(Alliance News) - Tower Resources PLC on Wednesday said it has signed a letter of intent to use the COSL Seeker rig to drill the NJOM-3 well at Thali.
Shares in Tower Resources were up 5.5% at 0.76 pence in afternoon trade in London.
Data from the NJOM1 and NJOM2 wells at the Thali block, located in Camerooon, had suggested that more site preparation would be necessary before the rig for NJMO-3 can be moved to the site. A vessel scheduled to conduct preparations is en route and is expected to finish work in September.
Tower Resources had agreed to defer its drill contract with Vantage for the Topaz Driller because Tower still has a charter to another oil company that has not completed. However, Topaz's sister rig, COSL Seeker, is now available in Cameroon.
"Given the difficulty in matching up the schedule of the Topaz Driller with availability of the site survey data, the company yesterday signed a letter of intent to use the COSL Seeker rig to drill NJOM-3 instead of the Topaz Driller, and has released the Topaz Driller," said Tower Resources.
The day rate and terms for the COSL agreement are similar to that of the previous Vantage agreement and the deal is expected to produce savings in terms of the cost of rig mobilisation and demobilisation despite extra "costs for mobilisation of test equipment to the COSL Seeker".
Tower Resources does not expect there to be any changes to the well schedule or difficulty proceeding with the well even though the first exploration period of its production sharing contract expires on September 14 because the well is still "an operation in progress".
In terms of financing, Tower Resources is in farm-out talks "with multiple parties" who are now conducting due diligence. At least one of these discussions is hoped to conclude "in the near future", keeping in mind the operational schedule and the fact that Tower's bridging loan agreement is due for repayment Friday on Saturday this week, subject to a grace period ended September 30.
Tower Resources (TRP)