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(Alliance News) - Oil & gas firm Tower Resources PLC said Tuesday it has been granted an extension to its USD750,000 bridging loan facility to the end of August.
The facility is being used by Tower to cover working costs while the company looks to find funding arrangements for the drilling of the NJOM3 well on the Thali licence, offshore Cameroon.
The extension in turn will allow additional time for Tower to progress farm out discussions and arrange for refinancing of the facility.
In return, Tower Resources must issue 3.0 million of attached five-year warrants with a strike price of 1 pence per share. The value of these warrants is approximately 0.4 pence per warrant, with the aggregate value corresponding to around 2% of the value of the facility.
The warrants are intended to compensate the facility lenders for their additional risk and for the additional default interest the lenders will forego by granting the extension.
Pegasus Petroleum Ltd, a company owned by Chair & Chief Executive Jeremy Asher, will receive 1.5 million of the warrants issued, while Peel Hunt LLP will receive 800,100 warrants. Both Peel Hunt and Pegasus are lenders in the facility.
Shares in Tower Resources were down 8.6% at 0.800 pence on Tuesday in London.