Tower Resources, the AIM listed oil and gas company with its focus on Africa, has announced its preliminary results for the 12 months ended 31 December 2022.
Highlights:
- In Cameroon, the Group's exploration and evaluation expenditure on the Thali Production Sharing Contract ("PSC") amounted to $3.1 million (2021: $1.3 million). A formal request for extension of the First Exploration Period of the PSC to 11 May 2024 has been submitted to the Minister of Mines, Industry and Technological Development ("MINMIDT") and the Company has been informed that processing of this extension is underway. Other Cameroon highlights include:
- Discussions continued with rig owners and operators with the aim to secure rig availability in the third and/or fourth quarter of 2023 to drill the NJOM-3 well.
- Discussions continued for asset level financing with several parties, including a term loan of approximately $7 million with BGFI Bank Group.
- Updated resource estimates and risk profiles were developed for the reservoirs connected to the NJOM-1 and the NJOM-2 discovery wells, substantially lowering risk attributed to PS9 Sup and PS3 HW reservoirs, and increasing total risked pMean prospective resources to 35.4 million bbls.
- In South Africa, operator NewAge continued to work towards the acquisition of 3D seismic over the permit area.
- In Namibia Tower has been conducting basin modelling to support technical evaluation of the leads identified to date as part of the work programme for the Initial Exploration Period for PEL 96. The Company is now moving forward with more detailed and focused geological and geophysical analysis aiming to high-grade areas for further seismic data acquisition. Once this work has been completed, Tower is planning to acquire new 3D seismic data over the most promising leads/prospects in line with its work programme.
- Following the favourable VAT rulings from the Upper Tribunal in 2022 with respect to the Group's UK VAT position, of the three remaining appeals outstanding at the year-end, two have been settled with a further appeal remaining under discussion. The Company received £351k ($422k) in settlement of the first two appeals, after the accounts date.
- Administrative costs net of share-based payment charges of $631k (2021: $762k) include legal fees incurred totalling $133k (2021: $263k)
- Cash balance at year-end of $231k (2021: $10k)
Post-reporting period events:
16 January 2023: Facility Agreement with Energy Exploration Capital Partners LLC ("EECP") to raise $1.25 million. The facility provides for further convertible advances of up to $4.75 million subject to certain conditions.
15 February 2023: Issue of 23.2 million warrants in lieu of £30,000 (in aggregate) of Directors fees in respect of the period January-March 2023, to conserve the Company's working capital. The warrants are exercisable at a strike price of 0.175 pence (0.21¢) per share. The warrants are exercisable for a period of five years from the date of issue.
30 March 2023: Share issuance in accordance with the terms of the investment deed with EEPC announced on 16 January 2023, of 102,543,067 ordinary shares of 0.001 pence each. The purchase price of 0.12 pence (0.15¢) per Ordinary Share for the settlement amount of $150,000 had been prepaid by EEPC as part of the 16 January advance.
27 April 2023: Cameroon operational update covering:
- Application for a one-year extension of the initial exploration period of the PSC, following positive discussions with the Minister of Mines, Industry and Technological Development and the Prime Minister of the Republic of Cameroon.
- Ongoing discussions with rig owners and operators with the aim to secure rig availability in the third and fourth quarter of this year to drill at NJOM-3.
- Ongoing negotiations for a term loan of approximately $7 million with BGFI Bank Group and asset-level financing with several other parties.
- Updated resource estimates and risks for the reservoirs connected to the NJOM-1 and the NJOM-2 discovery wells, substantially lowering risk attributed to PS9 Sup and PS3 HW reservoirs, and increasing total risked pMean prospective resources to 35.4 million bbls.
- Deployment of software to conduct detailed attribute analysis of the reprocessed 3D seismic data to identify the oil and gas elements of the reservoirs in the Njonji-1 and Njonji-2 fault blocks, resulting in a clearer picture of the pay zones in both fault blocks.
2 May 2023: Issue of 34.4 million warrants in lieu of £30,000 (in aggregate) of Directors fees in respect of the period April-June 2023, to conserve the Company's working capital. The warrants are exercisable at a strike price of 0.1425 p (0.18¢) per share, a premium of 24% over the mid-point closing share price on 28 April 2023. The warrants are exercisable for a period of five years from the date of issue.
16 May 2023: Placing and subscription of 4,600 million shares to raise £2.3 million ($2.9 million) at a price of 0.05p (0.06¢) per share.
16 June 2023: Namibia technical update setting out initial conclusions from basin modelling work prior to and after the accounts date.
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Source: Tower Resources
