Tower Resources PLC Cameroon Update (0053I)
30 Marzo 2020 - 8:00AM
UK Regulatory
TIDMTRP
RNS Number : 0053I
Tower Resources PLC
30 March 2020
30 March 2020
Tower Resources plc
Cameroon Update
Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)),
the AIM-listed oil and gas company with its focus on Africa, is
pleased to announce updates in respect of its Thali Production
Sharing Contract ("PSC") in Cameroon, conducted through its
wholly-owned subsidiary Tower Resources Cameroon SA, and its
binding heads of terms ("HoT") in respect of a farm-out of a 24.5%
interest in the PSC to OilLR Pty Ltd ("OilLR").
Petroleum operations in Cameroon have already been affected by
consequences of the Covid-19 pandemic, including international
travel restrictions, and the Republic of Cameroon introduced its
own travel restrictions on March 17(th) . Service providers are
therefore temporarily limited in what they can do locally, as is
Tower itself, and so the Company last week notified the Ministry of
Mines, Industry and Technological Development ("MINMIDT") of an
event of Force Majeure under the terms of the PSC. During a period
of Force Majeure the parties' obligations under the agreement are
temporarily suspended, so that the same period of about seven
months remaining under the current exploration period as at 17(th)
March should still remain once the Force Majeure period ends,
without any further extension being requested.
The Company has informed MINMIDT that at this stage it is still
possible that NJOM-3 could be spudded prior to 15(th) September
2020 despite the Force Majeure, if the situation returns to normal
quickly enough, but this is now inherently uncertain; however in
any event the Company remains committed to drilling NJOM-3 as
quickly as possible.
The Company and OilLR have also agreed to amend their HoT to
extend the proposed completion date to 30(th) June, 2020. Tower is
satisfied that OilLR's intended investors have the funds to
complete the intended farm-in, and both Tower and OilLR are still
committed to completing the transaction, but both parties also
agree that the transaction cannot be completed until the
environment stabilises sufficiently for the project to move
forward.
The Company is continuing discussions with other potential
investors in the Thali PSC, and while it fully expects OilLR to
complete the agreed farm-in as set out in the HoT, the Company has
also agreed with OilLR that in the event it receives additional
offers of firmly committed funds which aggregate to more than $15
million, and if (and only if) OilLR is unable to make an escrow
payment on an agreed schedule, then the Company will have the right
to reduce OilLR's share of the total farm-out down to a minimum of
$5 million to accommodate the other potential investors. This is to
ensure that extending the completion schedule will not materially
delay the Company's access to funding from other sources as
well.
The other terms of the HoT with OilLR are unchanged.
Jeremy Asher, Tower's Chairman and CEO, commented:
"We are glad that our partners at OilLR remain committed to the
Thali project despite recent market upheavals and despite the
operational delays required by the global response to the Covid-19
pandemic. As our recently released update to the Oilfield
International Reserve Report has highlighted, the Thali project
economics remain very attractive at current Brent prices, with
forward prices still well above $40 per barrel during our expected
production period. The Force Majeure provisions of our PSC are
designed to provide breathing space in precisely this kind of
situation, and we are already planning and discussing with service
companies how we can move forward as quickly as possible when
things return closer to normal."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Contacts
Tower Resources plc info@towerresources.co.uk
Jeremy Asher
Chairman and CEO
Andrew Matharu
VP - Corporate Affairs
SP Angel Corporate Finance
LLP
Nominated Adviser and
Joint Broker
Stuart Gledhill
Caroline Rowe + 44 20 3470 0470
Turner Pope Investments
(TPI) Limited
Joint Broker
Andy Thacker
Zoe Alexander + 44 20 3657 0050
Whitman Howard Limited
Joint Broker
Nick Lovering + 44 20 7659 1234
Notes:
Tower Resources Cameroon S.A, a wholly-owned subsidiary of Tower
Resources plc, holds a 100% interest in the shallow water Thali
(formerly known as "Dissoni") Production Sharing Contract (PSC), in
the Rio del Rey basin, offshore Cameroon. Tower was awarded the PSC
on 15 September 2015 for an Initial Exploration Period of 3
years.
The Thali PSC covers an area of 119.2 km(2), with water depths
ranging from 8 to 48 metres, and lies in the prolific Rio del Rey
basin, in the eastern part of the Niger Delta. The Rio del Rey
basin has, to date, produced over one billion barrels of oil and
has estimated remaining reserves of 1.2 billion barrels of oil
equivalent ("boe"), primarily within depths of less than 2,000
metres. The Rio del Rey is a sub-basin of the Niger Delta, an area
in which over 34.5 billion barrels of oil has been discovered, with
2.5 billion boe attributed to the Cameroonian section.
An independent Reserve Report conducted by Oilfield
International Limited (OIL) has highlighted the contingent and
potential resources on the Thali licence and the associated
Expected Monetary Value (EMV) as follows:
-- Gross mean contingent resources of 18 MMbbls of oil across
the proven Njonji-1 and Njonji-2 fault blocks;
-- Gross mean prospective resources of 20 MMbbls of oil across
the Njonji South and Njonji South-West fault blocks;
-- Gross mean prospective resources of 111 MMbbls of oil across
four identified prospects located in the Dissoni South and Idenao
areas in the northern part of the Thali licence;
-- Calculated NPV10 of the Best Estimate of Contingent Resources
using the March 10(th) 2020 Brent Forward Curve of $119 million,
with an EMV10 of $91 million.
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END
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