TIDMTRP

RNS Number : 2590B

Tower Resources PLC

30 September 2022

30 September 2022

Tower Resources plc

Interim Results to 30 June 2022

Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)), the AIM-listed oil and gas company with its focus on Africa, announces its Interim Results for the six months ended 30 June 2022.

HIGHLIGHTS

-- January 2022 - Placing of 576,923,077 new ordinary shares at 0.26p to raise GBP1.5 million (gross), with the Company's Chairman and CEO, Jeremy Asher, subscribing for 9,615,384 new Ordinary Shares in the Placing for GBP25,000 ;

-- February 2022 - Announcements by the National Petroleum Corporation of Namibia, Shell Namibia Upstream B.V. and QatarEnergy, regarding the drilling success of the Graff-1 well on PEL 39 with discoveries in both its primary and secondary targets, proving a working petroleum system for light oil in the Orange Basin, offshore Namibia, and analysis by the Company of the implications for its own Namibian blocks;

-- May 2022 - The Cameroon Minister of Mines, Industry and Technological Development (MINMIDT) granted a further extension of the First Exploration Period of the Thali PSC to 11 May 2023.

-- June 2022 - Tower Resources Cameroon SA executed a term sheet with BGFI Bank Group, the largest bank group in Central Africa, for a medium term loan of CAF 4.42 billion (equivalent to approximately US$7.1 million) as partial financing of the NJOM-3 well on the Thali block in Cameroon. The loan would cover around 40% of the US$18 million well cost, with a further amount in excess of 25% already having been paid for by TRCSA, and the balance of 35% of the cost of the well also to be funded by TRCSA.

POST REPORTING PERIOD EVENTS

-- August 2022 - Placing of 857,142,286 new ordinary shares at 0.175p to raise GBP1.5 million (gross) with the Company's Chairman and CEO, Jeremy Asher, subscribing for 142,857,143 new Ordinary Shares in the Placing for GBP250,000;

-- August 2022 - Issue of 11,200,000 Ordinary shares in the Company to Bedrock Drilling Ltd in lieu of fees to the value of GBP25,200.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Contacts

 
 Tower Resources plc             +44 20 7157 9625 
 Jeremy Asher 
  Chairman and CEO 
 
   Andrew Matharu 
   VP - Corporate Affairs 
 
 SP Angel Corporate Finance 
  LLP 
  Nominated Adviser and Joint 
  Broker 
  Stuart Gledhill                + 44 20 3470 
  Caroline Rowe                   0470 
 Novum Securities Ltd 
  Joint Broker 
  Jon Bellis                     + 44 20 7399 
  Colin Rowbury                   9400 
 
 Panmure Gordon (UK) Limited 
  Joint Broker 
  John Prior                     + 44 20 7886 
  Hugh Rich                       2500 
 

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT FOR THE SIX MONTHSED 30 JUNE 2022

Dear Shareholder,

The first six months of 2022 have seen our Company making significant progress in a volatile environment, and against a backdrop of encouraging drilling results in Namibia. The more active market for rigs and services has presented both benefits and challenges: a number of stacked rigs have been put back into service, but several of these have been pulled into other markets and others are still finalising work sequences, while lead times for services have increased. This means that we have yet to finalise our rig selection and timing for the NJOM-3 well, as we need to fit our single-well requirement in with other companies' multi-well plans. This may still result in a spud before year-end, but is more likely to be in the New Year; however there are a number of options available to us, and therefore we still expect to get the well underway in good time.

We have also made progress with the financing of the NJOM-3 well. We received and agreed a non-binding term sheet for around US$7 million of debt financing from BGFI, the largest bank in Cameroon, in June, and BGFI tell us that they are still expecting to have their board's binding approval and draft documentation in September (today) or shortly after. In the meantime, we also received a non-binding term sheet for around US$10 million of debt financing from another bank, the Cameroon branch of one of the largest and oldest banks on the African continent, which we are presently reviewing. However we proceed, the final agreement will of course be subject to, inter alia, the execution of definitive documents.

