Tower Resources has signed two farm-out agreements with Prime Global Energies for 42.5% of the Thali license in Cameroon and 25% of the PEL96 license in Namibia. The agreements include $15 million for operational funding and total cash payments of $4.4 million. Completion is expected by the first quarter of 2025, pending necessary approvals.
Tower Resources, a U.K.-based oil and gas firm, has established two significant farm-out agreements with Prime Global Energies, concerning minority, non-operated stakes in its licenses located in Cameroon and Namibia. The arrangement includes a 42.5% non-operated interest in the Thali license off the coast of Cameroon, facilitating a financial contribution of $15 million towards operational costs, including the drilling of the NJOM-3 well in 2025.
The execution of this well will depend significantly on governmental approvals for the farm-out as well as an extension of the First Exploration Period, which currently concludes on February 4, 2025. The completion schedule is influenced by the availability of drilling rigs, which entails careful coordination of equipment mobilization and personnel readiness.
In Namibia, Tower Resources, through its subsidiary, has also finalized a farm-in agreement granting Prime a 25% non-operated interest in the PEL96 license. This agreement encompasses additional cash payments totaling $4.4 million, with an immediate payment of $937,500 and a subsequent $3.4 million following the completion of the agreements. Both arrangements are anticipated to finalize by the end of the first quarter of 2025, subject to requisite governmental and regulatory approvals.
Tower’s Chairman and CEO, Jeremy Asher, emphasized the significance of these agreements, stating that the funding from Prime will enable Tower to meet its drilling commitments in Cameroon while also acknowledging the previously unrecognized potential of the PEL96 license. Furthermore, changes to the Pegasus Facility Agreement were negotiated to allow for a more favorable financial structure, wherein a portion of production payments will enable Tower to maintain a more substantial interest in the licenses while still securing cash injections for operations.
The farm-out agreements between Tower Resources and Prime Global Energies come against the backdrop of the evolving oil and gas exploration landscape in Africa. Tower Resources has been working to optimize its asset base, particularly through the Thali license in Cameroon and the PEL96 license in Namibia. These strategic partnerships are not only aimed at facilitating immediate capital influx for operational purposes but also enhancing the company’s long-term exploration objectives in these regions, which are known for their untapped hydrocarbon potential. The successful execution of these agreements hinges on obtaining governmental approvals, which are critical in the resource extraction sector.
In conclusion, Tower Resources’ farm-out agreements with Prime Global Energies represent a strategic move to enhance its operational funding and explore resources more effectively in Cameroon and Namibia. These agreements are expected to provide much-needed liquidity to Tower, allowing for vital drilling commitments and further exploration of significant oil reserves. The outcome of these transactions will depend heavily on forthcoming governmental approvals and operational logistics.
Original Source: www.oedigital.com
