Tower Resources (“Tower”), the AIM listed oil and gas exploration company, has been advised that the Minister of Mines and Energy of the Republic of Namibia has approved the farmout by Tower’s wholly-owned subsidiary Neptune Petroleum (Namibia) Limited (“Neptune”) of an 85% interest in its Licence, covering offshore blocks 1910A, 1911 and 2011A, to Arcadia Petroleum Limited (Arcadia). The Minister has also approved the transfer of the Operatorship of the Licence to Arcadia.
Under the terms of the farmout, Arcadia has committed to fully fund a programme of activity in four parts which includes:
- cost associated with shooting the recently completed 2-Dimensional seismic programme and further costs arising from its interpretation;
- shooting and interpreting a 3-Dimensional seismic programme, presently contemplated in early 2008;
- an exploration commitment well;
- a second well which might be an appraisal well or a second exploration well.
Arcadia has the option to withdraw from its commitment at the end of each of these four stages of operation or to assign all or part of its interest to a third party agreeing to meet the funding commitment. In the case of withdrawal and failure to assign, the full 85% interest will revert to Neptune. Arcadia will also reimburse 85% of certain historic costs to Tower.
Arcadia Petroleum Limited is a substantial trader of oil and related products. They bring considerable financial strength to the Licence as well as access to very relevant expertise in exploration, development and shipment of oil and natural gas.
Peter Kingston, Tower’s Chairman has welcomed the introduction of such a strong partner. “Arcadia shares Tower’s belief that the Licence has the potential to contain giant gas fields. In particular, the discovery of large volumes of gas can be developed effectively given Arcadia’s financial strength and its access to appropriate technology. Activity now promises to progress quickly and the potential of the Licence is genuinely exciting.”
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