In South Africa, we have watched closely the litigation in respect of Shell's proposed seismic survey. Our understanding is that the South African court found what appear to be deficiencies in the process by which Shell and their partners had conducted Environmental Impact Assessments ("EIA") prior to the survey. Our current view is that this should not prevent conducting of the intended survey over the deepwater lead in our Algoa-Gamtoos block, that we and operator NewAge have identified on trend with TotalEnergies' Brulpadda and Luiperd discoveries in the Outeniqua basin. However, it does emphasise how critical the correct EIA process is. We believe that our deepwater area is less environmentally sensitive than the area that was subject to the recent controversy, and shareholders will recall that we have already conducted seismic data acquisition in this block closer to shore. Nevertheless, it is now even clearer than before that the EIA and planning process cannot be rushed, which we believe the Petroleum Authority of South Africa also understands.

Given the scale of the potential prize in the Shallow and Deep sections of the Deepwater Slope and the Deepwater Basin Floor fan in our Algoa-Gamtoos block, comprising some 1.4 billion boe of pMean unrisked recoverable resources, we certainly plan to push ahead with the acquisition and processing of 3D seismic data over these leads, to firm up a drillable prospect, before entering the final exploration period of the Algoa-Gamtoos license.

In Namibia, we are in the process of completing the initial phase of basin modelling work on our PEL96 license, and will be sharing publicly what we can of that work in the coming weeks. The focus of this preliminary phase has been on analysing the spatial distribution of the source rocks, hydrocarbon generative kitchens and migration pathways in the southern and central area of the license, serving the numerous leads we had already identified in the Dolphin Graben. We turned to this area first because in the past less work had been done there, due to the interest that we and our previous partners understandably showed in the giant geological structures in the more western portion of the license area. However, we now feel that the Dolphin Graben warrants more detailed charge modelling work to understand the hydrocarbon generation and migration history in this area, because of the recent drilling success in the southern Namibian offshore, and also the Wingat-1 and Murombe-1 wells having encountered well-developed source rocks in the Walvis Basin as well.

Shareholders may recall that the source rocks encountered in the Wingat-1 and Murombe-1 wells were rich in organic carbon, and in the oil window, and both wells recovered 38 - 42 oil to surface; and that the well 1911/15-1 on our own block also encountered source rocks and oil shows. It now appears that the Lower Cretaceous source rocks extend all the way from the Orange Basin, where TotalEnergies and Shell have had their recent successes, up to the Walvis Basin, as we discussed in our announcement in February. Therefore, the current phase of work identifies the potential of these source rocks to provide oil to the various structural closures and potential stratigraphic traps, of similar geometry to those encountered in the recent Orange basin discoveries, identified in the Dolphin Graben area. Our previous analysis identified several structural closures with individual examples ranging up to 686 million boe in potential recoverable resources, and this is the analysis that we are updating now.

However, we still need to continue basin modelling work on the other potential source rocks and potential generative kitchens where significant volumes of oil could have potentially been generated and expelled in the license area. These have the potential to feed the giant structural closures on the license area, to the West and North. Therefore the basin modelling over the rest of the license area will remain a work in progress for a few more months.

We are working on a multi-client program to acquire the 3D seismic data required for our final prospect evaluation and prioritisation on PEL96, which is tentatively scheduled to begin in Q4 2023. To this end, we have authorised initial expenditure on an EIA in respect of this proposed program.

In summary, we are continuing to make progress in Cameroon and Namibia; and despite the legal issues Shell has faced in South Africa we are confident that we can still move forward there, albeit with caution. We want to drill as soon as we can in Cameroon in particular, and this continues to be our immediate priority.

