TIDMTRP
RNS Number : 8861P
Tower Resources PLC
15 October 2019
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO
OR FROM THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH
AFRICA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF SUCH
JURISDICTION.
This announcement does not constitute a prospectus or offering
memorandum or an offer in respect of any securities and is not
intended to provide the basis for any decision in respect of Tower
Resources PLC or other evaluation of any securities of Tower
Resources PLC or any other entity and should not be considered as a
recommendation that any investor should subscribe for or purchase
any such securities.
15 October 2019
Tower Resources plc
Extension and Restructuring of the Bridging Loan Facility
Proposed Placing and Subscription to raise approximately
GBP1,500,000
Proposed issue of Fee Shares
Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)),
the AIM listed oil and gas company with its focus on Africa,
announces the extension and restructuring of its Bridging Loan
Facility (the "Facility") of US$750,000, details of which were
first announced on 16 April 2019, and an intention to raise gross
proceeds of approximately GBP1,500,000 through a placing and
subscription of approximately 461.54 million new ordinary shares of
0.001 pence each (the "Placing Shares") at a price of 0.325 pence
per Placing Share (the "Placing Price") with each participant
receiving 1 warrant exercisable for three years at 1p per share for
every 3 shares subscribed (the "Placing"). It is intended that
Jeremy Asher, Chairman and CEO, will subscribe for GBP700,000 of
new ordinary shares as part of the Placing.
Cameroon Update
The Company has signed Letters Of Intent ("LOIs") regarding the
NJOM-3 well on the Njonji structure within the Company's Thali
license with both COSL, in respect of its Seeker jack-up drilling
rig (as previously notified), and also Geoquip Marine, in respect
of its MV Investigator technical services vessel. The MV
Investigator, which is now in West Africa, can execute the site
survey at Njonji, including boreholes to test the underwater soil
consistency, which needs to be done before the drilling rig can be
brought onto site. The Company's subsidiary, Tower Resources
Cameroon Ltd (the "Operator"), has applied to the Ministry of
Mines, Industry and Technological Development for a further
extension of the initial exploration period of the license to allow
completion of the NJOM-3 well, and the Company expects this
extension to be granted on the execution of a firm contract in
respect of the site survey.
Restructuring and Extension of the Bridging Loan Facility
As previously noted, the Facility announced on 16 April 2019 had
been extended until 31 August 2019 and since this time has
continued to accrue interest of 1% per month (to be paid on
repayment). The Company has agreed with Pegasus Petroleum Ltd
("Pegasus"), a company beneficially owned by the Company's Chairman
Jeremy Asher, that Pegasus will advance further funds to the
Company as part of the Facility to allow it to repay the other
Facility lenders their US$375,000 principal in full together with
accrued interest under the Facility. Pegasus will then hold 100% of
the Facility, amounting to US$750,000 and the terms of the Facility
will be amended.
The repayment date of the Facility will be extended to 30 June
2020, and although the Facility will continue to have a
preferential right of repayment from future financing, the
threshold for such repayment will be raised to US$2.5 million in
respect of any single fundraising and US$5 million in cumulative
fundraising and, in particular, repayment is waived in respect of
the current Placing (the "Extension"). The Facility will remain
secured with a fixed and floating charge over the Company's assets
with interest due of 1% per month (to be accrued and paid on
repayment).
In consideration for the Extension, it has been agreed that
Pegasus will receive a possible additional consideration from Tower
contingent upon Tower itself receiving cash flow arising from the
Thali license. The Company is presently seeking to put in place a
royalty to be paid to Tower comprising up to 10% of the
contractor's share of production from Thali, and such a royalty
also forms part of the farm-in terms being discussed with
prospective partners. At present, the Company does not have
agreements in place to receive any such royalties, but provided
such agreements can be put in place, then Pegasus will receive a
quarter share of any such royalties. Such an uncertain royalty
share is difficult to value but it cannot exceed 2.5% of the value
of the contractor's share of production arising from Thali, and if
there is no such production then there will be no royalties. The
purpose of this is to provide a success-based and profit-related
incentive to Pegasus to extend the Facility as required in order to
secure financing for the Thali license, that is substantially less
than the return which a similar investment in the Company's equity
today may be expected to achieve in the case of success at Thali,
but which reflects the risk of the extended Facility and without
issuing further warrants or incurring any further cost to the
Company unless the Thali license can be successfully put into
production.
The Extension constitutes a related party transaction in
accordance with AIM Rule 13. Accordingly, Peter Taylor and David M
Thomas, acting as the independent Directors, consider, having
consulted with the Company's Nominated Adviser, SP Angel Corporate
Finance LLP, that the terms of the Extension are fair and
reasonable insofar as the Company's shareholders are concerned.
