Tower Resources PLC (LON:TRP) has provided an update regarding progress on the farm-out process in respect of its Thali production-sharing contract (PSC) in Cameroon being conducted through its wholly-owned subsidiary Tower Resources Cameroon SA.
The AIM-listed, Africa-focused oil and gas company said the binding Heads of Terms (HoT) with OilLR Pty Ltd, which was signed on February 28, 2020, and amended on March 29, 2020, is progressing towards completion, with the first payment into escrow now expected in late July or first half of August.
The company noted that while this is later than originally planned due to factors arising from the coronavirus pandemic, both parties remain committed to completing the transaction. It said the backstop date for completion has been amended to September 15, 2020, and both parties hope to have all funds in escrow well before that date.
Tower Resources said is continuing discussions with other potential farm-in partners to the Thali PSC, on similar terms to those agreed with OilLR. As previously announced, the HoT has been structured to accommodate such additional investors.
The company also noted that it is in discussions regarding a further extension to its Loan Facility originally announced on April 19, 2019, and extended to June 30, 2020, and expects to conclude this extension before the expiry of the current term. This facility is held by Pegasus Petroleum Ltd, a company beneficially owned by the company's chairman and CEO, Jeremy Asher.
Asher commented: "We are pleased that this transaction is still on track, and we look forward to having funds in hand in good time for the resumption of normal oil and gas operations. While the timing of the removal of travel and other restrictions remains uncertain, we are using this time to get as fully prepared as we can for drilling and testing the NJOM-3 well."
In a note to clients, analysts at 'house' broker SPAngel commented: "Whilst a small delay to the farm-in, shareholders will be encouraged that both parties remain committed to completing the transaction in our view. The Thali licence offers attractive project economics in what is potentially a prolific hydrocarbon province."
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