Acquisition

11 Aug 2005 07:00

Tower Resources PLC11 August 2005 Tower Resources plc ("Tower" or the "Company") Acquiring Oil and Gas Exploration Interests in Namibia and Uganda 1. Overview Tower is pleased to announce that it is to acquire oil and gas explorationinterests in Namibia and Uganda. The Company will acquire the interests throughthe purchase of Neptune Petroleum Limited ("Neptune") in a transaction that willconstitute a reverse takeover within the meaning of the AIM Rules. The total consideration for the acquisition of Neptune will be £4,000,000 to besatisfied by the issue of 200,000,000 fully paid ordinary shares at an agreedvalue of 2 pence per share. The terms of the agreement are summarised inparagraph 4 below. Tower Resources director, Russell Langusch, said "This is an excellentopportunity for the Company to acquire 100% of two frontier oil and gas plays.This is particularly so in an environment of high oil prices, robust explorationactivity and significant competition for quality African exploration ground.These two acquisitions enable the Company to position itself as an Africanfocussed off-shore and on-shore oil and gas explorer." 2. Namibia Overview Neptune's wholly owned subsidiary, Neptune Petroleum (Namibia) Limited, hasapplied for a petroleum exploration licence relating to Blocks 1910A, 1911 and2011A in the Republic of Namibia and is negotiating a Petroleum Agreement withThe Government of the Republic of Namibia. The blocks cover an area of about 19,000 square kilometres offshore Namibia, inwater depths ranging from 200 metres to more than 3000 metres. It is believedthat the basin or basins covered were formed in response to thermal subsidencefollowing the rifting preceding the separation of Africa from South America. Very few wells have been drilled in the area, but from the data available twooil prone source rock horizons have been identified, one in the early Aptian andanother in the Cenomanian - Turonian. Other source rocks may be present in thesyn-rift Lacustrine shales of the Hauterivan and possibly in shales in thepre-rift Karoo section. Good reservoirs have been encountered in the Barremianto Cenomanian and Turonian to Maastrichtian successions. Reconnaissance grids of modern seismic data are available over all the blocks. Few wells have been drilled to date but, the presence of oil prone source rocksand good reservoirs and the totally unexplored nature of the deeper watersuggests this is an attractive frontier play. Work Program and Commitments The Exploration Licence has a 2 year first exploration period followed by two 2year successive renewals. The minimum expenditure commitment in the first 2year period is US$ 1.15 million. 3. Uganda Overview Neptune's wholly owned subsidiary, Neptune Petroleum (Uganda) Limited, hasapplied for a petroleum exploration licence relating to Contract Area 5 in theRepublic of Uganda and is negotiating a Production Sharing Agreement with TheGovernment of the Republic of Uganda. The area is onshore covering the northern part of the East African Rift Valley.The main objectives are the Tertiary rift sediments which have been found to beoil and gas bearing in the acreage to the south. Oil seeps have been observed all along the edge of the rift but very few modernwells have been drilled. The area is fairly flat savannah which should makeseismic acquisition relatively easy. The fiscal terms in Uganda are attractiveand development scenarios will depend on the size of accumulation discovered.The initial program will consist of a study of existing gravity and magneticdata and regional geological studies. The next stage would be to acquire modernseismic data in order to determine the size and number of potentiallyhydrocarbon-bearing structures. The final stage would be the drilling of wellson the most attractive feature. Work Programme and Commitments The Exploration Licence has a 2 year Initial Exploration Period followed by two2 year successive renewals. The minimum expenditure in the first 2 year periodis US$ 0.7 million. 4. Terms of the Agreement The Company has entered into a conditional sale and purchase agreement withPeter Blakey, Peter Taylor and Bayview Investments LLC whereby it agrees topurchase Neptune Petroleum Limited in consideration of the issue of 200,000,000fully paid ordinary shares at an agreed value of 2 pence per share. The agreement is conditional on, amongst other things, Tower obtainingshareholder approval of the transaction; the grant of the exploration licencesin each of Namibia and Uganda and the receipt of confirmation from The Panel onTakeovers and Mergers that the City Code on Takeovers and Mergers (the "Code")does not apply to the Company or, if required, the completion of a "whitewash"procedure under Rule 9 of the Code. Upon completion of the agreement, the vendors will be entitled to sharescomprising 61.5% of the total issued capital of the Company. 5. Reverse Takeover The acquisition will be a reverse takeover within the meaning of the AIM rulesand, accordingly, the Company has requested trading in its shares on AIM to besuspended pending publication of an AIM admission document. ***ENDS*** Contacts: Ross Warner +44 77 6048 7769Russell Langusch +44 207 484 5623Hugh Warner +618 9420 9303 This information is provided by RNS The company news service from the London Stock Exchange