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(Sharecast News) - Africa-focussed oil and gas company Tower Resources announced a contract with Borr Drilling on Monday to secure the Norve jack-up rig for drilling operations on the Thali licence in Cameroon.
The AIM-traded firm said the NJOM-3 well, the agreement's target, was slated for drilling in 2024.
It said the Norve jack-up rig, a high-specification drilling unit in Borr's fleet, was currently under contract for other well deliveries, with operational timing uncertain.
Tower anticipated the rig's availability in Cameroon between April and August next year.
As a result, the NJOM-3 well was expected to be spudded in the second or third quarters of 2024, with a more precise date range to be determined closer to the time.
The contract was contingent on conditions including the final documentation of Tower's Thali licence extension and prepayment for part of the expected rig hire.
Although specific contract terms were confidential, the board said the agreed day rate aligned with Tower's latest cost projections.
The Norve rig, constructed in 2011 at the PPL shipyard in Singapore, could operate in water depths of up to 400 feet.
In addition to the rig contract, Tower Resources revealed plans to raise £0.6m through a subscription offering.
The funding would involve the issue of three billion ordinary shares for 0.02p each, representing a 13% discount compared to the closing bid price on 15 December.
Chairman and CEO Jeremy Asher intended to subscribe for £80,000 worth of new shares as part of the initiative.
Additionally, brokers would be offered a warrant covering 65 million new shares, valid for three years with a strike price of 0.04p apiece.
The board said the proposed subscription aimed to support working capital needs and work programme commitments across all three of its licences in the coming months as the company finalised its extension in Cameroon and ongoing farm-out discussions.
"Signing the rig contract is a significant step forward in the development of our Cameroon assets and moves us toward spudding the NJOM-3 well in 2024," said chairman and chief executive officer Jeremy Asher.
"The Norve Rig was chosen both for its high specification and its anticipated window of availability.
"Our next steps will be to finalise the documentation of the Thali licence extension with the Ministry of Mines, Industry and Technological Development (MINMIDT), and to move our farm-out discussions with multiple parties towards a conclusion, we hope during the first quarter of 2024."
Asher said that, as the company had explained in previous announcements, it planned to fund the well primarily with asset-level financing.
"While we finalise the farm-out discussions, we have chosen to raise a small amount of capital of which I am investing £80,000.
"We envisage that the majority of the remaining well cost will come from asset-level financing.
"I have chosen to participate in this fundraising myself, as I have in several of our previous recent fundraisings, reflecting my personal commitment to this project and my confidence in its success."
At 1302 GMT, shares in Tower Resources were down 10.42% at 0.02p.
Reporting by Josh White for Sharecast.com.