Tower Resources has signed farm-out agreements with Prime Global Energies for non-operated interests in its Thali license in Cameroon and PEL96 in Namibia. The agreements secure a $15 million investment towards the Thali work program and establish further cash inflows totaling $4.4 million, expected to finalize in early 2025, contingent upon regulatory approvals.
Tower Resources, a United Kingdom-based oil and gas enterprise, has formalized two farm-out agreements with Prime Global Energies. These agreements pertain to non-operated minority interests in Tower’s Thali license, located offshore Cameroon, and in PEL96 offshore Namibia. Under the arrangements, Tower will transfer a 42.5% stake in the Thali license while receiving a cash investment of $15 million to support its work program, specifically the anticipated NJOM-3 well set to be drilled by 2025. The drilling schedule, however, hinges on the approval timeline for the farm-out transaction as well as the extension request for the First Exploration Period, which currently ends on February 4, 2025.
Moreover, Prime Global Energies will acquire a 25% non-operated interest in PEL96 offshore Namibia. This deal includes an immediate cash payment of $937,500, alongside an additional $3.4 million payable upon the completion of the agreements, culminating in a total of $4.4 million for Tower. Both transactions are projected to finalize by the first quarter of 2025, pending necessary regulatory and partner approvals.
Jeremy Asher, Tower Resources’ Chairman and Chief Executive Officer, emphasized the significance of these developments, stating that the funding from Prime will be instrumental in facilitating the drilling of the NJOM-3 well, representing a crucial advancement for the company. He noted the importance of retaining a larger participating interest in the Thali license alongside the new cash inflows, which would ultimately bolster Tower’s operational capabilities.
The negotiations also necessitated a degree of flexibility, resulting in amendments to the existing Pegasus Facility Agreement, moderating any previously arranged production-based payments to accomplish a more favorable agreement for Tower’s interests.
Tower Resources has been actively seeking partnerships to leverage its offshore licenses in a challenging market environment. The Thali license in Cameroon and PEL96 in Namibia are considered areas of high prospectivity, and the recent agreements with Prime Global Energies represent a strategic move to boost liquidity and operational bandwidth. By entering into these farm-out agreements, Tower can engage in further exploration and development while mitigating financial risk, providing a pathway to fulfilling its commitments and expanding its resource base, thus enhancing shareholder value.
In summary, Tower Resources’ recent farm-out agreements with Prime Global Energies signify a strategic enhancement of both its Thali and PEL96 licenses. The financial assistance and operational collaboration will not only facilitate the upcoming well drilling but will also augment Tower’s financial stability moving forward. As regulatory consent is anticipated by early 2025, these arrangements are poised to propel Tower’s growth within the competitive oil and gas sector, affirming the company’s commitment to maximizing stakeholder value.
Original Source: www.oedigital.com
