Proactive Investors - Run By Investors For Investors

Tower Resources to raise £1.7mln to support upcoming Cameroon drill programme

The placing funds will cover long lead items for an upcoming drilling programme at the Njonji area of the Thali project
oil and gas operations
Further funding will be needed, and, Tower is looking to debt financing

Tower Resources PLC (LON:TWR) has launched a placing to raise £1.7mln through a share placing and subscription to support the funding of a drill programme at the Njonji area of the Thali project, in Cameroon.

It intends to sell some 170mln new shares priced at 1p.

The injection of funds is earmarked to pay for long-lead items required for the envisaged drill programme which aims to unlock the Njoni asset.

READ: Tower Resources hires rig contractor for 2019 well programme in Cameroon

In an October a third-party assessment was estimated to have 18mln barrels of contingent resources and was valued at US$118mln – compared to Tower’s market capitalisation of around £4.3mln.

“The company has an asset whose potential value greatly exceeds its current market capitalisation, but the asset does require capital to develop,” Tower said in Thursday’s statement.

After the placing, Tower will still need to secure funds to pay for the majority of the drill programme.

Today it told investors that it had received interest from potential farm-in partners which may have funded the project and it has also had talks with potential lenders over a debt-based project financing.

“The company's opinion is that a borrowing facility encompassing both pre-production and production financing, including the Thali NJOM-3 well scheduled for Q2 2019, is the best way forward for shareholders,” Tower added.

“… the company believes that it is possible to conclude such a facility before the mobilisation of the Vantage Topaz Driller rig which the company has contracted to drill this well.

“While the company cannot rule out the possibility of needing additional equity financing for this forthcoming well, the company does not wish to raise more capital than needed while a good likelihood exists that such a borrowing facility can be completed, and the company is hopeful that in that case no further equity fundraising may be required prior to the NJOM-3 well.”

View full TRP profile View Profile

Tower Resources PLC Timeline

Related Articles

oil and gas operations
December 04 2018
Farm-out deals and new opportunities are anticipated over the coming months
Q&A, question and answer graphic
January 17 2019
The company is focused on the prolific oil & gas producing Anadarko Basin in the US state of Oklahoma.
The Rex drill site at Wizard Lake project
March 18 2019
Proved and probable reserves at the Albertan province project are 225,000 barrels of oil.

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use