viewTower Resources PLC

Tower Resources to raise up to £13mln ahead of Namibia drilling

"We are delighted with the positive response to this placing, at a time when many E&P investors have been holding back from the AIM market," said chairman Jeremy Asher.


Tower Resources (LON:TRP) has revealed plans to raise up to £13mln to pay its share of drilling costs for the upcoming Welwitschia-1 well in Namibia.

Operating partner Repsol is due to start drilling Welwitschia-1 in February.

The new cash will also help pay for the acquisition of Wilton Petroleum, announced earlier this month, and to enhance its ability to pursue new ventures.

"At this crucial time in the company's development it is important that we have the means to fund our share of 2013 costs for the Welwitschia-1 well and to have the flexibility to enter into further new ventures,” said chief executive Graeme Thompson.

“Our high-potential 2014 drilling activity and new venture ambitions mean that these are truly exciting times for Tower."

Tower has raised £9mln with a share placing to existing and new investors; 800mln new shares will be issued at 1.125p each. A further £4.1mln can still be raised via an open offer to all Tower shareholders.

The company also said it will farm-out a 10% stake in its Namibian licence, reducing its interest to 20%, in order to cover any remaining drilling costs for 2014.

Tower chairman Jeremy Asher said: "We are delighted with the positive response to this placing, at a time when many E&P investors have been holding back from the AIM market.

“We are especially pleased that two existing shareholders have increased their holdings substantially, and that a number of new institutional investors have joined the register.

“We could have completed this funding without the open offer, and we are not depending on it for funds; but many small investors have supported the company loyally in the past and, in view of the low price of this issue, we felt that they should also have the opportunity to subscribe for shares on the same terms as the institutions if they wish.

“I believe that this placing underscores the credibility of the company's management team and strategy, as well as the depth of the company's financial support within its own shareholder base and its ability to expand that base further in the future."

"Through a deal earlier this month Tower is acquiring Wilton Petroleum, a private company that owns a 20% interest in the Ophir Energy (LON:OPHR) operated Marovoay block, onshore Madagascar.

Wilton’s interest in Marovoay comes with a ‘carry’ for up to two wells (capped at US$4mln for each well).

Ophir is slated to start drilling the first well by mid-2014. This is expected to target the 90mln barrel Anjohibe prospect. According to Tower there are over 20 prospects within the Marovoay block.

Quick facts: Tower Resources PLC

Price: 0.375 GBX

Market: AIM
Market Cap: £4.97 m

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