TIDMTRP
RNS Number : 0692D
Tower Resources PLC
19 June 2023
19 June 2023
Tower Resources plc
Preliminary Results to 31 December 2022
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 2022.
Highlights:
-- In Cameroon, the Group's exploration and evaluation
expenditure on the Thali Production Sharing Contract ("PSC")
amounted to $3.1 million (2021: $1.3 million). A formal request for
extension of the First Exploration Period of the PSC to 11 May 2024
has been submitted to the Minister of Mines, Industry and
Technological Development ("MINMIDT") and the Company has been
informed that processing of this extension is underway. Other
Cameroon highlights include:
-- Discussions continued with rig owners and operators with the
aim to secure rig availability in the third and/or fourth quarter
of 2023 to drill the NJOM-3 well.
-- Discussions continued for asset level financing with several parties, including a term loan of approximately $7 million with BGFI Bank Group.
-- Updated resource estimates and risk profiles were developed
for the reservoirs connected to the NJOM-1 and the NJOM-2 discovery
wells, substantially lowering risk attributed to PS9 Sup and PS3 HW
reservoirs, and increasing total risked pMean prospective resources
to 35.4 million bbls.
-- In South Africa, operator NewAge continued to work towards
the acquisition of 3D seismic over the permit area.
-- In Namibia Tower has been conducting basin modelling to
support technical evaluation of the leads identified to date as
part of the work programme for the Initial Exploration Period for
PEL 96. The Company is now moving forward with more detailed and
focused geological and geophysical analysis aiming to high-grade
areas for further seismic data acquisition. Once this work has been
completed, Tower is planning to acquire new 3D seismic data over
the most promising leads/prospects in line with its work
programme.
-- Following the favourable VAT rulings from the Upper Tribunal
in 2022 with respect to the Group's UK VAT position, of the three
remaining appeals outstanding at the year-end, two have been
settled with a further appeal remaining under discussion. The
Company received GBP351k ($422k) in settlement of the first two
appeals, after the accounts date.
-- Administrative costs net of share-based payment charges of
$631k (2021: $762k) include legal fees incurred totalling $133k
(2021: $263k)
-- Cash balance at year-end of $231k (2021: $10k)
Post-reporting period events:
16 January 2023: Facility Agreement with Energy Exploration
Capital Partners LLC ("EECP") to raise $1.25 million. The facility
provides for further convertible advances of up to $4.75 million
subject to certain conditions.
15 February 2023: Issue of 23.2 million warrants in lieu of
GBP30,000 (in aggregate) of Directors fees in respect of the period
January-March 2023, to conserve the Company's working capital. The
warrants are exercisable at a strike price of 0.175 pence (0.21c)
per share. The warrants are exercisable for a period of five years
from the date of issue.
30 March 2023: Share issuance in accordance with the terms of
the investment deed with EEPC announced on 16 January 2023, of
102,543,067 ordinary shares of 0.001 pence each. The purchase price
of 0.12 pence (0.15c) per Ordinary Share for the settlement amount
of $150,000 had been prepaid by EEPC as part of the 16 January
advance.
27 April 2023: Cameroon operational update covering:
-- Application for a one-year extension of the initial
exploration period of the PSC, following positive discussions with
the Minister of Mines, Industry and Technological Development and
the Prime Minister of the Republic of Cameroon.
-- Ongoing discussions with rig owners and operators with the
aim to secure rig availability in the third and fourth quarter of
this year to drill at NJOM-3.
-- Ongoing negotiations for a term loan of approximately $7
million with BGFI Bank Group and asset-level financing with several
other parties.
-- Updated resource estimates and risks for the reservoirs
connected to the NJOM-1 and the NJOM-2 discovery wells,
substantially lowering risk attributed to PS9 Sup and PS3 HW
reservoirs, and increasing total risked pMean prospective resources
to 35.4 million bbls.
-- Deployment of software to conduct detailed attribute analysis
of the reprocessed 3D seismic data to identify the oil and gas
elements of the reservoirs in the Njonji-1 and Njonji-2 fault
blocks, resulting in a clearer picture of the pay zones in both
fault blocks.
2 May 2023: Issue of 34.4 million warrants in lieu of GBP30,000
(in aggregate) of Directors fees in respect of the period
April-June 2023, to conserve the Company's working capital. The
warrants are exercisable at a strike price of 0.1425 p (0.18c) per
share, a premium of 24% over the mid-point closing share price on
28 April 2023. The warrants are exercisable for a period of five
years from the date of issue.
16 May 2023: Placing and subscription of 4,600 million shares to
raise GBP2.3 million ($2.9 million) at a price of 0.05p (0.06c) per
share.
16 June 2023: Namibia technical update setting out initial
conclusions from basin modelling work prior to and after the
accounts date.
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
Kasia Brzozowska 0470
Novum Securities Limited
Joint Broker
Jon Bellis + 44 20 7399
Colin Rowbury 9400
Axis Capital Markets Limited
Joint Broker +44 0203 026
Richard Hutchison 2689
Panmure Gordon (UK) Limited
Joint Broker
John Prior + 44 20 7886
Hugh Rich 2500
BlytheRay
Financial PR
Tim Blythe
Megan Ray +44 20 7138 3204
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
During 2022 the focus of the oil and gas market shifted away
from the pandemic and initially was dominated by the conflict in
Ukraine; however, as the year went on, the market became more
concerned with longer term questions of supply and demand. The
potential for supply shortfalls, which had its origin in the
under-investment which preceded the pandemic and continued
throughout it, has been highlighted by the events of the last year.
However, the risks of global stagflation or recession have weighed
on demand expectations, and in the short term the market has
remained well balanced mainly due to the continued movement of
Russian oil, albeit to new customers and at lower prices. The
result has been a market which is currently quite well balanced in
the short term, and prices which remain very favourable for the
Company's projects, and with the potential for further upside in
the years ahead.
Our Cameroon project is still critical to the Company, as it
remains the project which is closest to first oil, revenues and
cash flow. Our priority is still to get the NJOM-3 well drilled as
soon as possible, as this is the gateway to the rest of the
development. As discussed in our operational review and in recent
announcements, we have had to contend with a shortage of available
rigs during 2022 and the first half of 2023, but we now finally
have rig options opening up, and so we are optimistic of being able
to move ahead with this critical well in 2023.
