Tower Resources Regulatory News (TRP)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION.

This announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of Tower Resources PLC or other evaluation of any securities of Tower Resources PLC or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.

24 January 2019

Tower Resources plc

Proposed Placing and Subscription to raise approximately £1.7 million

Appointment of Joint Brokers

Proposed Award of Options, Share Incentive Plan Award Shares and Issue of Warrants

Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)), the AIM listed oil and gas company with its focus on Africa, announces today its intention to raise gross proceeds of approximately £1.7 million, through a placing and subscription of approximately 170 million new ordinary shares of 1 pence each (the "Placing Shares") at a placing price of 1.00 pence per Placing Share (the "Placing Price") with each two Placing Shares carrying a single attached warrant (the "Placing Warrant") to subscribe for one further ordinary share within three years of the date of Admission at a price of 1.25 pence per share (all together, the "Placing").

Admission of the Placing Shares to trading on AIM is expected to take place at 08:00 on or around 30 January 2019.

Chairman & CEO Statement

The Reserve Report dated 31 October 2018 from Oilfield International Limited ("OIL") established for the first time the extent of the contingent resources on the Njonji structure in our Thali license in Cameroon, as well as the additional prospective resources at Njonji and elsewhere on the license. With 18 million bbls of Pmean contingent resources at Njonji, valued by OIL with an EMV10 of US$118 million, without regard to the additional value of the prospective resources, the Company has an asset whose potential value greatly exceeds its current market capitalisation, but the asset does require capital to develop. The cash flow analysis developed by OIL for its 31 October report and valuation illustrates both the capital requirement and the scale of the opportunity:

Note: Contractor is Tower 100% until farm-out or SNH back-in

The total amount of cash required to fund the development of phase 1 could in fact be significantly lower or higher than these numbers depending on choices the Company might make regarding owning or chartering a mobile oil production unit ("MOPU") and the drilling of the four wells envisioned in phase 1 above, but much or all of the actual amount, whatever it is, should be financeable through borrowing secured against the project cash flow, and the cost recovery terms of the Company's Production Sharing Contract ("PSC") mean that those development costs should be recovered rapidly from production, as OIL's projections indicate.

The Company has received interest from third parties to farm in to the license and is also in discussion with potential lenders for both production and pre-production financing, as well as discussing a production off-take agreement. The Company's opinion is that a borrowing facility encompassing both pre-production and production financing, including the Thali NJOM-3 well scheduled for Q2 2019, is the best way forward for shareholders, and the Company believes that it is possible to conclude such a facility before the mobilisation of the Vantage Topaz Driller rig which the Company has contracted to drill this well. While the Company cannot rule out the possibility of needing additional equity financing for this forthcoming well, the Company does not wish to raise more capital than needed while a good likelihood exists that such a borrowing facility can be completed, and the Company is hopeful that in that case no further equity fundraising may be required prior to the NJOM-3 well.

Background to the Placing

The Company will use the net proceeds of the Placing principally to fund long-lead items pursuant to the drilling of the Thali NJOM-3 well, offshore Cameroon, scheduled for Q2 2019, for other costs related to the Thali work programme, and for general working capital while it seeks to complete borrowing facilities to fund its forward work programme at Njonji in particular.

Appointment of Joint Brokers

The Company also announces the appointment of Turner Pope Investments (TPI) Limited and Whitman Howard Limited as joint brokers with immediate effect.

Proposed Award of Options and Share Incentive Plan Award Shares

The Remuneration Committee of the Board also proposes to create options over 70 million Ordinary shares at a price of 1.25 pence per share to be granted primarily to the CEO, along with certain staff and retained consultants, and the Board intends to exercise its discretion to vest the 2017 Incentive Award of 15 million Ordinary shares as contemplated at the time of grant pursuant to the Share Incentive Plan Award announced on 9 November 2017, as the performance conditions for this Award have now been met and the restricted share scheme is being discontinued.

Issue of Warrants

The Company proposes to issue 19,999,999 warrants to subscribe to one ordinary share of the company within five years of issue at a price of 1.20 pence per share, being the most recent closing price of the Company's shares, in lieu of £70,000 of Directors fees in partial settlement of fees due in 2018 and for the period from 1 January 2019 to 30 June 2019, to conserve the Company's working capital in accordance with recent practice.

The Company has also agreed, on Admission, to grant warrants ("Broker warrants") over 7,212,000 new Ordinary Shares to its broker, TPI, on the same terms as the Placing Warrants as part of the consideration due to them for services rendered in connection with the Placing.

Note regarding forward-looking statements

This announcement contains certain forward-looking statements relating to the Company's future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as "targets" "estimates", "envisages", "believes", "expects", "aims", "intends", "plans", "will", "may", "anticipates", "would", "could" or similar expressions or the negative of those, variations or comparable expressions, including references to assumptions.

The forward-looking statements in this announcement are based on current expectations and are subject to risks and uncertainties which could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements relate only to the position as at the date of this announcement. Neither the Directors nor the Company undertake any obligation to update forward looking statements, other than as required by the AIM Rules for Companies or by the rules of any other applicable securities regulatory authority, whether as a result of the information, future events or otherwise. You are advised to read this announcement and the information incorporated by reference herein, in its entirety. The events described in the forward-looking statements made in this announcement may not occur.

Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.

Any person receiving this announcement is advised to exercise caution in relation to the Placing. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Contacts

Notes:

Tower Resources Cameroon S.A, a wholly-owned subsidiary of Tower Resources plc, holds a 100% interest in the shallow water Thali (formerly known as "Dissoni") Production Sharing Contract (PSC), in the Rio del Rey basin, offshore Cameroon. Tower was awarded the PSC on 15 September 2015 for an Initial Exploration Period of 3 years.

The Thali PSC covers an area of 119.2 km², with water depths ranging from 8 to 48 metres, and lies in the prolific Rio del Rey basin, in the eastern part of the Niger Delta. The Rio del Rey basin has, to date, produced over one billion barrels of oil and has estimated remaining reserves of 1.2 billion barrels of oil equivalent ("boe"), primarily within depths of less than 2,000 metres. The Rio del Rey is a sub-basin of the Niger Delta, an area in which over 34.5 billion barrels of oil has been discovered, with 2.5 billion boe attributed to the Cameroonian section.

An independent Reserve Report conducted by Oilfield International Limited (OIL) have highlighted the contingent and potential resources on the Thali licence and the associated Expected Monetary Value (EMV) as follows:

§ Gross mean contingent resources of 18 MMbbls of oil across the proven Njonji-1 and Njonji-2 fault blocks;

§ Gross mean prospective resources of 20 MMbbls of oil across the Njonji South and Njonji South-West fault blocks;

§ Gross mean prospective resources of 111 MMbbls of oil across four identified prospects located in the Dissoni South and Idenao areas in the northern part of the Thali licence;

§ Calculated EMV10s of US$118 million for the contingent resources, and US$82 million for the prospective resources, respectively.

In accordance with the guidelines for the AIM market of the London Stock Exchange, Dr Mark Enfield, BSc, PhD, FGS, Advisor to the Board of Tower Resources plc, who has over 30 years' experience in the oil & gas industry, is the qualified person that has reviewed and approved the technical content of this announcement.