
the first, second and third anniversaries of grant.
The following Directors held interests, directly or indirectly,
in share options at the year-end:
2021 2020
No. No.
-------------- ------------ ------------
Jeremy Asher 180,000,000 120,000,000
Total 180,000,000 120,000,000
--------------- ------------ ------------
Warrants
Details of warrants outstanding at 31 December 2021 are as
follows:
Number in issue
------------------------- ----------------
At 1 January 2021 620,444,335
Awarded during the year 186,191,309
At 31 December 2021 806,635,644
--------------------------- ----------------
Date of grant Number in issue Warrant price (pence) Latest exercise date
--------------- ---------------- ---------------------- ---------------------
09 Nov 2017 31,853,761 1.000 09 Nov 2022
01 Jan 2018 2,542,372 1.000 01 Jan 2023
01 Apr 2018 2,083,333 1.500 01 Apr 2023
01 Jul 2018 2,272,726 1.780 30 Jun 2023
01 Oct 2018 4,687,500 1.575 30 Sep 2023
24 Jan 2019 92,212,000 1.250 23 Jan 2022
24 Jan 2019 19,999,999 1.200 23 Jan 2024
16 Apr 2019 90,000,000 1.000 14 Apr 2024
30 Jun 2019 4,285,714 1.000 28 Jun 2024
30 Jul 2019 3,000,000 1.000 28 Jul 2024
15 Oct 2019 9,600,000 0.500 14 Oct 2022
15 Oct 2019 170,774,151 1.000 14 Oct 2022
15 Oct 2019 10,990,933 0.500 14 Oct 2024
31 Mar 2020 49,816,850 0.200 30 Mar 2025
29 Jun 2020 19,719,338 0.350 28 Jun 2025
28 Aug 2020 78,616,352 0.600 28 Aug 2023
01 Oct 2020 10,960,907 0.390 30 Sep 2025
01 Dec 2020 4,930,083 0.375 30 Nov 2025
31 Dec 2020 12,116,316 0.450 30 Dec 2025
01 Apr 2021 16,998,267 0.450 31 Mar 2026
01 Jul 2021 24,736,149 0.250 30 Jun 2026
14 Jan 2021 128,205,128 0.650 14 Jan 2023
01 Oct 2021 16,233,765 0.425 30 Sep 2026
806,635,644
--------------- ---------------- ---------------------- ---------------------
The following table shows the interests of the Directors in the
share warrants in issue:
2021 2020
No. No.
---------------- ------------ ------------
Jeremy Asher 281,164,127 258,277,029
Paula Brancato 17,212,856 5,769,306
Mark Enfield 15,369,008 3,925,458
Total 313,745,991 267,971,793
----------------- ------------ ------------
The weighted average exercise price of the share warrants was
0.82p (2020: 0.89p) with a weighted average contractual life of 2.4
years (2020: 3.4 years). At 31 December 2020 and 2019 all warrants
had fully vested.
In its Statement of Comprehensive Income, the Company recognised
share-based payment charges of $446k (2020: $521k).
In compliance with the requirements of IFRS 2 on share-based
payments, the fair value of options or warrants granted during the
year is calculated using the Black Scholes option pricing model.
For this purpose, the volatility applied in calculating the above
charge varied between 20% and 111% (2020: 20% and 143%), depending
upon the date of grant, and the risk-free interest rate was 0.25%
(2020: 0.25%) and the Dividend Yield was nil% for 2021 and
2020.
The Company's share price ranged between 0.2p and 0.5p (2020:
0.2p and 0.7p) during the year. The closing price on 31 December
2021 was 0.4p per share (2020; 0.4p). The weighted average exercise
price of the share options was 0.7p (2020: 0.8p) with a weighted
average contractual life of 3.5 years (2020: 4.0 years). The total
number of options vested at the end of the year was 131.8 million
(2020: 25.9 million).