The Government of Cameroon has continued to be extremely
supportive and we are very grateful to them. We are also still in
active and detailed discussions and due diligence regarding the
financing for the NJOM-3 well, which we hope to have completed in
good time for our preferred rig option.
In Namibia we have been greatly encouraged by the basin
modelling we have been undertaking both in 2022 and during the
first half of 2023, which is discussed in our operational review
and also in more detail in our recent Namibia update. Our computer
basin modelling simulations, calibrated to the nearby well data,
appear to be highly predictive of the source rock maturity and
hydrocarbon generative kitchen areas and show clear migration
pathways. We are especially excited that these outputs closely fit
the actual geochemical well data and predict the oil shows (derived
from a mature lacustrine source rock) that we observed in the Norsk
Hydro well 1911/15-1, as well as the actual geochemical
measurements and data points from the other regional wells. A
question we had sought to investigate was the immaturity of the
shallower Upper Cretaceous source rocks encountered in that well,
and the underlying volcano-clastic rocks that are interbedded with
sedimentary series with indications of higher total organic carbon
content, but which clearly did not generate the lacustrine oil
found in the 1911/15-1 well. Our basin models, together with
detailed seismic sequence stratigraphic analysis, reconcile those
observations with the lacustrine oil, which clearly originated from
deeper and laterally extensive Lower Cretaceous source rocks in the
syn-rift series. This is a critical and very positive conclusion
for potential charge in our license area.
It was also very nice to see the success of Shell's appraisal
drilling at Graff, which among other things has emphasised the
enormous potential of stratigraphic traps in the region and how the
potential volumes found in those traps can increase as one
drills.
In South Africa, our co-venturer and operator NewAge is
continuing to explore the options for acquisition of new 3D seismic
data over our deep-water Outeniqua basin lead, which continues to
attract interest from third parties.
We realise that it has been a frustrating time for all
shareholders, as we would all have liked to see the NJOM-3 well
drilled already; however, we are continuing to make progress
towards that goal and we remain confident we will reach it.
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 Production Sharing Contract ("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 and the subsequent appraisal drilling in
2022, all 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 2022 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 the 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 previous annual reports, our strategy
remains 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 2022 we were able to make progress on all of our licenses,
despite a number of headwinds.
In Cameroon we received an extension of the initial exploration
period of the Thali PSC to May 2023, and immediately turned our
attention to rig negotiations. However, an unexpected consequence
of the conflict in Ukraine was the decision of Aramco to charter a
large number of jack-up rigs for deployment in the Arabian Gulf,
which effectively removed all the surplus capacity from the jack-up
market and led to substantial increases in the day-rates for both
rigs and associated services. At the time of writing, jack-up rig
day-rates, for example, have roughly doubled since the end of 2021.
More troubling than the increase in rates was the lack of
availability. Most oil and gas operators with rigs on charter and
with options to extend at "old" rates, were obviously keen to
exercise those options, and rig owners wanted to lock in the new
higher rates for as long as possible via new long-term charters and
were therefore unwilling to commit to drilling single wells.
Nevertheless, we anticipated that gaps in operators' schedules
would inevitably arise if we were patient, and although we have had
to wait until 2023 for these gaps to appear, it does now seem
possible to fit our drilling requirements within other operators'
schedules.
In the meantime, we undertook further subsurface work in 2022
which resulted in updated volumetric assessments, and we have
continued to refine our subsurface analysis after the accounts
date, including the application of enhanced attribute analysis
using the Paradise software which we have discussed in recent
announcements. We have also worked on the financing options for the
NJOM-3 well, and on the budget for the well, in order to mitigate
as best we can the inevitable increases in cost.
In Namibia, we continued the basin modelling work that we had
begun in 2021. The output from this work in the third quarter of
2022 persuaded us that we should expand the scope of the basin
modelling, which continued through the end of 2022 and up until May
2023. We have recently updated investors regarding the initial
conclusions of this basin modelling work. This has indicated the
potential for mature oil source rocks in the deeper syn-rift
sections across the Dolphin Graben, generating predominantly oil
phase hydrocarbons in substantial volumes, capable of charging very
large structures. It has also identified focused migration pathways
from those source rocks and generative kitchens to the giant
anticlines in the Western area of the license, and a number of
potential stratigraphic trap plays both in the Dolphin Graben
itself and along the flanks of the giant structures to the West,
which are also capable of containing large volumes of oil. The
basin modelling work is very closely calibrated with the actual
geochemical data measured in the nearby wells and is highly
predictive of hydrocarbon generation, expulsion and migration, and
also explains the presence of the lacustrine oil in the Norsk Hydro
well 1911/15-1 in our license area. The analysis explains why this
oil would originally have been generated and potentially trapped
and the subsequent tilting of the area would have caused any
trapped hydrocarbons to have migrated elsewhere, explaining the
residue of oil in the well and providing us with high confidence in
the analysis.
Our next steps in Namibia include an oil seep analysis to put
together with the basin modelling and possibly some further
attribute analysis, to prioritise the leads we have already
identified in the license area and to reassess their likelihood and
expected volume of charge. This will allow us to choose the best
area over which to acquire new 3D seismic data in due course. We
will need an extension of the initial exploration period to
accommodate this, and we will apply for that extension in the third
quarter of 2023.
In South Africa, our 50% partner NewAge, as operator of the
Algoa-Gamtoos block, has continued to negotiate with potential
contractors for 3D seismic data acquisition on either a proprietary
or a multi-client basis. This is a slow process partly because of
the uncertainties created by the new Petroleum Bill and its
implementation, and also the associated uncertainty over the
environmental consultation process highlighted by the litigation
over Shell's delayed plans to acquire 3D seismic over a rather
larger area to the East of our license. PASA, the regulatory
authority, has been understanding of this situation, and we hope to
find a way forward that might entail agreeing on a contractor and
an environmental consultation process in the year ahead.
NewAge has also continued to explore farm-out options for the
Algoa Gamtoos block and discussions with interested parties
continue.