Jeremy Asher

Chairman and Chief Executive

30 September 2022

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 
                                                       Six months ended        Six months ended 
                                                           30 June 2022            30 June 2021 
                                                            (unaudited)             (unaudited) 
                                               Note                   $                       $ 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 Revenue                                                              -                       - 
 Cost of sales                                                        -                       - 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 Gross profit                                                         -                       - 
 Other administrative expenses                                (520,416)               (429,463) 
 VAT provision                                                        -                 519,912 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 Total administrative expenses                                (520,416)                  90,449 
 Group operating loss                                         (520,416)                  90,449 
 Finance expense                                                (1,711)               (129,907) 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 Loss for the period before taxation                          (522,127)                (39,458) 
 Taxation                                                             -                       - 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 Loss for the period after taxation                           (522,127)                (39,458) 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 Other comprehensive income                                           -                       - 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 Total comprehensive expense for the period                   (522,127)                (39,458) 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 
 Basic loss per share (USc)                     3               (0.03c)                 (0.11c) 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 Diluted loss per share (USc)                   3               (0.03c)                 (0.11c) 
--------------------------------------------  -----  ------------------  ---  ----------------- 
 

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
                                              30 June 2021   31 December 2021 
                                               (unaudited)          (audited) 
                                      Note               $                  $ 
-----------------------------------  -----  --------------  ----------------- 
 Non-current assets 
 Exploration and evaluation assets     4        29,566,534         28,780,391 
-----------------------------------  -----  --------------  ----------------- 
                                                29,566,534         28,780,391 
 Current assets 
 Trade and other receivables           5            10,966              8,239 
 Cash and cash equivalents                          95,082             10,227 
-----------------------------------  -----  --------------  ----------------- 
                                                   106,048             18,466 
 Total assets                                   29,672,582         28,798,857 
-----------------------------------  -----  --------------  ----------------- 
 Current liabilities 
 Trade and other payables              6         1,629,751          2,336,336 
 Borrowings                            7            12,357             13,801 
-----------------------------------  -----  --------------  ----------------- 
                                                 1,642,108          2,350,137 
 Non-current liabilities 
 Borrowings                            7            35,625             46,548 
-----------------------------------  -----  --------------  ----------------- 
                                                    35,625             46,548 
 Total liabilities                               1,677,733          2,396,685 
-----------------------------------  -----  --------------  ----------------- 
 Net assets                                     27,994,849         26,402,172 
-----------------------------------  -----  --------------  ----------------- 
 Equity 
 Share capital                         8        18,272,712         18,264,803 
 Share premium                         8       150,616,116        148,747,595 
 Retained losses                             (140,893,979)      (140,610,226) 
-----------------------------------  -----  --------------  ----------------- 
 Total shareholders' equity                     27,994,849         26,402,172 
-----------------------------------  -----  --------------  ----------------- 
 

Signed on behalf of the Board of Directors

Jeremy Asher

Chairman and Chief Executive

30 September 2022

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                                                    Share         Share   (1) Share-based        Retained        Total 
                                                  capital       premium          payments          losses 
                                                                                  reserve 
                                                        $             $                 $               $            $ 
 At 1 January 2021                             18,254,040   145,343,446         8,187,337   (149,813,573)   21,971,250 
--------------------------------------------  -----------  ------------  ----------------  --------------  ----------- 
 Shares issued for cash                             5,521     1,767,869                 -               -    1,773,390 
 Shares issued on settlement of third-party 
  fees                                                273        88,330                 -               -       88,603 
 Share issue costs                                      -      (92,046)                 -               -     (92,046) 
 Share based payment charges                            -             -           206,221               -      206,221 
 Total comprehensive income for the period              -             -                 -        (39,458)     (39,458) 
 At 30 June 2021                               18,259,834   147,107,599         8,393,558   (149,853,031)   23,907,960 
--------------------------------------------  -----------  ------------  ----------------  --------------  ----------- 
 Shares issued for cash                             4,882     2,070,374                 -               -    2,075,256 
 Shares issued on settlement of third-party 
  fees                                                 87        21,738                 -               -       21,825 
 Share issue costs                                      -     (452,116)                 -               -    (452,116) 
 Share based payment charges                            -             -           762,490               -      762,490 
 Transfer to retained losses                            -             -       (6,272,250)       6,272,250            - 
 Total comprehensive expense for the period             -             -                 -          86,757       86,757 
 At 31 December 2021                           18,264,803   148,747,595         2,883,798   (143,494,024)   26,402,172 
--------------------------------------------  -----------  ------------  ----------------  --------------  ----------- 
 Shares issued for cash                             7,909     2,048,242                 -               -    2,056,151 
 Shares issued on settlement of third-party             -             -                 -               -            - 
 fees 
 Shares issue costs                                     -     (179,721)                 -               -    (179,721) 
 Total comprehensive income for the period              -             -           238,374       (522,127)    (283,753) 
 At 30 June 2022                               18,272,712   150,616,116         3,122,172   (144,016,151)   27,994,849 
--------------------------------------------  -----------  ------------  ----------------  --------------  ----------- 
 

