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.
Jeremy Asher, chief executive
How it’s doing
During the first half of 2020 the company secured an extension to the exploration phase of the Thali PSC by one year and the declaration of Force Majeure came into effect from March 17 amidst the pandemic.
A site survey was successfully completed earlier in the year and binding terms were executed for OilLR Ltd’s dealt to acquire 24.5% of the project by covering US$7.5mln of well costs. An independent reserves report was updated to confirm cross mean contingent resources of 18mln barrels, before exploration upside potential, giving a value of US$179mln for that portion of the project.
Since the end of the first half a number of interim funding supports and measures have been put in place, including extensions to a loan facility with Pegasus Petroleum, an agreement with Shard Merchant Capital and a US$200,000 share subscription.
The Thali project has a mean figure of 111 million barrels (MMbbls) of oil identified across four prospects in the northern part of the Thali licence and 20 MMbbls of oil identified at the Njonji South and Njonji South-West fault blocks.
Using a 10% discount the value of the prospective resources is US$82mln.
Jeremy Asher, chairman and chief executive of Tower, has said the group expected the Njonji-3 well to transform the 18mln barrels of Pmean contingent resources on the Njonji structure into reserves, which would be “transformative” for the project and Tower.
In July, it announced a further extension of its loan facility of US$750,000 with Pegasus Petroleum Ltd until 15 August.
The Njonji-3 (NJOM-3) well will be drilled to a total depth of 1,100 metres intersecting at least three reservoir zones already identified.
A farm-out a 24.5% working interest in Thali to Australia-based private company OiLR is et to complete next month.
The backstop date for completion is September 15, 2020, and both parties hope to have all funds in escrow well before that date.
Tower Resources has held discussions with other potential farm-in partners to the Thali PSC, on similar terms to those agreed with OilLR.
The farm-out will provide US$7.5mln towards the cost of the NJOM-3 well at Thali, which has an estimated total cost of US$15-16mln.
Tower will also receive an overriding 10% royalty from the contractor’s share of production to cover costs already sunk into the well.
Elsewhere, Tower has a 50% stake in the Algoa-Gamtoos exploration area offshore South Africa that sits immediately adjacent to Total’s huge gas condensate discovery at Brulpadda.
Total encountered 57 metres of net pay in Lower Cretaceous reservoirs with an estimated one billion barrels at least of condensate.
Tower’s Algoa-Gamtoos contains an area of the same deepwater basin margin.
The group also has an 80% interest in three exploration areas (blocks 1910A, 1911 and 1912B) that cover a total of 23,297 square kilometres in the Walvis Basin and Dolphin Graben offshore Namibia.
An initial four year exploration period requires a minimum spend of $5mln on work.
It will include the acquisition and reprocessing of existing 2D seismic data and new seismic.
What the boss says, chairman Jeremy Asher
While the timing of the removal of travel and other restrictions remains uncertain, we are using this time to get as fully prepared as we can for drilling and testing the NJOM-3 well.”
- Finance and spudding of NJ0M3 well
- Results from NJ0M3 well
- Talks over Namibia acreage lead to a deal