PRELIMINARY RESULTS FOR THE YEARED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
31 December 2022 31 December 2021
(audited) (audited)
Note $ $
----------------------------------------------------- ----- ------------------ -----------------
Revenue - -
Cost of sales - -
----------------------------------------------------- ----- ------------------ -----------------
Gross profit - -
Other administrative expenses (1,007,040) (1,284,136)
VAT provision - 1,480,683
----------------------------------------------------- ----- ------------------ -----------------
Total administrative expenses (1,007,040) 196,547
----------------------------------------------------- ----- ------------------ -----------------
Group operating (loss) /profit 4 (1,007,040) 196,547
Finance expense 6 (2,082) (149,248)
----------------------------------------------------- ----- ------------------ -----------------
(Loss) / profit for the year before taxation (1,009,122) 47,299
Taxation 7 - -
----------------------------------------------------- ----- ------------------ -----------------
(Loss) / profit for the year after taxation (1,009,122) 47,299
----------------------------------------------------- ----- ------------------ -----------------
Other comprehensive income - -
----------------------------------------------------- ----- ------------------ -----------------
Total comprehensive (expense) / income for the year (1,009,122) 47,299
----------------------------------------------------- ----- ------------------ -----------------
Basic (loss) / profit per share (USc) 10 (0.05c) 0.00c
----------------------------------------------------- ----- ------------------ -----------------
Diluted (loss) / profit per share (USc) 10 (0.05c) 0.00c
----------------------------------------------------- ----- ------------------ -----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2022 31 December 2021
(audited) (audited)
Note $ $
--------------------------------------- ----- ------------------ -----------------
Non-current assets
Property, plant and equipment 11 - -
Exploration and evaluation assets 12 31,833,671 28,780,391
--------------------------------------- ----- ------------------ -----------------
31,833,671 28,780,391
--------------------------------------- ----- ------------------ -----------------
Current assets
Trade and other receivables 14 474,749 8,239
Cash and cash equivalents 231,216 10,227
--------------------------------------- ----- ------------------ -----------------
705,965 18,466
--------------------------------------- ----- ------------------ -----------------
Total assets 32,539,636 28,798,857
--------------------------------------- ----- ------------------ -----------------
Current liabilities
Trade and other payables 15 2,631,815 2,336,336
Provision for liabilities and charges 16 502,972 -
Borrowings 17 12,244 13,801
--------------------------------------- ----- ------------------ -----------------
3,147,031 2,350,137
--------------------------------------- ----- ------------------ -----------------
Non-current liabilities
Borrowings 29,286 46,548
--------------------------------------- ----- ------------------ -----------------
Total liabilities 3,176,317 2,396,685
--------------------------------------- ----- ------------------ -----------------
Net assets 29,363,319 26,402,172
--------------------------------------- ----- ------------------ -----------------
Equity
Share capital 18 18,283,317 18,264,803
Share premium 18 152,336,303 148,747,595
Retained losses 19 (141,256,301) (140,610,226)
--------------------------------------- ----- ------------------ -----------------
Total shareholders' equity 29,363,319 26,402,172
--------------------------------------- ----- ------------------ -----------------
The financial statements of Tower Resources plc, registered
number 05305345 were approved by the Board of Directors and
authorised for issue on 16 June 2023.
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 2021 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 expense 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
------------------------------------------- ----------- ------------ ---------------- -------------- ------------
Shares issued for cash 18,384 3,870,790 3,889,174
Shares issued on settlement of third-party
fees 131 29,393 - - 29,524
Share issue costs - (311,475) (311,475)
Share-based payment charge for the year - - 363,047 - 363,047
Transfer to retained losses - - (738,615) 738,615 -
Total comprehensive income for the year - - - (1,009,122) (1,009,122)
At 31 December 2022 18,283,317 152,336,303 2,508,230 (143,764,531) 29,363,319
------------------------------------------- ----------- ------------ ---------------- -------------- ------------
(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 2022 31 December 2021
(audited) (audited)
Note $ $
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash outflow from operating activities
Group operating (loss) / profit for the year (1,007,040) 196,547
Share-based payments 21 363,047 968,711
Shares issued on settlement of third-party fees 29,524 110,428
----------------------------------------------------------------------- ----- ------------------ -----------------
Operating cash flow before changes in working capital (614,469) 1,275,686
(Increase) / decrease in receivables and prepayments (466,510) 566
Increase in provision for liabilities and charges 502,972 -
Increase / (decrease) in trade and other payables 295,479 (1,459,775)
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash used in operations (282,528) (183,523)
Interest paid (net) (7,387) (2,631)
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash used in operating activities (289,915) (186,154)
----------------------------------------------------------------------- ----- ------------------ -----------------
Investing activities
Exploration and evaluation costs 12 (3,053,280) (1,700,189)
Net cash used in investing activities (3,053,280) (1,700,189)
----------------------------------------------------------------------- ----- ------------------ -----------------
Financing activities
Repayment of loan facilities 17 (12,294) (1,278,451)
Cash proceeds from issue of ordinary share capital net of issue costs 18 3,577,698 3,304,484
Interest paid 17 (1,220) (139,516)
----------------------------------------------------------------------- ----- ------------------ -----------------
Net cash from financing activities 3,564,183 1,886,517
----------------------------------------------------------------------- ----- ------------------ -----------------
Increase in cash and cash equivalents 220,989 173
Cash and cash equivalents at beginning of year 10,227 10,054
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash and cash equivalents at end of year 231,216 10,227
----------------------------------------------------------------------- ----- ------------------ -----------------
COMPANY STATEMENT OF FINANCIAL POSITION
31 December 2022 31 December 2021
(audited) (audited)
Note $ $
---------------------------------------- ----- ------------------ -----------------
Non-current assets
Loans to subsidiary undertakings 13 20,859,388 17,475,903
Investments in subsidiary undertakings 13 12,307,766 12,307,766
---------------------------------------- ----- ------------------ -----------------
33,167,154 29,783,669
---------------------------------------- ----- ------------------ -----------------
Current assets
Trade and other receivables 14 474,747 8,237
Cash and cash equivalents 159,456 6,232
---------------------------------------- ----- ------------------ -----------------
634,203 14,469
---------------------------------------- ----- ------------------ -----------------
Total assets 33,801,357 29,798,138
---------------------------------------- ----- ------------------ -----------------
Current liabilities
Trade and other payables 15 87,069 226,194
Provision for liabilities and charges 16 502,972 -
Borrowings 17 12,244 13,801
602,285 239,995
---------------------------------------- ----- ------------------ -----------------
Non-current liabilities
Borrowings 17 29,286 46,548
Total liabilities 631,571 286,543
---------------------------------------- ----- ------------------ -----------------
Net assets 33,169,786 29,511,595
---------------------------------------- ----- ------------------ -----------------
Equity
Share capital 18 18,283,317 18,264,803
Share premium 18 152,336,303 148,747,595
Retained losses 19 (137,449,834) (137,500,803)
Total shareholders' equity 33,169,786 29,511,595
---------------------------------------- ----- ------------------ -----------------
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 2022 the
Company made a loss of $312k (2021: $250k).