(1) The share-based payment reserve has been included within the retained loss reserve and is a non-distributable reserve.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

 
                                                                                  Six months ended   Six months ended 
                                                                                      30 June 2022       30 June 2021 
                                                                                       (unaudited)        (unaudited) 
                                                                          Note                   $                  $ 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 Cash outflow from operating activities 
 Group operating (loss) / profit for the period                                          (520,416)             90,449 
 Share-based payments                                                      9               238,374            206,221 
 Finance costs                                                                             (1,201)              (769) 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 Operating cash flow before changes in working capital                                   (283,243)            295,901 
 Increase in receivables and prepayments                                                   (2,727)           (14,470) 
 Decrease in trade and other payables                                                    (706,585)          (539,234) 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 Cash used in operating activities                                                       (992,555)          (257,803) 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 Investing activities 
 Exploration and evaluation costs                                          4             (786,143)          (861,881) 
 Net cash used in investing activities                                                   (786,143)          (861,881) 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 Financing activities 
 Cash proceeds from issue of ordinary share capital net of issue costs     8             1,876,430          1,769,947 
 Repayment of borrowing facilities                                                         (6,433)          (501,154) 
 Repayment of interest on borrowing facilities                                               (676)           (35,142) 
 Effects of foreign currency movements on borrowing facilities                             (5,769)              1,010 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 Net cash from financing activities                                                      1,863,553          1,234,660 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 Increase in cash and cash equivalents                                                      84,855            114,976 
 Cash and cash equivalents at beginning of period                                           10,227             10,054 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 Cash and cash equivalents at end of period                                                 95,082            125,030 
-----------------------------------------------------------------------  -----  ------------------  ----------------- 
 

NOTES TO THE INTERIM FINANCIAL INFORMATION

   1.   Accounting policies 
   a)       Basis of preparation 

This interim financial report, which includes a condensed set of financial statements of the Company and its subsidiary undertakings ("the Group"), has been prepared using the historical cost convention and based on International Financial Reporting Standards ("IFRS") including IAS 34 'Interim Financial Reporting' and IFRS 6 'Exploration for and Evaluation of Mineral Reserves', as adopted by the United Kingdom ("UK").

The condensed set of financial statements for the six months ended 30 June 2022 is unaudited and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. They have been prepared using accounting bases and policies consistent with those used in the preparation of the audited financial statements of the Company and the Group for the year ended 31 December 2021 and those to be used for the year ending 31 December 2022. The comparative figures for the half year ended 30 June 2021 are unaudited. The comparative figures for the year ended 31 December 2021 are not the Company's full statutory accounts but have been extracted from the financial statements for the year ended 31 December 2021 which have been delivered to the Registrar of Companies and the auditors' report thereon was unqualified and did not contain a statement under sections 498(2) and 498(3) of the Companies Act 2006.

