Tower Resources plc (the “Company” or “Tower” (TRP.L, TRP LN)), the AIM-listed Africa-focussed oil and gas exploration company announces the following update with regards to its interests in the SW Orange Basin Technical Co-operation Permit (“TCP”) and the Algoa-Gamtoos Exploration Right (“Algoa-Gamtoos ER”) offshore South Africa.
Tower’s wholly-owned subsidiary, Rift Petroleum Limited (“Rift”, 50% interest) and its partner, New African Global Energy SA (Pty) Ltd (“New Age”, 50% interest, operator), have agreed not to proceed with an application to convert the TCP for this ultra deep-water frontier area into an exploration right. Accordingly, New Age will reimburse Rift the sum of US$500,000, which was paid by Rift as part of its original farm-in agreement in 2013, and which has now been terminated.
Tower’s exit from this high cost ultra deep-water frontier basin is consistent with its move towards a more balanced portfolio of proven and emerging basins. This decision will enable the company to focus its efforts in South Africa on the Algoa-Gamtoos ER, which offers greater near-term potential.
As previously announced in September 2015, approval was received from the Petroleum Agency of South Africa to enter the First Renewal Period of the Algoa-Gamtoos ER and accordingly the 2016 work programme and budget has been approved between the joint-venture partners, Rift (50% interest) and New Age (50%, operator). The work programme will include further geophysical work and the interpretation of previously acquired 3D seismic data with a view to seeking a partner for the next stage of operational activity.
The Algoa-Gamtoos ER includes three basins and multiple plays. The 3D seismic which was acquired in 2014 across the Algoa canyon has been supplemented by the reprocessing of an older 3D survey and the merged volume will now be interpreted with a view to defining drillable prospects for 2017/18. The licence also includes many leads defined on 2D seismic in the Gamtoos Basin, and the Joint Venture will be evaluating the potential to better define these with the acquisition of additional 2D or 3D seismic in 2017.
While Tower’s current work programme is focused on the shallow areas the licence also includes unexplored deep-water acreage within the Outeniqua Basin. In 2014 Total attempted to drill the Brulpadda-1 exploration well in Block-11B/12B adjacent to the Algoa-Gamtoos licence. However, the well was abandoned owing to mechanical difficulties with equipment on the rig and Total has indicated that it may return to drill in 2016/17. In the event of success at Brulpadda, the prospectivity of the deep-water part of Algoa-Gamtoos block would be significantly enhanced.
Graeme Thomson, Tower’s CEO commented “We are concentrating on the area in South Africa with the greatest near-term commercial potential, have enhanced our funding position and have also reduced our contingent commitments. The proceeds from this withdrawal mean that our South African work programme for 2016 is now self-funding.”
Graeme Thomson (CEO)
Andrew Matharu (VP – Corporate Affairs)
+44 20 7253 6639
Peel Hunt LLP (Nominated Adviser and Broker)
Richard Crichton/Ross Allister
+44 20 7418 8900
Chris McMahon/ Alex Aleksandrov
+44 20 7016 9572