The financial statements of Tower Resources plc, registered
number 05305345 were approved by the Board of Directors and
authorised for issue on 16 June 2023.
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 2021 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
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
Shares issued for cash 18,384 3,870,790 - - 3,889,174
Shares issued on settlement of third-party
fees 131 29,393 - - 29,524
Share issue costs - (311,475) - - (311,475)
Share option charge for the year - - 363,047 - 363,047
Transfer to retained losses - - (738,615) 738,615 -
Total comprehensive expense for the year - - - (312,078) (312,078)
At 31 December 2022 18,283,317 152,336,303 2,508,230 (139,958,064) 33,169,786
-------------------------------------------- ----------- ------------ ---------------- -------------- -----------
(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 2022 31 December 2021
(audited) (audited)
Note $ $
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash outflow from operating activities
Operating (loss) / profit for the year (846,081) 214,817
Share-based payments 21 363,047 968,711
Shares issued on settlement of third-party fees 29,524 110,428
----------------------------------------------------------------------- ----- ------------------ -----------------
Operating cash flow before changes in working capital (453,510) 1,293,956
(Increase) / decrease in receivables and prepayments (466,510) 566
Increase in provision for liabilities and charges 502,972 -
Decrease in trade and other payables (139,125) (1,218,235)
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash (used in) / from operations (556,173) 76,287
Interest received 528,698 181,658
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash (used in) / from from operating activities (27,475) 257,945
----------------------------------------------------------------------- ----- ------------------ -----------------
Investing activities
Loans granted to subsidiary undertakings 13 (3,383,485) (2,145,465)
Net cash used in investing activities (3,383,485) (2,145,465)
----------------------------------------------------------------------- ----- ------------------ -----------------
Financing activities
Repayment of loan facilities 17 (12,294) (1,278,451)
Cash proceeds from issue of ordinary share capital net of issue costs 18 3,577,698 3,304,484
Interest paid 17 (1,220) (139,516)
----------------------------------------------------------------------- ----- ------------------ -----------------
Net cash from financing activities 3,564,183 1,886,517
----------------------------------------------------------------------- ----- ------------------ -----------------
Increase / (decrease) in cash and cash equivalents 153,224 (1,004)
Cash and cash equivalents at beginning of year 6,232 7,236
----------------------------------------------------------------------- ----- ------------------ -----------------
Cash and cash equivalents at end of year 159,456 6,232
----------------------------------------------------------------------- ----- ------------------ -----------------
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 2022 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 2023. 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 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)
------------------------ ----------------- -------------------- -------------------------
IFRS 16 (amendments) Lease Liability in a 1 January 2024
Sale and Leaseback
------------------------ ----------------- -------------------- -------------------------
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 2023. 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 a 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
2022 was GBP1 / $1.2026 (2021: GBP1 / $1.3479).
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.
o) 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.
p) 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.
q) 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.
r) 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.
s) 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
Following the favourable ruling from the Upper Tribunal received
on 21 May 2021, 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 Company released most of
its provisions which had previously been recorded in respect of VAT
payable.
At the accounts date there remained three further appeals to the
First-Tier Tax Tribunal by HMRC, which were yet to be heard. The
two earlier appeals concerned time periods not covered by the
original Tribunal decisions, to which HMRC had raised procedural
objections which it subsequently withdrew prior to the accounts
date, and these appeals were formally settled after the accounts
date, resulting in a payment (after the accounts date) to the
Company of $422,359 (GBP351,212) which has been recorded in the
accounts as receivable. The third more recent appeal concerns a
revised assessment in respect of time periods covered by the Upper
Tribunal's 21 May 2021 decision. The legal advice received by the
Company is that this revised assessment is incorrect, which is why
the Company only recognises a provision for a potential liability
in respect of this assessment in the 2022 accounts (as opposed to a
liability for VAT in the accounts payable note).
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
repercussions of events in the Ukraine, 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 21.
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 2022.