This half-yearly financial report was approved by the Board of Directors on 30 September 2022.

   b)       Going concern 

The Group will need to complete its 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.

   2.   Operating segments 

The Group has two reportable operating segments: Africa and Head Office. Non-current assets and operating liabilities are located in Africa, whilst the majority of current assets are carried at Head Office. The Group has not yet commenced production and therefore has no revenue. Each reportable segment adopts the same accounting policies. In compliance with IAS 34 'Interim Financial Reporting' the following table reconciles the operational loss and the assets and liabilities of each reportable segment with the consolidated figures presented in these Financial Statements, together with comparative figures for the period-ended 30 June 2021.

 
                           Africa                      Head Office                       Total 
                   Six months     Six months      Six months    Six months      Six months      Six months 
                        ended          ended           ended         ended           ended           ended 
                 30 June 2022   30 June 2021    30 June 2022       30 June    30 June 2022    30 June 2021 
                                                                      2021 
                            $              $               $             $               $               $ 
--------------  -------------  -------------  --------------  ------------  --------------  -------------- 
 Loss by 
  reportable 
  segment           22,076          (65,611)   500,051             105,069         522,127          39,458 
 Total assets 
  by 
  reportable 
  segment (1)     29,592,742      27,954,857   79,840              135,531      29,672,582      28,090,388 
--------------  -------------  -------------  --------------  ------------                  -------------- 
 Total 
  liabilities 
  by 
  reportable 
  segment (2)     (1,359,118)    (2,384,500)       (318,615)   (1,797,928)     (1,677,733)     (4,182,428) 
--------------  -------------  -------------  --------------  ------------  --------------  -------------- 
 
 (1) Carrying amounts of 
  segment assets exclude 
  investments in 
  subsidiaries. 
 (2) Carrying 
  amounts of 
  segment 
  liabilities 
  exclude 
  intra-group 
  financing. 
 
 
   3.   Loss per ordinary share 
 
                                                                                      Basic & Diluted 
                                                                              30 June 2022    31 December 2021 
                                                                               (unaudited)           (audited) 
                                                                                         $                   $ 
---------------------------------------------------------------------  ---  --------------  ------------------ 
 (Loss) / profit for the period                                                  (522,127)              47,299 
 Weighted average number of ordinary shares in issue during the period       1,857,595,225       1,865,280,160 
 Dilutive effect of share options outstanding                                            -          35,416,521 
 Fully diluted average number of ordinary shares during the period           1,857,595,225       1,900,696,681 
 (Loss) / profit per share (USc)                                                   (0.03c)               0.00c 
--------------------------------------------------------------------------  --------------  ------------------ 
 
   4.   Intangible Exploration and Evaluation (E&E) assets 
 
                                  Exploration and evaluation assets      Goodwill          Total 
 Period-ended 30 June 2022                                        $             $              $ 
                                 ----------------------------------  ------------  ------------- 
 Cost 
 At 1 January 2022                                      100,788,853     8,023,292    108,812,145 
 Additions during the period                                786,143             -        786,143 
 At 30 June 2022                                        101,574,996     8,023,292    109,598,288 
-------------------------------  ----------------------------------  ------------  ------------- 
 Amortisation and impairment 
 At 1 January 2022                                     (72,008,462)   (8,023,292)   (80,031,754) 
 At 1 January and 30 June 2022                         (72,008,462)   (8,023,292)   (80,031,754) 
-------------------------------  ----------------------------------  ------------  ------------- 
 Net book value 
 At 30 June 2022                                         29,566,534             -     29,566,534 
 At 31 December 2021                                     28,780,391             -     28,780,391 
-------------------------------  ----------------------------------  ------------  ------------- 
 

In accordance with the Group's accounting policies and IFRS 6 the Directors' have reviewed each of the exploration license areas for indications of impairment. Having done so, based on the financial constraints on the Group, and specific issues associated with each license it was concluded that a full ongoing impairment was only necessary in the case of the Zambian licenses 40 and 41, the circumstances of which have not changed since previous reporting period.

