AIM-listed Tower Resources, the Africa-focused energy company, has provided an update on its financing activity in respect of its Thali Production Sharing Contract (PSC), in the Rio Del Rey sedimentary basin offshore Cameroon.
Tower has announced that its subsidiary, Tower Resources Cameroon S.A ('TRCSA'), has been notified by BGFI Bank Group, the largest bank group in Central Africa, that the medium term loan of approx. US$7 million for which TRCSA and BGFI agreed a term sheet at the end of June 2022, has been approved by the credit committee of the Cameroon bank. Further approval is still required at the BGFI group level and discussions are now turning to the details of the structure and documentation, as well as a potential modest enlargement of the facility.
Whilst the Company aims to complete these discussions as quickly as possible, it cannot be certain of when final approval will be received, if it is successful.
As previously disclosed, the Loan should cover around 40% of the approximate US$18 million cost of the well, with a further amount of 25% already having been paid for by TRCSA. The balance of 35% of the cost of the well is also to be funded by TRCSA. This balance may be funded by further financing at the asset level, or with corporate funds.
The Company is continuing to discuss additional financing options at the asset level, including with BGFI. The Company's current plan is to complete the Loan financing documentation, if possible, before seeking to conclude any further bank discussions.
Jeremy Asher, Tower's Chairman and CEO, commented:
'We are very happy with the progress in our discussions with BGFI Bank Group, and the support that the local bank has shown towards our project in Cameroon.
'Discussions regarding the rig options with suppliers and other operators are also continuing as expected. As previously announced, long lead items for the well have already been purchased, and the environmental and social impact assessment, site survey and site debris survey are complete. Therefore, we are in a position to move quickly once a rig slot is finalised.
'We remain very confident that we will be able to drill the NJOM-3 well in good time and thank our shareholders for their patience while we seek to conclude these discussions.'
Source: Tower Resources