Africa Head Office Total
2022 2021 2022 2021 2022 2021
$ $ $ $ $ $
-------------------------------------- ------------ ------------ ---------- ---------- ------------ ------------
Administrative expenses (1) (55,120) 73,931 (709,024) 598,396 (764,144) 672,327
Share-based payment charges - - (242,896) (475,780) (242,896) (475,780)
Interest income - - (931) (1,226) (931) (1,226)
Financing costs (641) (643) (510) (147,379) (1,151) (148,022)
Loss by reportable segment (55,761) 73,288 (953,361) (25,989) (1,009,122) 47,299
Total assets by reportable segment (2
/ 3) 31,905,433 28,784,388 634,203 14,469 32,539,636 28,798,857
-------------------------------------- ------------ ------------ ---------- ---------- ------------ ------------
Total liabilities by reportable
segment (4) (2,544,748) (2,110,144) (631,569) (286,541) (3,176,317) (2,396,685)
-------------------------------------- ------------ ------------ ---------- ---------- ------------ ------------
(1) Administrative expenses include credits of $nil million
(2021: expense $1.4 million) 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 $32.5 million (2021: $28.8
million) are $17.4 million Cameroon (2021: $14.3 million) , $751k
Namibia (2021: $368k) and $13.7 million South Africa (2021: $14.1
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)
(Loss) / profit from operations is stated after charging/(crediting):
2022 2021
$ $
------------------------------------------------------------------------------------------- -------- ---------
Share-based payment charges included within staff costs 242,897 475,780
Share-based payment charges included within professional costs 51,228 67,364
Loss / (gain) on foreign currencies 69,299 (21,367)
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 57,136 49,095
Fees payable to the Group's auditors for non-audit assurance services - 4,442
Total audit fees 57,136 53,537
--------------------------------------------------------------------------------------------- -------- ---------
5. Employee information
The average monthly number of employees of the Group (including
Directors) was:
2022 2021
Head office 3 3
Africa 3 3
--------------- ----- -----
6 6
------------- ----- -----
Group employee costs during the year (including executive
Directors) amounted to:
2022 2021
$ $
----------------------------- -------- --------
Share-based payment charges 242,897 475,780
242,897 475,780
----------------------------- -------- --------
During 2022, 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 $k243 (2021: $481k), was $243k (2021: $481k);
see Directors' Report for additional detail. During the year $271k
(2021: $581k) of the full-year share-based payment charge of $363k
(2021: $969k) related to employees and their remuneration as
employees.
The highest paid Director was Jeremy Asher $187k (2021:
$401k).
6. Finance costs
During the year covered by these financial statements the Group
incurred finance costs of $2k (2021: $149k). The Company incurred
finance costs of $1k (2021: $147k).
7. Taxation
2022 2021
$ $
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 1,009,122 (47,299)
Tax at the UK Corporation tax rate of 19% (2021: 19%) (191,733) 8,986
Tax effects of:
Expenses not deductible for tax purposes 46,150 90,398
Tax losses carried forward not recognised as a deferred tax asset 145,583 (99,384)
Current tax charge - -
---------------------------------------------------------------------------------------- ---------- ---------
8. Deferred tax
At the reporting date the Group had an unrecognised deferred tax
asset of $4.8 million (2021: $4.1 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 2022 the Parent Company made a
loss of $312k (2021: profit of $250k) including financing costs of
$1k (2021: $147k). The Company charged finance interest on
intercompany loan accounts of $536k (2021: $185k) and fees with
respect to the provision of strategic advice and support of $105k
(2021: $91k). 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. (Loss) / profit per share
The fully diluted weighted average number of shares in issue and
to be issued as at 31 December 2022 is 2,165,197,663 (2021:
1,900,696,681). At 31 December 2022 the dilutive effect of share
options outstanding was nil (2021: 35,416,521). At 31 December
2022, the fully diluted loss per share has been kept the same as
the basic loss 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 7,688,323
(2021: nil).
Basic & Diluted
2022 2021
$ $
--------------------------------------------------------------------- -------------- --------------
(Loss) / profit for the year (1,009,122) 47,299
Weighted average number of ordinary shares in issue during the year 2,165,197,663 1,865,280,160
Dilutive effect of share options outstanding - 35,416,521
Fully diluted average number of ordinary shares during the year 2,165,197,663 1,900,696,681
(Loss) / profit per share (USc) (0.05c) 0.00c
---------------------------------------------------------------------- -------------- --------------
11. Property, plant and equipment
Group Company
Year-ended 31 December 2022 $ $
Cost
At 1 January 2022 1,046 1,046
At 31 December 2022 1,046 1,046
------------------------------ ------ --------
Depreciation
At 1 January 2022 1,046 1,046
At 31 December 2022 1,046 1,046
------------------------------ ------ --------
Net book value
At 31 December 2022 - -
------------------------------ ------ --------
At 31 December 2021 - -
------------------------------ ------ --------
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 - -
------------------------------ ------ --------
12. Intangible Exploration and Evaluation (E&E) assets
Exploration and evaluation assets Goodwill Total
Year-ended 31 December 2022 $ $ $
---------------------------------- ------------ -------------
Cost
At 1 January 2022 100,788,853 8,023,292 108,812,145
Additions during the year 3,053,280 - 3,053,280
At 31 December 2022 103,842,133 8,023,292 111,865,425
----------------------------- ---------------------------------- ------------ -------------
Amortisation and impairment
At 1 January 2022 (72,008,462) (8,023,292) (80,031,754)
Impairment during the year - - -
At 31 December 2022 (72,008,462) (8,023,292) (80,031,754)
----------------------------- ---------------------------------- ------------ -------------
Net book value
At 31 December 2022 31,833,671 - 31,833,671
At 31 December 2021 28,780,391 - 28,780,391
----------------------------- ---------------------------------- ------------ -------------
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
----------------------------- ---------------------------------- ------------ -------------
During the year the Group capitalised amounts totalling $1.5
million (2021: $1.7 million) with respect to the following
assets:
2022 2021
$ $
-------------- ---------- ----------
Cameroon 3,085,434 1,314,854
Namibia 383,193 47,880
South Africa (415,347) 337,455
Total 3,053,280 1,700,189
-------------- ---------- ----------
Cameroon
The $3.1 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, continued to work on planning the forthcoming
seismic acquisition. The JV partners also negotiated the settlement
of certain charges made to the JV, resulting in a credit of costs
historically charged of $565k and a net credit for the year of
$415k.
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 and the
Company's internal cash flow projections for the license support
the Directors' view that the current carrying value is recoverable.
Furthermore, the operating company, Tower Resources Cameroon SA,
has applied for a 12-month extension of the First Exploration
Period of the license to May 2024 and has been informed by the
Government of the Republic of Cameroon that this extension is being
processed. Final formal confirmation of the extension has yet to be
received but is expected during Q3 of 2023.
Namibia
The Group made various licence commitment and training 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.
The Company's investment in the current license is currently
just $588k (2021: $368k), 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
South Africa
In South Africa, the Petroleum Authority of 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 this
period will conclude upon the completion of the work programme,
representing a commitment to acquire a minimum of 700km 2D or 300km
of 3D seismic over the block. Acquiring the additional seismic data
in 2023 is now no longer possible, and as a result, the JV partners
do not expect to acquire the new 3D seismic data over the block
until 2024 at the earliest. The operator has told the Company that
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.
