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Tower Resources to drill Welwitschia well in February

“Preparations for the Welwitschia-1 well are progressing at accelerating pace,” said chief executive Graeme Thomson.

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Tower Resources (LON:TRP) says the date has been set for the hotly anticipated Welwitschia deep water exploration well offshore Namibia, with Repsol due to start drilling in mid-February.

The rig has been secured, a location has been agreed, a site survey is complete and the longest lead items are now being manufactured, Tower revealed.

“Preparations for the Welwitschia-1 well are progressing at accelerating pace,” said chief executive Graeme Thomson.

Repsol are expected to receive the rig in December and it will be mobilised directly to the selected location in Namibia, where a well will be able to test two exploration targets.

It is anticipated that Welwitschia 1 will be drilled to a depth of 3,000 metres and Tower says gross well costs will be in the order of US$80mln – its share will be around US$24mln.

Tower, which currently has cash of US$2.8mln, is considering a number of ways to finance its participation in what it calls a ‘giant-potential’ well. These options include a possible farm-out, an asset swap deal or an equity raise. The company also says it may end up doing a combination of the three.

“Based on Tower's updated CPR, the Welwitschia-1 well will target risked prospective resources of 496mmboe net to Towers' 30% interest in Licence 0010 across multiple reservoir horizons.

“The drilling cost equates to about 5 cents per risked barrel of oil equivalent.

“Drilling is now scheduled to be starting earlier, in mid-February 2014. We look forward to further updates as we move quickly to drill on this giant prospect."

In a separate statement Tower revealed an intriguing strategic development in which it will effectively outsource the technical exploration work to PDF, a specialist geosciences advisory group.

Under this arrangement PDF will provide a tailored exploration department, while, to align the partner with Tower’s goals, a portion of the team’s fees will be paid in shares.

Quick facts: Tower Resources PLC

Price: 0.575 GBX

AIM:TRP
Market: AIM
Market Cap: £6.35 m
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