The Placing
Whilst financing negotiations continue regarding the Thali
license, the Company is proposing to raise approximately
GBP1,500,000 for working capital purposes via the Placing.
In order to provide Pegasus and Jeremy Asher respectively with
sufficient time to realise other assets to facilitate the further
advance by Pegasus under the Facility and the planned subscription
by Jeremy Asher for GBP700,000 of new ordinary shares in the
Placing, and to allow certain of the other Facility Lenders to use
some or all of their repayments from the Facility to participate in
the Placing, the Placing is expected to comprise two tranches:
-- the first tranche of GBP401,250, comprising a placing and
subscription for approximately 123,461,538 new ordinary shares (the
"First Tranche") including GBP100,000 of Jeremy Asher's
subscription will be unconditional;
-- the second tranche of GBP1,098,750, comprising a subscription
for approximately 338,076,923 new ordinary shares (the "Second
Tranche") including GBP600,000 of Jeremy Asher's subscription is
conditional on:
(i) the receipt by the Company of the further advance by Pegasus
of US$375,000 plus accrued interest under the Facility; and the
repayment by the Company to the other Facility lenders of their
US$375,000 principal together with accrued interest; and
(ii) completion of the subscription by Jeremy Asher for the
remaining GBP600,000 of new ordinary shares as part of the
Placing.
Completion of the First Tranche is expected on or around 21
October 2019 and completion of the Second Tranche is expected on or
around 12 November 2019.
The warrants to be issued in respect of the Placing are
contingent on the Company receiving an increase in the authority of
the Board to allot shares that is sufficient to cover these
warrants at its next AGM or EGM.
The Placing funds will allow the Company to cover ongoing
operational costs, pay creditors and also secure the services of
Geoquip Marine's MV Investigator to undertake the site survey and
drill boreholes, which is the final operational step needed prior
to being able to bring the drill rig itself to the site.
In addition to the Placing, the Company expects to issue
additional equity, comprising approximately 50,784,000 shares on
the same terms and with the same attached warrants as the Placing
(the "Fee Shares"), to some service providers in lieu of GBP165,048
fees either already accrued or to be accrued over the next six
months.
Finally, as in previous quarters, the Company has asked certain
directors to accept warrants in lieu of a portion of their director
fees, totalling GBP15,000 for the fourth quarter of 2019 (the
"Director Warrants"), in order to conserve the Company's cash.
A further announcement is expected to be made shortly in
connection with the proposed Placing, Fee Shares and issue of
Director Warrants.
Jeremy Asher, Chairman and CEO, commented: "I am pleased to have
received the support of new and existing investors in Tower and I
hope my personal commitment to the Placing and Facility (including
the latter's extension) serves as a demonstration of my own
confidence in being able to develop the Thali license, on which we
continue to talk with potential financing partners. With this
financing being completed and the recent, albeit early-stage,
interest being shown by an oil major in our Namibian assets, I
remain confident in the future prospects of the Company and look
forward to updating the market with progress across our
portfolio."
Note regarding forward-looking statements
This announcement contains certain forward-looking statements
relating to the Company's future prospects, developments and
business strategies. Forward-looking statements are identified by
their use of terms and phrases such as "targets" "estimates",
"envisages", "believes", "expects", "aims", "intends", "plans",
"will", "may", "anticipates", "would", "could" or similar
expressions or the negative of those, variations or comparable
expressions, including references to assumptions.
The forward-looking statements in this announcement are based on
current expectations and are subject to risks and uncertainties
which could cause actual results to differ materially from those
expressed or implied by those statements. These forward-looking
statements relate only to the position as at the date of this
announcement. Neither the Directors nor the Company undertake any
obligation to update forward looking statements, other than as
required by the AIM Rules for Companies or by the rules of any
other applicable securities regulatory authority, whether as a
result of the information, future events or otherwise. You are
advised to read this announcement and the information incorporated
by reference herein, in its entirety. The events described in the
forward-looking statements made in this announcement may not
occur.
Neither the content of the Company's website (or any other
website) nor any website accessible by hyperlinks on the Company's
website (or any other website) is incorporated in, or forms part
of, this announcement.
Any person receiving this announcement is advised to exercise
caution in relation to the Placing. If in any doubt about any of
the contents of this announcement, independent professional advice
should be obtained.
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
Yellow Jersey PR Limited +44 20 3735 8825
Sarah Hollins
Henry Wilkinson
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 EMV10s of US$118 million for the contingent
resources, and US$82 million for the prospective resources,
respectively.
In accordance with the guidelines for the AIM market of the
London Stock Exchange, Dr Mark Enfield, BSc, PhD, FGS, Advisor to
the Board of Tower Resources plc, who has over 30 years' experience
in the oil & gas industry, is the qualified person that has
reviewed and approved the technical content of this
announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
IOECKPDKBBDKAKD
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