Abundance of news due π10 Oct 2025 13:14
Southmead
Ignore the noise so much news to land near term π
'Tower has announced two transformational farm-out agreements with Prime
International for the Thali (Cameroon) and the PEL96 (Namibia) offshore licences.
We update our financial forecasts and NAV for the proposed farm-out agreements and
reiterate our SPECULATIVE BUY rating with an updated 0.16p/share target price.
Tower agrees farm-out of Cameroon and Namibia licences to Prime
Tower announced that it has executed two farm-out agreements with Prime Global
Energies for minority, non-operated interests in the offshore Cameroon Thali licence
and the offshore Namibia PEL96 licence. The agreements provide $15m funding to drill
the NJOM-3 appraisal well, alongside ~$4.4m in cash payments to Tower and Pegasus
at execution and completion that will ultimately contribute significantly to the
Companyβs current working capital position. Completion of both farm-out agreements
is expected by end-1Q25 subject to government, partner and regulatory consents.
Cameroon farm-out agreement provides funding to drill appraisal well
Tower will farm-down a 42.5% non-operated interest in the Thali licence (100% WI) to
Prime in return for a $15m gross contribution to the Thali work programme costs.
Prime will also make two ~Β£1.5m payments to Pegasus at execution and completion
of the agreement as consideration for funding previously provided. Pegasus (a trust of
which the CEO Jeremy Asher is a lifetime beneficiary) will be using 50% of the cash
payments to subscribe for additional new shares in Tower, half of which will be locked
in for a year, which will increase the CEOβs direct shareholding to 25.33%.
Prime is an attractive and credible counterparty with a strong balance sheet
Prime Global Energies is a wholly owned subsidiary of Prime International Oil & Gas
(private), which has a long legacy spanning over 3 decades of successful exploration &
production activities in Pakistan. Prime operates multiple producing fields including
the Bhit, Badhra and Kadanwari gas fields, as well as non-operated interests in several
fields and gas processing facilities (link). Prime recently filed an annual report for the
year ended 30 June 2024 at the UKβs Companies House reporting $33m in revenues,
$24.8m profit and $43.2m of cash on its balance sheet at the end of the period.'
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