Tower Resources Enters Farm-Out Agreements for Offshore Licenses…

Tower Resources has signed farm-out agreements with Prime Global Energies, granting minority, non-operated interests in its Thali license in Cameroon and PEL96 offshore Namibia. The agreements secure $15 million in funding for drilling the NJOM-3 well, along with additional cash payments totaling $4.4 million. Completion is expected by early 2025, pending necessary approvals.

U.K.-based oil and gas entity Tower Resources has entered into two strategic farm-out agreements with Prime Global Energies, providing Prime a minority, non-operated interest in Tower’s Thali license located offshore Cameroon and the PEL96 license offshore Namibia. The agreements stipulate that Tower will transfer a 42.5% non-operated interest in the Thali license to Prime in exchange for a $15 million monetary contribution towards the Thali work program, including the drilling of the NJOM-3 well scheduled for 2025.

At present, the drilling timetable for the NJOM-3 well is contingent upon governmental approval regarding the farm-out agreement and for extending the current First Exploration Period, set to expire on February 4, 2025. Consequently, the scheduling of the well will depend largely on the availability of suitable rig slots and the requisite lead times for mobilizing necessary equipment and personnel.

In a concurrent arrangement, Prime will acquire a 25% non-operated interest in license PEL96 off the coast of Namibia via Tower Resources (Namibia). Additionally, Tower will receive immediate cash payments totaling $937,500 and an expected $3.4 million upon the completion of the agreements, aggregating to $4.4 million in cash inflow.

The completion of these deals is anticipated by the conclusion of the first quarter of 2025, contingent upon receiving the necessary governmental, partner, and regulatory approvals. Tower Resources Chairman and CEO Jeremy Asher commented that the funding from these agreements will enable the company to fulfill its commitment to drilling the NJOM-3 well, marking a pivotal step for the organization. Asher also expressed satisfaction with the recognition of the potential of the PEL96 license, affirming ongoing efforts to explore its substantial prospects.

He further elaborated on the necessity for flexibility within negotiations, indicating alterations to the Pegasus Facility Agreement that would affect production-based payments associated with the Thali farm-out. Ultimately, the completion of these transactions is expected to enhance liquidity and bolster the company’s broader operational objectives, thus ensuring ongoing value creation for stakeholders.

Tower Resources is an oil and gas exploration company based in the U.K. specializing in offshore licenses in Africa. The company has been actively seeking partners for its exploration assets to enhance operational capabilities and funding for future drilling projects. The farm-out agreements with Prime Global Energies represent a significant step for Tower Resources, aimed at ensuring the advancement of its projects while mitigating financial risks associated with drilling and exploration activities.

In summary, Tower Resources has successfully negotiated two significant farm-out agreements with Prime Global Energies, enhancing its operational reach in offshore Cameroon and Namibia while securing crucial funding to support drilling endeavors. The agreements underscore the importance of collaboration in the oil and gas industry, positioning Tower to progress its objectives with increased confidence. The anticipated realization of cash inflow from these partnerships further incentivizes the ongoing exploration of valuable offshore assets, benefiting all stakeholders involved.

Original Source: www.oedigital.com