Impairment
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.
13. Investment in subsidiaries
Loans to subsidiary Shares in subsidiary
undertakings undertakings Total
Company $ $ $
Cost
At 1 January 2022 82,338,029 32,216,739 114,554,768
Net advances during the year 3,383,484 - 3,383,484
At 31 December 2022 85,721,513 32,216,739 117,938,252
-------------------------------------- ------------------------ ---------------------------- -----------------
Provision for impairment -
At 1 January 2021 (64,862,126) (19,908,973) (84,771,099)
At 31 December 2022 (64,862,126) (19,908,973) (84,771,099)
-------------------------------------- ------------------------ ---------------------------- -----------------
Net book value -
At 31 December 2022 20,859,387 12,307,766 33,167,154
-------------------------------------- ------------------------ ---------------------------- -----------------
At 31 December 2021 17,475,903 12,307,766 29,783,669
-------------------------------------- ------------------------ ---------------------------- -----------------
Included within loans made to subsidiary undertakings during the
year of $3.4 million (2021: 2.1 million) are amounts of $2.5
million Cameroon (2021: $1.3 million), $158k South Africa (2021:
$394k), $616k Rift Petroleum Holdings (2021: $415k) and $131k
(2021: $51k) 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
2022 2022 2022 2021 2022
------------------------ ---------------- ------------ ----------------- ---------------- -----------------------
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 Limited Oil and gas
(3) Zambia Ordinary 100% 100% exploration
Rift Petroleum Limited Oil and gas
(3) Isle of Man Ordinary 100% 100% exploration
Tower Resources
(Namibia) Holdings
Limited (1) England & Wales Ordinary 100% 100% Holding company
Tower Resources Oil and gas
(Namibia) Limited (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
(5) Dissolved 10 August 2021
14. Trade and other receivables
Group Company
2022 2021 2022 2021
$ $ $ $
----------------------------- -------- ------ -------- ------
Trade and other receivables 474,749 8,239 474,747 8,237
----------------------------- -------- ------ -------- ------
Trade and other receivables include VAT recoverable from HMRC on
late appeals owed to the Company totalling GBP351k ($422k) which
was received in May 2023.
15. Trade and other payables
Group Company
2022 2021 2022 2021
$ $ $ $
------------------------------------ ---------- ---------- -------- --------
Trade and other payables 195,776 344,601 77,042 173,172
Accruals 2,484,630 1,991,735 58,618 53,022
Loans from subsidiary undertakings - - - -
2,680,406 2,336,336 135,660 226,194
------------------------------------ ---------- ---------- -------- --------
Accruals include UK $59k (2021: $53k); Cameroon $2.1 million
(2021: $1.2 million); Namibia $167k (2021: $2k) and South Africa
$190k (2021: $723k) and comprise operational and other asset
related costs due plus amounts payable to Ministerial bodies with
respect to licence tenure, most of which has been settled
subsequent to the year-end.
Group creditor payment days are approximately 30 days (2021: 32
days).
16. Provision for liabilities and charges
Group Company
2022 2021 2022 2021
$ $ $ $
------------- -------- ----- -------- -----
VAT appeals 502,972 - 502,972 -
502,972 - 502,972 -
------------- -------- ----- -------- -----
Following the favourable ruling from the Upper Tribunal received
on 21 May 2021, 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 Company released most of
its provisions which had previously been recorded in respect of VAT
payable.
At the accounts date there remained three further appeals to the
First-Tier Tax Tribunal by HMRC, which were yet to be heard. The
two earlier appeals concerned time periods not covered by the
original Tribunal decisions, to which HMRC had raised procedural
objections which it subsequently withdrew prior to the accounts
date, and these appeals were formally settled after the accounts
date, resulting in a payment (after the accounts date) to the
Company of $422,359 (GBP351,212) which has been recorded in the
accounts as receivable. The third more recent appeal concerns a
revised assessment in respect of time periods covered by the Upper
Tribunal's 21 May 2021 decision. The legal advice received by the
Company is that this revised assessment is incorrect, which is why
the Company only recognises a provision for a potential liability
in respect of this assessment in the 2022 accounts (as opposed to a
liability for VAT in the accounts payable note).
17. Borrowings
Total borrowings for the Group and Company are noted below:
Group Company
2022 2021 2022 2021
$ $ $ $
-------------------------------------------- --------- ------------ --------- ------------
Principal balance at beginning of year 59,532 1,338,726 59,532 1,338,726
Amounts drawn down during the year - - - -
Principal repaid during the year (12,294) (1,278,451) (12,294) (1,278,451)
Currency revaluations at year end (6,149) (743) (6,149) (743)
-------------------------------------------- --------- ------------ --------- ------------
Principal balance at end of year 41,088 59,532 41,088 59,532
Financing costs at beginning of year 818 (7,026) 818 (7,026)
Changes to financing costs during the year - 47,383 - 47,383
Interest expense 925 99,997 925 99,997
Interest paid during the year (1,220) (139,516) (1,220) (139,516)
Currency revaluations at year end (81) (20) (81) (20)
-------------------------------------------- --------- ------------ --------- ------------
Financing costs at the end of the year 442 818 442 818
Carrying amount at end of period 41,530 60,349 41,530 60,349
-------------------------------------------- --------- ------------ --------- ------------
Current 12,244 13,801 12,243 13,802
Non-current 29,286 46,548 29,286 46,548
PRINCIPAL REPAYMENT DATES Group Company
2022 2021 2022 2021
$ $ $ $
-------------------------------------------- --------- ------------ --------- ------------
Due within 1 year 12,244 13,801 12,243 13,802
Due within years 2-5 29,286 46,548 29,286 46,548
Due in more than 5 years - - - -
41,530 60,349 41,530 60,349
-------------------------------------------- --------- ------------ --------- ------------
During the year, 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.
