Tower Resources PLC (AIM:TRP) (AIM:TRP) has inked an agreement with Beluga Energy Limited which will farm-in to the Thali Production Sharing contract in Cameroon, as a non-operating partner.
The deal delivers US$15mln towards the costs of the NJOM-3 well, which is presently estimated to cost US$16.8mln (of which some US$3mln is already spent). Well costs above US$15mln will be funded pro-rata.
“Short-cycle oil and gas development projects such as this have excellent economics, which reflect their importance to Africa's overall energy balance,” said Tower chair Jeremy Asher.
“The Njonji structure on which we are drilling the NJOM-3 well is one of several attractive structures on the Thali block, and we are looking forward to a great future developing these resources together."
Beluga chief executive Warebibo Soroh, meanwhile, added: “This investment fits perfectly with our strategy to invest in de-risked upstream assets, and supports the integration of our services from downstream to upstream.
“Our technical team has extensive experience in developing assets in the Gulf of Guinea and will collaborate with Tower in bringing the Thali block to first oil."
Along with the 49% interest in the PSC, Beluga also receives a 10% overriding royalty for Tower’s Cameroon subsidiary.