Tower Resources PLC (AIM:TRP) has been tipped to unlock substantial upside later this year as its pivotal well in Cameroon nears.
It comes after Tower earlier today released its financial results statement for 2024, a period which the small-cap company described as “very productive”.
City stockbroker SP Angel, which rates Tower as a ‘speculative Buy’, pitches a target price of 0.16p which implies several multiples of upside to the current price of 0.022p
At current levels, Tower is valued at just under £6 million which is dwarfed by the scale of opportunity as the NJOM-3 appraisal well promises to open a significant field development.
“Tower remains in its strong operational position for several years, subject to completing the two transformational farm-out agreements announced in January with Prime for non-operated interests in the Thali and the PEL96 offshore licences,” SP Angel analyst David Mirzai said in a statement.
“We assume that with Prime’s funding in place, Tower should be able to drill the NJOM-3 appraisal well in 4Q25 at Njonji, which is expected to confirm the commerciality of the oil discovery and de-risk a future fast-track development.”
Tower’s update
The company this morning told investors that its progress in 2024 has set up successes that are now driving the business in 2025.
Most notably, the firm’s ‘transformational’ farm-out deal with Prime Global Energies for the Thali project offshore Cameroon and its exploration area offshore Namibia.
The farm-out, a deal for 42.5% of Thali, delivers to Tower $15 million of cash to fund the drilling of the NJOM-3 well later this year. It was inked in January, and the company is anticipating the pivotal well will be drilled in the fourth quarter (subject to government approvals).
“2024 saw a great deal of work carried out on our company's licenses, which is already bearing fruit in 2025,” chief executive Jeremy Asher said.
Asher added: “We hope that the rest of 2025 will be even better, and in particular we hope to see the NJOM-3 well spudded before the current year-end, rig availability permitting.”
Securing a rig
The Tower boss, meanwhile, noted that efforts are underway to secure and confirm a rig for the project (after prior plans to use Borr’s Norve rig were stifled by a delayed drill schedule).
“The easing of the market for jack-up rigs, in particular, has also been helpful for us, and mitigates any regret we might otherwise have felt about being unable to proceed with the Norve as originally planned in 2024,” Asher said.
“Day rates for jack-up rigs in the region are now substantially lower than they were in early 2024 when we contracted for the Norve. In addition, we have been helped by the fact that a couple of our neighbours also require rigs for drilling campaigns to begin around the end of 2025.
“If we can use the same rig and some of the same services, we should be able to reduce the mobilisation and demobilisation costs associated with the well.”
Asher noted that details about the ongoing rig negotiations remain confidential, but he was “now very confident of their successful conclusion.”
In Namibia, he meanwhile called for patience as the government is “extremely busy” following a recent election, and as officials are also dealing with a significant ramp-up of activity related to the large Orange basin discoveries.
In terms of Tower’s financials, the pre-revenue explorer reported a full-year loss of $983,620 and said it ended 2024 with just under $285,000 of cash.
Subsequently, in 2025, Tower received cash injections related to the farm-out.