Tower Resources PLC (LON:TRP) has gained some breathing space from the Force Majeure measure in place on the Thali assets offshore Cameroon and can still drill a well there this year, according to house broker SP Angel.
It added that the company has informed the Ministry that at this stage it is still possible that the NJOM-3 well could be spudded prior to 15 September, despite the Force Majeure, if the situation returns to normal quickly enough.
SP Angel adds that while this scenario is now inherently uncertain, Tower remains committed to drilling NJOM-3 as quickly as possible.
Farm-in partner OilLR and Tower have agreed to amend the completion date of the heads of terms until 30 June and thebroker said Tower is satisfied that OilLR's intended investors have the funds to complete the farm-in.
The parties,though,also agree that the transaction cannot be completed until the environment stabilises sufficiently for the project to move forward.
Meanwhile, talks with other possible investors are ongoing, said SP Angel.
Earlier, Tower had said its projects in Cameroon, South Africa and Namibia remain attractive even amidst crude oil market volatility.
Posting its 2019 full-year results, the company noted that Brent crude is now trading at around US$40 per barrel, longer-term pricing (the December 2025 future) is pitched above US$52 per barrel, and there is potential for a tightening of supply in the coming years due to industry-wide cuts in capital investment.
Even if prices slide back to US$45 per barrel the company believes its projects are attractive.