BOOOM!!!10 Jan 2025 07:03
Tower Resources plc (AIM: TRP), the AIM-listed oil and gas company focused on Africa, is pleased to announce that it has executed two farm-out agreements and associated documentation with Prime Global Energies Limited ("Prime") for minority, non-operated interests in its Thali license, offshore Cameroon, and PEL96 offshore Namibia.
Through its wholly-owned subsidiary, Tower Resources Cameroon S.A. ("TRCSA"), the Company has agreed to farm-out a 42.5% non-operated interest in the Thali license to Prime in exchange for a US$15,000,000 cash contribution towards the Thali work programme and drilling of the NJOM-3 well in 2025, and further payments as set out below. In addition, via Tower Resources (Namibia) Limited, Prime has also agreed to farm-in to PEL96, offshore Namibia, for a 25% non-operated interest. As explained below, as part of these arrangements, Tower will also receive further payments including US$937,500 in cash immediately and a further US$3,437,500 cash on completion of the two farm-out agreements, for a total of US$4,375,000 in cash.
Completion of both farm-out agreements is expected to occur by the end of Q1 2025 subject to government, partner and regulatory consents.
Prime is a UK-incorporated company with more than three decades of upstream operational experience. In 2022, Prime's parent company, Prime International Oil and Gas Company Limited ("PIOGCL"), acquired the assets of ENI in Pakistan (which included the former interests of Lasmo in Pakistan) and is a substantial upstream company with significant technical resources and production from both operated and non-operated production in Pakistan.
Highlights
· Prime will acquire a 42.5% non-operated interest in the Thali license, in return for a US$15,000,000 contribution to the Thali work programme costs;
· Prime is also acquiring a 25% non-operated interest in PEL96, offshore Namibia, with Tower receiving US$2,500,000 cash on completion (of which US$1,875,000 will be held back pending completion of the Thali farmout as well as the PEL96 farmout);
· In recognition of existing production-based payment agreements in place with Pegasus Petroleum Limited ("Pegasus") on the Thali license, which Pegasus has agreed to modify in Prime and Tower's favour, Prime will commit to production-based payments of 10% of Prime's after-tax share of profit oil from Thali to Tower, which will, in turn, be passing the majority of those payments on to Pegasus and also retaining a portion itself, as previously disclosed; other aspects of the transaction include:
o A payment of US$1,875,000 will be made to Tower upon the farm-out agreement execution; 50% to be paid to Pegasus and 50% to be retained by Tower;
o A further payment of US$1,875,000 to Tower on completion of the Thali farm-out; 50% to be paid to Pegasus and 50% to be retained by Tower;
o The issue of 5,650,483,681 Ordinary shares in Tower to Pegasus in consideration of t
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