21. Related party transactions
The key management of the Group comprises the Directors of the
Company. Except as disclosed, there are no transactions with the
Directors other than their remuneration and interests in shares,
share options and warrants. As noted in the Directors' Report,
Pegasus Petroleum Ltd ("Pegasus"), a company owned and controlled
by Jeremy Asher, received $231,952 (2020: $257,155) in fees for
management services, and provided a loan facility set out in note
16. Further information on Directors' remuneration is detailed in
the Directors' Report and their total remuneration in each of the
categories specified in IAS 24 'Related Party Disclosures' is shown
below:
Group Company
2021 2020 2021 2020
$ $ $ $
-------------------------------------------------------------------------- ---------- ---------- -------- --------
Short-term employee benefits - - - -
Fees charged by companies associated with Jeremy Asher (1) 231,952 257,155 - -
Interest charged on borrowings by companies associated with Jeremy Asher
(1) 124,743 108,456 124,743 108,456
Share-based payments (2) 481,042 399,400 481,042 263,613
Share incentive scheme awards (3) - - - -
Finance interest on intercompany loan accounts 184,873 234,652 184,873 234,652
Fees charged with respect to the provision of strategic advice and
support by the parent 90,975 170,049 90,975 170,049
1,113,585 1,169,712 881,633 776,770
-------------------------------------------------------------------------- ---------- ---------- -------- --------
(1) Charged by Pegasus Petroleum Limited ("Pegasus"), a company
registered in the Channel Islands, to Rift Petroleum Holdings
Limited, a wholly owned subsidiary of Tower Resources plc and
registered in the Isle of Man. Pegasus Petroleum Limited
("Pegasus") is owned and controlled by a family trust of which
Jeremy Asher is the settlor and lifetime beneficiary. Included in
the Group's operating loss is an amount of $231,952 (2020:
$257,155) paid to Pegasus in respect of charges for management
services received during 2021.
(2) Includes $nil (2020: $163,103) of charges for share warrants
arising from the issue and extension of the loan facility made to
Tower Resources plc by Pegasus in 2019; also includes $160,711
(2020: $169,597) in respect of Director warrants issued in lieu of
fees to Directors.
The warrants issued to Pegasus and Mr Asher were on identical
terms to those issued to third parties participating in the loan
facility and share subscriptions.
22. Control
The Company is under the control of its shareholders and not any
one party.
23. Leases and capital commitments
The Group is committed to funding the following exploration
expenditure commitments as at 31 December 2021:
Country Interest 2022 2023 onwards
------------------------------------------ -------------- --------- --------------- -------------
Cameroon Thali (1) Cameroon 100% $9.03 million -
South Africa Algoa-Gamtoos (2) South Africa 50% $3.16 million -
Namibia Blocks 1910A, 1911 and 1912B (3) Namibia 80% $4.50 million -
$16.69 million -
--------------------------------------------------------- --------- --------------- -------------
(1) 1 year to 11 May 2023 for initial exploration period
(2) 2 years to 16 November 2022, Operator has informed the Group
that further time will be allowed for fulfillment of this
commitment prior to entering the next phase of work.
(3) First period expiration 5 November 2023, right of extension
available
24. Subsequent events
14 January 2022: Placing for cash to raise GBP1.5 million via a
subscription of 576,923,077 new ordinary shares of 0.001p each at a
price of 0.26 pence per share, a discount of 29% to the closing
share price on 13 January 2022.
7 February 2022: The Company noted the announcements by the
National Petroleum Corporation of Namibia ("Namcor"), and also
operator Shell Namibia Upstream B.V. ("Shell"), and partner
QatarEnergy, confirming that the Graff-1 well on PEL 39 has made a
discovery in both its primary and secondary targets, and proved a
working petroleum system for light oil in the Orange Basin,
offshore Namibia. The Company provided an analysis of the
implications of this successful well for the prospectivity of other
operators' acreage in Namibia, including its own, and observed that
Tower's net acreage position of 18,637 km2 is believed to be the
third largest net acreage position in the Namibian offshore, after
Exxon and Eco Atlantic Oil & Gas (following Eco's acquisition
of Azinam's Namibian acreage).
1 April 2022: Issue of warrants in lieu of GBP30,000 (in
aggregate) of Directors fees and a further GBP7,500 employment
costs, to conserve the Company's working capital. The warrants are
exercisable at a strike price of 0.2625 pence ("Warrants"), which
is just above the placing announced on 14 January 2022 and equal to
the closing share price of 0.2625 pence per share on 31 March 2022.
The Warrants are exercisable for a period of 5 years from the date
of issue.
9 May 2022: The Company was notified by the Government of
Cameroon of a further extension of the First Exploration Period of
the Thali PSC to 11 May 2023. The Company also announced that it
was negotiating an LOI with Shelf Drilling for Shelf's Trident VIII
jack-up drilling rig to drill the NJOM-3 well on the Thali block in
the fourth quarter of 2022. The Company also announced that it had
not yet received the approval of its 2021 farmout agreement, and
intended not to continue to seek approval of that farmout in its
current form, due to the Company's belief that better financing
alternatives were now available.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR WPUBUAUPPPGU
(END) Dow Jones Newswires
May 31, 2022 02:01 ET (06:01 GMT)
Grafico Azioni Tower Resources (LSE:TRP)
Storico
Da Nov 2023 a Dic 2023
Grafico Azioni Tower Resources (LSE:TRP)
Storico
Da Dic 2022 a Dic 2023
