LONDON (Alliance News) - Tower Resources PLC on Tuesday said it has agreed a USD750,000 bridging loan with a single lender as it works to secure funding for its Thali offshore oil project in Cameroon.
Shares in Tower Resources were down 8.2% at 0.67 pence in early afternoon trade.
The bridging loan terms include the issue of 90 million attached five-year warrants and will provide working capital while Tower Resources works to obtain funding to drill the NJOM3 well at Thali in late May.
Tower Resources is in the last stages of well planning for NJOM3, which it intends to drill to a depth of 1,100 metres to intersect a minimum of three reservoir zones. Once NJOM3 is drilled, it will be suspended with the intention of completing it at one of four initial production wells on the Njonji structure at Thali.
A combination of bank financing and equity from itself or its partners will be used to fund the first development stage at Njonji. At present, Tower Resources is in talks with an undisclosed "prominent African bank" regarding a USD15 million loan facility that could be extended to USD50 million.
"The company is still hopeful that such a facility may be in place by mid-May. With or without such a facility, the company has also been holding discussions with several possible partners for the Thali license, which the company also hopes may be concluded in that time frame. Any one of these options, or a combination of them, could provide the additional funds required to complete the current well," said Tower Resources.
Tower Resources (TRP)