Tower Resources has finalized two farm-out agreements with Prime Global Energies for minority interests in its Thali and PEL96 licenses. The Thali license in Cameroon entails a $15 million investment for a 42.5% interest, while the Namibia deal includes a 25% minority stake. These agreements are expected to enhance Tower’s financial resources and support upcoming drilling initiatives by early 2025, subject to regulatory consents.
Tower Resources, a United Kingdom-based oil and gas enterprise, has successfully entered into two farm-out agreements with Prime Global Energies, granting non-operated minority interests in the Thali license off the coast of Cameroon and the PEL96 license in offshore Namibia. Through its subsidiary, Tower Resources Cameroon, the company will farm-out a 42.5% non-operated share in the Thali license for a total of $15 million, which will contribute to the work program, including the anticipated drilling of the NJOM-3 well in 2025.
The timeline for the NJOM-3 well’s drilling is contingent upon government approvals regarding the farm-out agreement and an extension of the First Exploration Period, currently set to expire on February 4, 2025. Furthermore, Tower Resources (Namibia) will see Prime acquiring a 25% non-operated interest in the PEL96 license, entailing immediate cash payments amounting to $937,500 and an additional $3.4 million upon the agreements’ completion, culminating in a cash total of $4.4 million.
The closure of both farm-out agreements is anticipated to occur by the end of the first quarter of 2025, subject to necessary governmental and regulatory consents. Jeremy Asher, Chairman and CEO of Tower Resources, articulated that the funding from these agreements is vital for progressing the company’s initiatives and ensuring material advancement across its asset portfolio, thereby enhancing stakeholder value.
In addition to facilitating drilling operations, these agreements will bolster the company’s financial position, allowing greater confidence in advancing all work programs. The adjustments made in the negotiations have resulted in a modification of the Pegasus Facility Agreement, allowing for the retention of a more significant interest in the license by Tower as well as cash payments.
The oil and gas industry, characterized by significant capital requirements and strategic partnerships, often involves companies entering into farm-out agreements to share risks and stimulate development efforts. Tower Resources, focused on maximizing the value of its licenses, has strategically collaborated with Prime Global Energies to leverage their expertise and resources, particularly in the challenging offshore environments of Cameroon and Namibia. The agreements underscored the importance of early-stage funding and government collaboration for successful exploration projects.
In conclusion, Tower Resources’ agreements with Prime Global Energies signify a progressive step towards enhancing its operational capabilities and financial stability. The anticipated drilling of the NJOM-3 well, coupled with the significant cash inflow from the farm-out deals, lays a solid foundation for future exploration endeavors. This collaboration not only aligns with Tower’s strategic objectives but also reflects the growing potential of the oil and gas sector in both Cameroon and Namibia.
Original Source: www.oedigital.com
