Investors in Tower Resources PLC (AIM:TRP) should be pleased with the news of a new, more beneficial, funding route for drilling offshore Cameroon.
Tower on Monday announced it is redrawing its funding plans for drilling the NJOM-3 well at the Thali project, as a planned farm-out of 49% to Beluga Energy for US$15mln was shelved. A new proposal is being worked on by all the parties, Tower noted.
Talks are now taking place with local banks in Cameroon and the company believes that debt financing may be available to cover a significant portion of the well cost.
In a note, stockbroker SP Angel commented: “This marks the first update from the company on its Cameroonian farm-out process in six months, and investors should be pleased to hear that Tower expects to have a more beneficial funding arrangement in place to drill the Njonji structure in 2H22, which is one of several prospective structures on the Thali block.
“Next steps will include the finalisation of the well financing and the rig contract in 3Q22, ahead of the planned mobilisation of the rig in 4Q22.”
Tower chief executive Jeremy Asher added: "We realise that it has taken longer than any of us would have liked to reach this point, but we also feel that we have been able to make good use of the extra time both to enhance our understanding of the subsurface and our plans for the next steps on Thali, and also (we hope) to improve the terms of the well financing.”