18. Share capital
2022 2021
$ $
--------------------------------------------------------------- ----------- -----------
Authorised, called up, allotted and fully paid
3,554,137,955 (2021: 2,109,172,592) ordinary shares of 0.001p 18,283,317 18,264,803
----------------------------------------------------------------- ----------- -----------
The share capital issues during 2022 are summarised as
follows:
Number of shares Share capital at nominal value Share premium
$ $
----------------------------------------------- ----------------- ------------------------------- --------------
At 1 January 2022 2,109,172,592 18,264,803 148,747,595
Shares issued for cash 1,434,065,363 18,383 3,870,791
Shares issued on settlement of third party
fees 11,200,000 131 29,393
Shares issued in settlement of loan interest - - -
Share issue costs - - (311,476)
At 31 December 2022 3,554,437,955 18,283,317 152,336,303
------------------------------------------------ ----------------- ------------------------------- --------------
In January 2022, the Company raised $2.1 million by placing
576,923,077 shares for cash at 0.260 pence per share.
In August 2022, the Company raised $1.9 million by placing
857,142,286 shares for cash at 0.175 pence per share.
In August 2022, the Company raised GBP30k by placing 11,200,000
shares in settlement of third fees at 0.225 pence per share.
19. 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.
20. 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 2022 and
31 December 2021.
Carrying amount / fair value
2022 2021
Group $ $
-------------------------------------------------------- --------------- --------------
Financial assets (classified as loans and receivables)
Cash and cash equivalents 231,216 10,227
Trade and other receivables 474,749 8,239
Total financial assets 705,965 18,466
--------------------------------------------------------- --------------- --------------
Financial liabilities at amortised cost
Trade and other payables 2,680,406 2,336,336
Borrowings 41,530 60,349
Total financial liabilities 2,721,936 2,396,685
--------------------------------------------------------- --------------- --------------
Carrying amount / fair value
2022 2021
Company $ $
-------------------------------------------------------- --------------- --------------
Financial assets (classified as loans and receivables)
Cash and cash equivalents 159,456 6,232
Trade and other receivables 474,747 8,237
Loans to subsidiary undertakings 20,859,388 17,475,903
Total financial assets 21,493,591 17,490,372
--------------------------------------------------------- --------------- --------------
Financial liabilities at amortised cost
Trade and other payables 87,069 226,194
Borrowings 41,530 60,349
Total financial liabilities 128,599 286,543
--------------------------------------------------------- --------------- --------------
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
2022 2021 2022 2021
$ $ $ $
--------------------------- ------ ------ ------ ------
Cash and cash equivalents 1,122 484 782 419
Borrowings 500 7,725 500 7,725
--------------------------- ------ ------ ------ ------
1,622 8,209 1,282 8,144
--------------------------- ------ ------ ------ ------
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:
2022 2022 2021 2021
Floating interest Non-interest bearing Floating interest rate Non-interest bearing
rate
$ $ $ $
---------------------- --------------------- ----------------------- ---------------------
Cash and cash
equivalents 172,782 58,434 6,935 3,292
----------------------- ---------------------- --------------------- ----------------------- ---------------------
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
2022 2021 2022 2021
Cash and cash equivalents $ $ $ $
-------- ------- -------- ------
Cash and cash equivalents held in US$ 55,874 921 55,874 921
Cash and cash equivalents held in GBP 156,448 8,337 103,582 5,311
Cash and cash equivalents held in XAF 13,326 703 - -
Cash and cash equivalents held in other currencies 5,568 266 - -
---------------------------------------------------- -------- ------- --------
231,216 10,227 159,456 6,232
---------------------------------------------------- -------- ------- -------- ------
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 $243k as at 31
December 2022 (2021: $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
2022 2021 2022 2021
Cash and cash equivalents Rating $ $ $ $
--------------------------- ----------- -------- ------- -------- ------
Barclays Bank plc A+ 159,456 6,232 159,456 6,232
Royal Bank of Scotland A 58,434 3,292 - -
First Afriland Bank No rating 12,947 324 - -
BGFI Bank A+ 379 379 - -
--------------------------- -----------
231,216 10,227 159,456 6,232
--------------------------------------- -------- ------- -------- ------
21. Share-based payments
2022 2021
$ $
-------- --------
In the statement of comprehensive income the Group recognised the following charge with respect
to its share-based payments 363,047 968,711
------------------------------------------------------------------------------------------------ -------- --------
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 2022 are as
follows:
Number in issue
------------------------- ----------------
At 1 January 2022 244,000,000
Awarded during the year 148,000,000
At 31 December 2022 392,000,000
--------------------------- ----------------
Date of grant Number in issue (1) Option price (pence) Latest exercise date WAOP
--------------- -------------------- --------------------- --------------------- ------------
24 Jan 2019 70,000,000 1.250 24 Jan 2024 87,500,000
18 Dec 2020 86,000,000 0.450 18 Dec 2025 38,700,000
01 Apr 2021 88,000,000 0.450 01 Apr 2026 39,600,000
16 Aug 2022 148,000,000 0.300 16 Aug 2027 44,400,000
392,000,000 210,200,000
--------------- -------------------- --------------------- --------------------- ------------
(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:
2022 2021
No. No.
-------------- ------------ ------------
Jeremy Asher 280,000,000 180,000,000
Total 280,000,000 180,000,000
--------------- ------------ ------------
Warrants
Details of warrants outstanding at 31 December 2022 are as
follows:
Number in issue
----------------------------------- ------------------- ---------- ----------------
At 1 January 2022 806,635,644
Awarded during the year 97,773,291
Lapsed during the year (304,439,912)
At 31 December 2022 599,969,023
----------------------------------- ------------------- ---------- ----------------
Date of grant Number in issue Warrant price (pence) Latest exercise date
----------------- ---------------- ------------------------ -----------------------
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 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 10,990,933 0.500 13 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
01 Jan 2022 17,329,020 0.425 01 Jan 2027
13 Jan 2022 7,058,824 0.425 12 Jan 2027
01 Apr 2022 19,851,774 0.263 01 Apr 2027
01 Jul 2022 16,831,240 0.295 01 Jul 2027
01 Aug 2022 10,588,228 0.425 31 Jul 2024
03 Oct 2022 26,114,205 0.250 03 Oct 2027
599,969,023
----------------- ---------------- ------------------------ -----------------------
The following table shows the interests of the Directors in the
share warrants in issue:
2022 2021
No. No.
