Tower Resources has entered into two farm-out agreements with Prime Global Energies for interests in offshore Cameroon and Namibia. The agreements involve a 42.5% interest in the Thali license and a 25% interest in PEL96, with significant financial contributions aimed at facilitating future drilling activities. Completion of the agreements is expected by Q1 2025, contingent on government approvals.
Tower Resources, a U.K.-based oil and gas company, has finalized two significant farm-out agreements with Prime Global Energies for interests in its licenses in offshore Cameroon and Namibia. The first agreement will see Tower Resources transfer a 42.5% non-operated interest in its Thali license in Cameroon, for which Prime will contribute $15 million towards the work program, including drilling the NJOM-3 well planned for 2025. However, the well’s timing is contingent upon government approvals, which may influence the scheduling depending on available drilling rigs and necessary equipment mobilization.
Additionally, Prime has agreed to acquire a 25% non-operated interest in PEL96, located offshore Namibia. Tower Resources will receive immediate financial support of $937,500 and a total cash payment of $4.4 million upon completion of the agreements, which is expected by late Q1 2025, pending necessary consents.
Jeremy Asher, the Chairman and CEO of Tower Resources, expressed optimism regarding the funding’s impact on their operations. The financial influx should facilitate drilling in the Thali license, while also enhancing understanding of the PEL96 license’s potential. He emphasized the flexibility shown during negotiations, leading to amendments in existing payment agreements to ensure that Tower retains a substantial interest in its licenses. Asher stated that the company aims to progress across its asset base and create value for stakeholders, reinforced by the liquidity these agreements will provide, allowing for more confident execution of work programs.
The farm-out agreements signify Tower Resources’ strategic approach to leverage its assets while minimizing financial strain. By partnering with Prime for non-operated interests, Tower aims to tap into additional funding that will enhance its operational capacity without incurring significant costs. These transactions are crucial as the oil and gas sector often requires substantial upfront investment for exploration and development, necessitating partnerships that can share both risks and rewards efficiently. Additionally, the emphasis on government approvals highlights the regulatory nature of the oil and gas industry, where legal compliance can significantly influence project timelines. The agreements relate to two significant licenses: Thali in Cameroon and PEL96 in Namibia, both of which have immense potential for exploration and production. The planned NJOM-3 well in Cameroon is a critical milestone anticipated to bolster Tower’s standing in the sector, while PEL96’s prospectivity continues to be appreciated, demonstrating the dual-focus strategy of the company on its diverse assets.
In conclusion, Tower Resources has successfully negotiated farm-out agreements with Prime Global Energies, promoting financial sustainability and operational growth in its core projects. The agreements, involving funding for drilling and additional cash payments, pave the way for progress in both Cameroon and Namibia. As the company navigates the complexities of regulatory approvals and operational timelines, it remains committed to maximizing stakeholder value and enhancing its exploration activities worldwide. These developments signify a proactive approach to managing asset portfolios within the dynamic oil and gas market.
Original Source: www.oedigital.com