The additions during the period represent Cameroon $618k (2021: $587k), $54k in South Africa (2021: $197k) and $115k in Namibia (2021: $77k). The focus of the Group's activities during this period has been on preparing for and acquiring inventory and services with respect to the anticipated drilling of the Njonji-3 appraisal well alongside ongoing subsurface evaluation in Namibia.

   5.   Trade and other receivables 
 
                                 30 June 2022    31 December 2021 
                                  (unaudited)           (audited) 
                                            $                   $ 
-----------------------------  --------------  ------------------ 
 Trade and other receivables           10,966               8,239 
-----------------------------  --------------  ------------------ 
 

Trade and other receivables comprise prepaid expenditures.

   6.   Trade and other payables 
 
                                     30 June 2022    31 December 2021 
                                      (unaudited)           (audited) 
                                                $                   $ 
---------------------------------  --------------  ------------------ 
 Trade and other payables                 289,950             272,627 
 Work programme-related accruals        1,191,825           1,847,575 
 Other accruals                           128,583             144,160 
 VAT payable                               19,393              71,974 
                                        1,629,751           2,336,336 
---------------------------------  --------------  ------------------ 
 

The future ability of the Group to recover UK VAT has been confirmed by the Upper Tier Tribunal in its judgement in favour of the Company on 20 May 2021 and is no longer the subject of a dispute with HMRC.

Work programme-related accruals of $1.2 million (2021: $1.8 million) comprise $422k with respect to Cameroon (2021: $1.1 million) and $769k with respect to South Africa (2021: $723k).

   7.   Borrowings 
 
                                                             Group 
                                                30 June 2022    31 December 2021 
                                                 (unaudited)           (audited) 
                                                           $                   $ 
--------------------------------------------  --------------  ------------------ 
 Principal balance at beginning of period             59,532           1,338,726 
 Amounts drawn down during the period                      -                   - 
 Amounts repaid during the period                    (6,433)         (1,278,451) 
 Currency revaluations at year end                   (5,695)               (743) 
--------------------------------------------  --------------  ------------------ 
 Principal balance at end of period                   47,404              59,532 
 
 Financing costs at beginning of year                    818             (7,026) 
 Changes to financing costs during the year                -              47,383 
 Interest expense                                        510              99,997 
 Interest paid                                         (676)           (139,516) 
 Currency revaluations at year end                      (74)                (20) 
--------------------------------------------  --------------  ------------------ 
 Financing costs at the end of the year                  577                 818 
 
 Carrying amount at end of period                     47,982              60,349 
--------------------------------------------  --------------  ------------------ 
 Current                                              12,357              13,801 
 Non-current                                          35,625              46,548 
 
 Repayment dates                                             Group 
                                                30 June 2021    31 December 2020 
                                                 (unaudited)           (audited) 
                                                           $                   $ 
--------------------------------------------  --------------  ------------------ 
 Due within 1 year                                    12,357              13,801 
 Due within years 2-5                                 35,625              46,548 
 Due in more than 5 years                                  -                   - 
                                                      47,982              60,349 
--------------------------------------------  --------------  ------------------ 
 

During the period, the Group and Company entered into no new facilities (2021: $nil).

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.

On 4 March 2021, the Pegasus Petroleum Limited loan facility, to which Jeremy Asher is a controlling party, was extended to the end of November 2021. Consideration for the extension comprised an increase in the production-based payments, the amount depending on whether the loan would be repaid by 15 July or only in November 2021. Additionally, simple interest would accrue at 12% per annum pro rata, commencing on 4 March 2021, and would only be paid at the end of the facility period. The 15 July date was subsequently extended to 20 August 2021, with the production-based payments effectively limited to 3.75% of the Contractor share of revenues from the production sharing contract, net of the Government share and net of all Petroleum Taxes, and the facility was fully repaid on 20 August 2021.