---------------- ------------ ------------
Jeremy Asher 217,875,279 281,164,127
Paula Brancato 33,238,104 17,212,856
Mark Enfield 31,394,256 15,369,008
Total 282,507,639 313,745,991
----------------- ------------ ------------
The weighted average exercise price of the share warrants was
0.59p (2021: 0.89p) with a weighted average contractual life of 1.8
years (2021: 2.4 years). At 31 December 2022 and 2021 all warrants
had fully vested.
In its Statement of Comprehensive Income, the Company recognised
share-based payment charges of $208k (2021: $446k).
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% (2021: 20% and 111%), depending
upon the date of grant, and the risk-free interest rate was 0.50%
(2021: 0.25%) and the Dividend Yield was nil% for 2022 and
2021.
The Company's share price ranged between 0.2p and 0.4p (2021:
0.2p and 0.5p) during the year. The closing price on 31 December
2021 was 0.2p per share (2021; 0.4p). The weighted average exercise
price of the share options was 0.5p (2021: 0.7p) with a weighted
average contractual life of 3.3 years (2021: 3.5 years). The total
number of options vested at the end of the year was 185.3 million
(2021: 131.8 million).
22. 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 $381k (2021: $232k) in fees for
management services 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
2022 2021 2022 2021
$ $ $ $
-------------------------------------------------------------------------- ---------- ---------- -------- --------
Fees charged by companies associated with Jeremy Asher (1) 381,428 231,952 - -
Interest charged on borrowings by companies associated with Jeremy Asher
(1) - 124,743 - 124,743
Share-based payments (2) 242,896 481,042 242,896 481,042
Finance interest on intercompany loan accounts 536,375 184,873 536,375 184,873
Fees charged with respect to the provision of strategic advice and
support by the parent 104,911 90,975 104,911 90,975
1,265,610 1,113,585 884,182 881,633
-------------------------------------------------------------------------- ---------- ---------- -------- --------
(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.
The following amounts were owed by subsidiary undertakings at
the balance sheet date:
Tower
Rift Resources Tower Tower
Petroleum Rift (Namibia) Resources Resources Tower
Holdings Petroleum Holdings Namibia Cameroon Resources
Limited Limited Limited Limited Limited Cameroon SA TOTAL
($000) ($000) ($000) ($000) ($000) ($000) ($000)
----- --------------- ---------------- --------------- --------------- --------------- --------------- --------
2022 2,616 1,885 18 362 6 15,974 20,861
2021 1,999 1,727 15 234 4 13,498 17,477
----- --------------- ---------------- --------------- --------------- --------------- --------------- --------
23. Control
The Company is under the control of its shareholders and not any
one party.
24. Leases and capital commitments
The Group is committed to funding the following exploration
expenditure commitments as at 31 December 2022:
Country Interest 2023 2024 onwards
------------------------------------------ -------------- --------- --------------- -------------
Cameroon Thali (1) Cameroon 100% $8.40 million -
South Africa Algoa-Gamtoos (2) South Africa 50% $3.39 million -
Namibia Blocks 1910A, 1911 and 1912B (3) Namibia 80% $4.50 million -
$16.29 million -
--------------------------------------------------------- --------- --------------- -------------
(1) to 11 May 2023
(2) period ends on completion of work programme commitments
(3) to November 2023, right of extension available
25. Subsequent events
16 January 2023: Facility Agreement with Energy Exploration
Capital Partners LLC ("EECP") to raise $1.25 million. The facility
provides for further convertible advances of up to $4.75 million
subject to certain conditions.
15 February 2023: Issue of 23.2 million warrants in lieu of
GBP30,000 (in aggregate) of Directors fees in respect of the period
January-March 2023, to conserve the Company's working capital. The
warrants are exercisable at a strike price of 0.175 pence (0.21c)
per share. The warrants are exercisable for a period of five years
from the date of issue.
30 March 2023: Share issuance in accordance with the terms of
the investment deed with EEPC announced on 16 January 2023, of
102,543,067 ordinary shares of 0.001 pence each. The purchase price
of 0.12 pence (0.15c) per Ordinary Share for the settlement amount
of $150,000 had been prepaid by EEPC as part of the 16 January
advance.
27 April 2023: Cameroon operational update covering:
-- Application for a one-year extension of the initial
exploration period of the PSC, following positive discussions with
the Minister of Mines, Industry and Technological Development and
the Prime Minister of the Republic of Cameroon.
-- Ongoing discussions with rig owners and operators with the
aim to secure rig availability in the third and fourth quarter of
this year to drill at NJOM-3.
-- Ongoing negotiations for a term loan of approximately $7
million with BGFI Bank Group and asset-level financing with several
other parties.
-- Updated resource estimates and risks for the reservoirs
connected to the NJOM-1 and the NJOM-2 discovery wells,
substantially lowering risk attributed to PS9 Sup and PS3 HW
reservoirs, and increasing total risked pMean prospective resources
to 35.4 million bbls.
-- Deployment of software to conduct detailed attribute analysis
of the reprocessed 3D seismic data to identify the oil and gas
elements of the reservoirs in the Njonji-1 and Njonji-2 fault
blocks, resulting in a clearer picture of the pay zones in both
fault blocks.
2 May 2023: Issue of 34.4 million warrants in lieu of GBP30,000
(in aggregate) of Directors fees in respect of the period
April-June 2023, to conserve the Company's working capital. The
warrants are exercisable at a strike price of 0.1425 p (0.18c) per
share, a premium of 24% over the mid-point closing share price on
28 April 2023. The warrants are exercisable for a period of five
years from the date of issue.
16 May 2023: Placing and subscription of 4,600 million shares to
raise GBP2.3 million ($2.9 million) at a price of 0.05p (0.06c) per
share.
16 June 2023: Namibia technical update setting out initial
conclusions from basin modelling work prior to and after the
accounts date.
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 GPUQWQUPWGBQ
(END) Dow Jones Newswires
June 19, 2023 02:00 ET (06:00 GMT)
Grafico Azioni Tower Resources (LSE:TRP)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Tower Resources (LSE:TRP)
Storico
Da Mag 2023 a Mag 2024
