Namibia

Tower Resources (Namibia) Limited, a wholly owned-subsidiary of Tower Resources plc, signed a Petroleum Agreement covering an 80% operated interest in Blocks 1910A, 1911 and 1912B (PEL 96) in November 2018 with an Initial Exploration Period of four years which was subsequently extended to 31 October 2024.

The Initial Exploration Period was subsequently extended to 31 October 2024 by agreement with the Namibian Ministry of Mines and Energy (“MME”) who also invited Tower to apply for entry into the First Renewal Period for a period of 2 to 3 years which was agreed on 1 November 2024.

The blocks cover 23,297 km² of the northern Walvis Basin and Dolphin Graben (offshore Namibia), an under-explored region in which recent drilling results have proven the presence of a working oil-prone petroleum system, along with good quality turbidite and carbonate reservoirs. Recent licensing activity in the area has included the farm-in of Chevron to the PEL 82 license to the south.

Albian carbonate and Palaeocene / Upper Cretaceous turbidite reservoirs (proven in offset wells, e.g. 1911/15-1) have been previously identified in structural traps across the blocks. These include giant (>1000 sqkm) 4-way dip closured structures (in the west) and structures within the Dolphin Graben (an area which well results indicate is likely to contain mature source rocks). More recent work has resulted in the identification of a number of potential stratigraphic traps, associated with Cretaceous and Palaeogene basin floor turbidite and channel systems.

Regional Setting & Petroleum Geology

The Walvis Basin and Dolphin Graben are under-explored, with only nine exploration wells drilled to date in >90,000sqkm of basin. Of these wells, five were drilled in the mid-1990s in the Central (Dolphin Graben) and Eastern (continental slope) parts of the basin. Although historic drilling has failed to discover commercial quantities of hydrocarbons to date, wells have proved the presence of an oil-prone petroleum system, along with good quality turbidite and carbonate reservoirs.

Two offset wells (1911/15-1 and 1911/10-1) located within the block were drilled by Norsk Hydro in the mid-1990s. These wells encountered thick Palaeocene, Maastrichtian and Campanian turbidite sands.The 1911/15-1 well recovered oil from Albian carbonates and Palaeocene sandstones. Well failure is likely due to breaching of traps due to Tertiary-aged structural reconfiguration. .

More recently, three wells (targeting Cretaceous turbidite plays) have been drilled in the Walvis Basin, all of which strongly indicated the presence of an oil-prone petroleum system. The Wingat-1 and Murombe-1 (drilled by HRT in 2013) encountered two “well-developed source rocks, which are rich in organic carbon and are both within the oil-generating window”. 38º- 42º API oil was recovered to surface in Wingat-1. The Cormorant-1 well (drilled by Tullow in 2018) reportedly encountered turbidite sandstones reservoirs and wet gas signatures (‘indicative of oil’).

In addition to the Cretaceous turbidite plays being explored for by Tullow and others to the south, the 1911/15-1 well (located in the blocks) demonstrates the presence of good quality Albian carbonates (35m net thickness, 15-20% porosity). Biomarkers from migrated oils recovered from the carbonates indicate the presence of a lacustrine source system in the Dolphin Graben area, which may be analogous to the prolific Lower Cretaceous source systems offshore Brazil and offshore Angola.

The well results, in addition to numerous surface oil seeps identified from satellite data over PEL 96 together with drop core data collected in the northern part of the Walvis Basin, provide clear evidence that potentially significant oil volumes have been generated and migrated in the basin.

Prospectivity

Tower has identified multiple prospects and leads on the existing 2D seismic dataset, the majority of which comprise of multiple stacked reservoir targets, which could be penetrated with a single well.

Stratigraphic Plays

Recent extensive re-interpretation of legacy seismic data has resulted in the identification of a number of basin floor fan leads. Several leads are of possible Albian and Campanian age and display an amplitude response. Stratigraphic pinch-outs of these leads can be defined both landward and also in a seaward direction against the outer high. Further work on stratigraphic leadswill be conducted during the remainder of the Initial work programme that will include extensive seismic reprocessing that will allow AVO analysis.

Outer High Structural Closures

Two giant four-way dip closed structural traps, with billion-barrel potential, have been identified and mapped on 2D seismic data. The anticlinal structures are situated on a regional structural high on the landward crest of the Walvis Ridge, surrounded by potential source kitchens in which mature oil sources have been proven by offset wells. The largest of the structures (the Gamma Prospect), has more than 1100km² of 4-way dip closure, with stacked reservoir targets including Palaeogene turbidites, Albian carbonates, as well as upside potential in deeper undrilled syn-rift Barremian clastics.

Dolphin Graben Structural Closures

Significant potential has also been identified within multiple structural closures (50 km² to 125 km²) identified and mapped across the Dolphin Graben, all of which are located directly adjacent to source kitchens. More than eight 3-way fault dependent and 4-way dip closed structural traps have been identified so far, all of which have multiple stacked targets, which include Palaeogene and Cretaceous turbidites as well as Albian carbonates and deeper syn-rift clastics.

Prospective Resources

An initial (unaudited) resource potential estimate for six primary anticline prospects and leads, developed prior to the evaluation of stratigraphic traps currently underway, is summarised on an unrisked basis in the table below.

*All prospective resources are arithmetically summed gross, unrisked, Pmean, recoverable oil

Licence History and Work Programme

An exploration licence (PEL0010) over much of this area was originally awarded to Tower’s subsidiary Neptune Petroleum (Namibia) Limited with a 100% working interest in 2005. Following the reprocessing of c. 3000km of legacy 2D seismic and acquisition of c. 735km new 2D seismic and c. 1585 km² 3D seismic data with new partner Arcadia Petroleum, several supergiant four-way closures with multiple stacked reservoir targets were identified.

In 2012 Repsol farmed-in as operator, to drill the first exploration well in the license, on the block 2011 which is the part of the original license PEL0010 that is not covered by the new Petroleum Agreement. The Welwitschia #1 well, drilled in 2014, penetrated the Palaeocene, Maastrichtian and Upper Campanian sections, with logging evaluations indicating that reservoirs were less well-developed than prognosed. The well did not penetrate the deeper Albian Carbonate reservoir target. In 2015, the partners in PEL0010 agreed to relinquish the license, with all license conditions having been met.

The new Petroleum Agreement is structured to comprise an Initial Exploration Period of four years (which has been extended to 31 October 2024) and Tower has been invited by the MME to enter the First Renewal Period for a period of 2-3 years on completion of the Initial Exploration Period.

The majority of the work commitment for the First Exploration Period has been completed including the interpretation of 20,000 line kilometres of 2D seismic data and extensive basin modelling work leading to the identification of multiple stratigraphic traps in five main areas of the license, favourably located adjacent to those deeper source rocks of the Dolphin Graben.

The remaining work commitment for the Initial Exploration Period, which is already substantially completed, comprises of the oil seep satellite analysis, play fairway analysis, development of an updated prospect and lead inventory and the high-grading of acreage. This information will be used to determine the location of a 1,000 km² 3D seismic acquisition which has been deferred from the Initial Exploration Period to the First Renewal Period; which also include the drilling of a commitment exploration well. Both the First and Second Renewal Periods include the right to a one year extension. The petroleum agreement does not provide for a Third Renewal Period.