   8.   Share capital 
 
                                                                        30 June 2022    31 December 2021 
                                                                         (unaudited)           (audited) 
                                                                                   $                   $ 
---------------------------------------------------------------  ---  --------------  ------------------ 
 Authorised, called up, allotted and fully paid 
 2,686,095,669 (2021: 2,109,172,592) ordinary shares of 0.001p            18,272,712          18,264,803 
--------------------------------------------------------------------  --------------  ------------------ 
 

The share capital issues during the period are summarised below:

 
                            Number of shares   Share capital at nominal value   Share premium 
  Ordinary shares                                                           $               $ 
-------------------------  -----------------  -------------------------------  -------------- 
  At 1 January 2022            2,109,172,592                       18,264,803     148,747,595 
  Shares issued for cash         576,923,077                            7,909       2,048,242 
  Share issue costs                        -                                -       (179,721) 
  At 30 June 2022              2,686,095,669                       18,272,712     150,616,116 
-------------------------  -----------------  -------------------------------  -------------- 
 
   9.   Share-based payments 
 
  In the Statement of Comprehensive Income the Group recognised the following charge in respect     30 June 2022    31 December 2021 
  of its share-based payment plan: 
                                                                                                     (unaudited)           (audited) 
------------------------------------------------------------------------------------------------ 
                                                                                                               $                   $ 
------------------------------------------------------------------------------------------------  --------------  ------------------ 
 Share-based payment charges incurred on incentivisation of staff included within administrative 
  expenses                                                                                             (158,101)           (153,039) 
 Share-based payment charges incurred on incentivisation of consultants included within 
  administrative 
  expenses                                                                                              (34,417)            (11,066) 
 Share-based payment charges recharged to subsidiary undertakings on incentivisation of staff 
  and consultants                                                                                       (14,861)            (42,116) 
 Share-based payment charges incurred on shares issued for cash                                         (30,995)                   - 
                                                                                                       (238,374)           (206,221) 
------------------------------------------------------------------------------------------------  --------------  ------------------ 
 Share-based payment charges incurred on issue of options and warrants as part of loan financing 
  facilities included within finance expense                                                                   -            (28,183) 
 Total share-based payment plan charges for the period                                                 (238,374)           (234,404) 
------------------------------------------------------------------------------------------------  --------------  ------------------ 
 

Options

Details of share options outstanding at 30 June 2022 are as follows:

 
                                Number in issue 
---------------------------    ---------------- 
 At 1 January 2022                  244,000,000 
 Awarded during the period                    - 
 Lapsed during the period                     - 
---------------------------    ---------------- 
 At 30 June 2022                    244,000,000 
-----------------------------  ---------------- 
 
 
 Date of grant    Number in issue   Option price (p)   Latest exercise date 
---------------  ----------------  -----------------  --------------------- 
 24 Jan 19             70,000,000              1.250              24 Jan 24 
 18 Dec 20             86,000,000              0.450              18 Dec 25 
 01 Apr 21             88,000,000              0.450              01 Apr 26 
                      244,000,000 
---------------  ----------------  -----------------  --------------------- 
 

These options vest in the beneficiaries in equal tranches on the first, second and third anniversaries of grant.

Warrants

Details of warrants outstanding at 30 June 2022 are as follows:

 
                                Number in issue 
 At 1 January 2022                  806,635,644 
 Awarded during the period           44,239,618 
 Lapsed during the period          (92,212,000) 
 At 30 June 2022                    758,663,262 
-----------------------------  ---------------- 
 
