Tower Resources PLC (AIM:TRP), the oil and gas exploration company with interests in sub-Saharan Africa, principally in Namibia and Uganda, is pleased to provide an update to shareholders on its current operations in each country, managed by wholly-owned subsidiaries Neptune Petroleum (Namibia) Limited and Neptune Petroleum (Uganda) Limited.
In Licence 0010, offshore Namibia, where Neptune Petroleum (Namibia) Limited has a 15% carried interest, processing of the 3-D seismic has been completed and data quality is excellent. On first inspection, the results of the 2-D seismic interpretation are enhanced and the very large, simple four way dip closed Delta structure has been confirmed. There are also clear indications of “pock marks”, which are an accepted indication of light hydrocarbons, constrained below the regional seal and within the closure of the structure – these represent an indication of hydrocarbons, completely independent of the hydrocarbon indications interpreted from AVO analysis of the 2-D seismic. Detailed interpretation, which will include evaluation of direct hydrocarbon indicators and also reservoir facies characteristics, has begun and significant results are expected by the end of March 2011. Arcadia Petroleum Limited, which is the operator of Licence 0010 and is funding Tower for the cost of the first well, has accelerated its programme to put in place funding and to contract a deep water drilling rig with a view to drilling in the final quarter of 2011. This timing now has a high priority but is subject to timing of rig availability. The Competent Person’s Report will be updated with a view to publication before the middle of 2011.
In December 2010, following interpretation studies of the aero gravity gradiometry survey (GGI) and further detailed analyses of all well data, Tower announced an operational update which highlighted the following important conclusions:
- The probable existence of an active oil generation kitchen is confirmed, which may explain the widespread presence of near mature oil encountered as micro seeps close to surface and as trace amounts in the water samples picked in the two wells
- The GGI has also identified an apparently closed structural feature having an area greater than 100 square kilometres, in a location where basin modelling projects that good quality reservoir should be present
- The limited sections of existing seismic coverage over this structure show that the prospective reservoir interval maintains its thickness over the structure, in contrast with the setting of the recent wells, both of which were drilled where the reservoir interval was thinning on to the structurally high points of the prospects.
The final GGI interpretation report has been issued and these conclusions have been confirmed. The Tower Board believes that the apparent volume and depth of “kitchen” are sufficient to generate enough oil to fill a commercial-sized trap and that the new target area is sufficiently large and well defined to contain recoverable resource potential of more than 100 million bbls.
A seismic programme of 150-200 kms is now being planned with targeted timing of an April 2011 start and duration of about one month. All government consents have been received to proceed with the seismic programme and the process of appointing a seismic contractor is underway. A final phase of the farm out programme is continuing and new interest has been generated as a consequence of the updated basin interpretation. Uncertainty still remains concerning the timing of the Ugandan Government’s sanction of a future regional development programme and the Tower Board believes that there may therefore be a delay before a potential farm in party will commit to funding Tower’s outstanding Licence commitments. The Tower Board is therefore raising the additional equity capital required to undertake the seismic programme on schedule so that a well can still be drilled in September or October 2011. If the cost of seismic is subsequently met by a third party, the funds will be deployed on new projects.
The placing of 90 million new shares at a price of 4.75p per share to raise gross proceeds of £4,275,000 from private and some significant new institutional investors has been announced separately at the same time as this announcement.
Peter Kingston, Executive Chairman of Tower, commented: “I am delighted that a first well in Namibia, to test the huge potential of the Delta prospect, is now a target for this year. I am also pleased that the final commitment well in Uganda will test a good prospect which could yield material value to shareholders if successful.”
Tower Resources PLC
Peter Kingston, Chairman
Northland Capital Partners Limited (Nominated Adviser and Joint Broker)
Gavin Burnell / Edward Hutton
020 7492 4750
Katie Shelton/Charles Vaughan (Broking)
Westhouse Securities Limited (Joint Broker)
Tim Feather / Matthew Johnson
0207 601 6100
020 7933 8780
020 7933 8794
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