Tower Resources’ signing of a rig contract for the NJOM-3 well would be the catalyst for a farm-in partner to come on board and complete the required financing for the well, house broker SP Angel suggest in an initiation note.
NJOM-3 is offshore Cameroon and Tower believes there is now enough flexibility and availability in the jack-up market to contract a rig to drill the key appraisal well, which if successful, potentially unlocks a commercial development.
SP Angel has a 12-month target price of 0.12p/sh based solely on the Core NAV to be de-risked by a rig contract, providing over 300% in potential upside to investors.
If there is a successful farm-out process and positive results from the NJOM-3 appraisal well in mid-2024, "investors could then look beyond the target price towards a higher risked valuation of the wider portfolio.”
Shares currently are 0.03p with a ‘speculative buy’ rating from SP Angel.