Tower Resources plc (the “Company” or “Tower” (TRP.L, TRP LN)), the AIM-listed Africa-focussed oil and gas exploration company, is delighted to announce the signing of the shallow water Thali (formerly known as “Dissoni”) Production Sharing Contract (“PSC”), offshore Cameroon.

The PSC signing ceremony took place on 15 September 2015 at the offices of Société Nationale des Hydrocarbures (“SNH”) in Yaoundé, Cameroon, in the presence of a delegation which included the Minister of Mines, Industry and Technological Development, His Excellency Mr Emmanuel Bonde, and the Executive General Manager of SNH, Mr Adolphe Moudiki.

Tower’s signature of the Thali PSC represents a low cost entry into a mature region with low-risk exploration/appraisal targets and the potential for significant upside. Tower has a 100% interest in the Thali PSC, and the terms of the PSC include three exploration phases, including the minimum work commitment of the Initial Exploration Period, outlined below:

  • Initial Exploration Period (3 Years): Consisting of geological and geophysical studies, 100km2 of 3D seismic acquisition and a commitment well with a minimum financial commitment of US$13 million.
  • First Renewal Period (2 Years): Consisting of one exploration or appraisal well with a minimum financial commitment of US$15 million.
  • Second Renewal Period (2 Years): Consisting of one exploration or appraisal well with a minimum financial commitment of US$15 million.

Tower has the option of relinquishing the PSC on completion of each Period on condition that the minimum work commitment has been met.

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 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.

The Thali Block has the potential to hold up to four distinct play systems, including the established play in which three discovery wells, two gas (Rumpi-1, Njonji-2) and one oil (Njonji-1), have already been drilled on the Block. There are 7 million barrels of oil already discovered on the Block. These are currently viewed as sub-commercial discoveries, but once better seismic imaging has been achieved Tower sees potential to add incremental oil reserves to achieve commerciality. There is also significant potential to develop prospects at deeper levels, in both structural and stratigraphic traps, once better imaging has been achieved. The existence of infrastructure in adjacent blocks means that the development of a 20 million barrel oil field has the potential to be economically viable at current oil prices.

Tower’s initial priority will be the acquisition of 3D seismic in the first half of 2016. The seismic will be used to update the existing 24 year old data set to allow better resolution of shallow plays as well as imaging of deeper sections. Tower expects to be drilling in 2017/18.

The market downturn in the services sector presents an opportunity for the Company to leverage lower seismic and drilling costs and a partner will be sought in due course to share Tower’s financial commitment and provide additional technical input.

Graeme Thomson, CEO, commented: “We are delighted to be awarded the Thali PSC and look forward to working closely with SNH as we develop the prospectivity of this exciting acreage. Our entry into Cameroon marks a shift in our risk profile from frontier to proven basins and introduces an asset with existing discoveries into the Tower portfolio. The Thali Block provides Tower with lower risk exploration and appraisal potential in this shallow-water proven-producing region and provides a base from which the Company can expand its portfolio in Cameroon.”

Contacts
Tower Resources

Graeme Thomson (CEO)
Nigel Quinton (Head of Exploration)
Andrew Matharu (VP – Corporate Affairs)
+44 20 7253 6639

Peel Hunt LLP (Nominated Adviser and Joint Broker)

Richard Crichton/Ross Allister
+44 20 7418 8900

GMP Securities Europe LLP (Joint Broker)

Rob Collins/Emily Morris
+44 20 7647 2800

Vigo Communications

Chris McMahon/Peter Reilly
+44 20 7016 9572

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Notes

In accordance with the guidelines for the AIM market of the London Stock Exchange, Nigel Quinton, BA, MA, FGS, Head of Exploration for 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.