Tower Resources Provides Update on Thali, PEL 94 Projects
- Extension of the initial period of the Exploration Phase of the Thali PSC, offshore Cameroon by one year (from 15 September 2019) for the purposes of completing the NJOM-3 well, and declaration of Force Majeure with effect from 17 March 2020 due to travel and operational restrictions arising from the Covid-19 pandemic.
- Thali PSC, offshore Cameroon, site survey successfully completed by the Geoquip Marine survey vessel MV Investigator with the drilling of three boreholes to a depth of 80 metres each.
- Binding Heads of Terms executed with respect to a farm-out of the Thali PSC with OilLR Pty Ltd for a 24.5% working interest covering US$7.5 million of the costs of the NJOM-3 well.
- Release of an updated independent Reserves Report from Oilfield International Limited covering the Thali PSC, confirming Gross mean contingent resources of 18 MMbbls of oil across the proven Njonji-1 and Njonji-2 fault blocks with an NPV10 of US$179 million and EMV10 of US$143 million.
- Update on Namibian licences and farm-out discussions on PEL 96 included a significant announcement of updated resource estimates by Global Petroleum Ltd on its adjoining PEL 94, which includes the Welwitschia Deep Albian Carbonate prospect, a large part of which is within the Company’s PEL 96.
- Chairman and Chief Executive Officer, Jeremy Asher, said:
‘The first six months of 2020 have presented enormous challenges both to our Company and to the industry as a whole. In our annual report I already discussed the events of this period up to 6 June 2020, and since that time we have continued to work on finding solutions to the challenge of executing the NJOM-3 well while accommodating the various health and travel restrictions in place, and also the natural concerns of a range of personnel across a number of different subcontractors. We are confident that this can be done, but it is not simple. We have also continued working on our well financing and the second stage financing that will be required after we have the appraisal results from the NJOM-3 well, but naturally this is also linked to finalising the well schedule itself.
In July we had interesting news from our neighbours in Namibia, Global Petroleum Ltd, regarding their updated assessment of the Welwitschia Deep Albian carbonate prospect. As I mentioned at the time, Global’s estimates of recoverable resources in respect of this prospect, if they materialise, would imply some 224 million barrels of recoverable resources in Tower’s PEL 96 section of that structure, of which about 179 million barrels would be attributable to Tower. To see these estimates materialise would require Global to drill this prospect successfully, but the important point is that this would not require any investment on Tower’s part.
In mid-August, we were pleased to see the spudding of Total’s Luiperd exploration well on Blocks 11B/12B offshore South Africa, following its successful 1-billion boe Brulpadda discovery on the same blocks. Africa Energy, a minority partner in the well, has said that it believes the chance of success of this well is over 80%, and we certainly hope this proves correct. The Luiperd well, if successful, will further de-risk the whole Outeniqua basin in South Africa. Tower, together with operator NewAge, hold the block immediately to the East of Total’s blocks 11B/12B, which contains a substantial prospect in the Outeniqua basin, analogous to Brulpadda.
At the end of August 2020, we extended our loan facility provided by Pegasus Petroleum Ltd, and added a second loan facility on similar terms with Shard Merchant Capital Ltd as well as issuing new shares to Shard and to Pegasus for further cash and in lieu of past and future interest on those facilities. This provided the Company with, in aggregate, just under US$700,000 of additional funds net of fees, which provides us with further runway to get the NJOM-3 well underway, and its financing completed. I remain confident that this will be done.
These are challenging times, but we do believe that we will surmount these challenges. We are excited about our Thali project in Cameroon, and our Namibian and South African projects, and we believe that there are still more great opportunities to create value in the oil and gas business in Africa. We look forward to capitalising on these opportunities in the months and years ahead.‘