 
 Date of grant    Number in issue   Warrant price (p)   Latest exercise date 
---------------  ----------------  ------------------  --------------------- 
 09 Nov 17             31,853,761               1.000              09 Nov 22 
 01 Jan 18              2,542,372               1.000              01 Jan 23 
 01 Apr 18              2,083,333               1.500              01 Apr 23 
 01 Jul 18              2,272,726               1.780              30 Jun 23 
 01 Oct 18              4,687,500               1.575              30 Sep 23 
 24 Jan 19             19,999,999               1.200              23 Jan 24 
 16 Apr 19             90,000,000               1.000              14 Apr 24 
 30 Jun 19              4,285,714               1.000              28 Jun 24 
 30 Jul 19              3,000,000               1.000              28 Jul 24 
 15 Oct 19            191,365,084               1.000              13 Oct 24 
 31 Mar 20             49,816,850               0.200              30 Mar 25 
 29 Jun 20             19,719,338               0.350              28 Jun 25 
 28 Aug 20             78,616,352               0.600              28 Aug 23 
 01 Oct 20             10,960,907               0.390              30 Sep 25 
 01 Dec 20              4,930,083               0.375              30 Nov 25 
 31 Dec 20             12,116,316               0.450              30 Dec 25 
 01 Apr 21             16,998,267               0.450              31 Mar 26 
 01 Jul 21             24,736,149               0.250              30 Jun 26 
 14 Jan 21            128,205,128               0.650              14 Jan 23 
 01 Oct 21             16,233,765               0.425              30 Sep 26 
 01 Jan 22             17,329,020               0.425              01 Jan 27 
 13 Jan 22              7,058,824               0.425              12 Jan 27 
 01 Apr 22             19,851,774               0.263              01 Apr 27 
                      758,663,262 
---------------  ----------------  ------------------  --------------------- 
 

10. Subsequent events

1 July 2022: Issue of warrants in lieu of GBP30,000 (in aggregate) of Directors fees to Paula Brancato (3,366,248 warrants), Mark Enfield (3,366,248 warrants), and Jeremy Asher (6,732,496 warrants) in settlement of fees due for the period from 1 July 2022 to 30 September 2022. The warrants are exercisable at a strike price of 0.295 pence, which is the same as the closing share price of 0.295 pence per share on 30 June 2022. The warrants are exercisable for a period of 5 years from the date of issue.

2 August 2022: Placing and subscription for approximately 857,142,286 new ordinary shares of 0.001 pence each raising gross proceeds of GBP1,499,999 at a price of 0.175 pence per Placing Share. The Company also issued a broker warrant in favour of Novum granting it the right to acquire 10,588,228 ordinary shares for a period of two years at a price of 0.425p per share. While the financing discussions in respect of the NJOM-3 well are concluded, the funds have been raised in preparation for the drilling of the NJOM-3 well, including payments on account of services associated with the well, and for working capital purposes via the Placing and subscription. A small portion of the funds raised will also be used to advance the Company's other 2022 work programs in Namibia and South Africa, including the basin modelling work currently underway on the Company's Namibian license PEL 96.

16 August 2022: Grant of Options under Annual Long Term Incentive Plan over a total of 148 million new ordinary shares in the capital of the Company were awarded at an exercise price of 0.30 pence per ordinary share, being a premium of 48% over the closing price of the Shares on that day. The Options will vest in three equal tranches being 12, 24 and 36 months respectively after issue and will expire, if not previously exercised, on the fifth anniversary of their issue, and will be governed by the terms of the Company's existing share option scheme. The award of options under the Long-Term Incentive plan is an annual event, which normally takes place in the first quarter of each year, but was delayed in 2022 due to a closed period and other factors.

30 August 2022: Issue of 11,200,000 Ordinary shares in the Company to Bedrock Drilling Ltd on 27 August 2022 in lieu of fees to the value of GBP25,200. The Company has issued shares in lieu of fees on previous occasions to Bedrock Drilling, which provides well project management, well engineering services and drilling consultancy services to Tower's operations on the Thali block, offshore Cameroon, both to reduce cash costs and above all to align long term incentives with our well management team.

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(END) Dow Jones Newswires

September 30, 2022 02:00 ET (06:00 GMT)

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