Tower Resources PLC (AIM:TRP) chief executive Jeremy Asher highlighted "significant progress in a volatile environment" as the AIM-quoted explorer reported interim results for the first six months of 2022.
Significantly, the company highlighted that its exploration prospects and asset base were boosted by encouraging third-party drilling results in Namibia, but also that rig availability has been impacted by the uptick in industry interest across the oil sector.
Asher said it may still be possible to drill the company’s hotly anticipated NJOM-3 well, offshore Cameroon, before the end of the calendar year, but it is more likely to be in 2023.
“We still expect to get the well underway in good time,” he said.
Asher noted: “The more active market for rigs and services has presented both benefits and challenges: a number of stacked rigs have been put back into service, but several of these have been pulled into other markets and others are still finalising work sequences, while lead times for services have increased.
“This means that we have yet to finalise our rig selection and timing for the NJOM-3 well, as we need to fit our single-well requirement in with other companies' multi-well plans.”
“We have also made progress with the financing of the NJOM-3 well.
“We received and agreed a non-binding term sheet for around US$7mln of debt financing from BGFI, the largest bank in Cameroon, in June, and BGFI tell us that they are still expecting to have their board's binding approval and draft documentation in September (today) or shortly after.
“In the meantime, we also received a non-binding term sheet for around US$10mln of debt financing from another bank, the Cameroon branch of one of the largest and oldest banks on the African continent, which we are presently reviewing.”
The company also said it is monitoring the ongoing litigation between South Africa and Shell over Shell's proposed seismic survey, and the Environmental Impact Assessments (EIA) conducted prior to the survey.
Tower said the matter should not prevent an the intended survey over its deepwater lead in the Algoa-Gamtoos block, where it is partnered with NewAge and the prospects are ‘on-trend’ TotalEnergies' Brulpadda and Luiperd discoveries, but it does emphasise how critical the correct EIA process is.
Asher, meanwhile, commented: “We believe that our deepwater area is less environmentally sensitive than the area that was subject to the recent controversy, and shareholders will recall that we have already conducted seismic data acquisition in this block closer to shore.
“Nevertheless, it is now even clearer than before that the EIA and planning process cannot be rushed, which we believe the Petroleum Authority of South Africa also understands.”
Asher highlighted the scale of the potential prize for the company in South Africa where prospects have been estimated at a potential 1.4bn barrels of recoverable resources (if confirmed by drilling).
In Namibia, desktop work has continued with the completion of a new initial phase of basin modelling work and it expects to share findings with investors "in the coming weeks". Basin modelling work, meanwhile, continues.
Tower ended the first half with just over US$95,000 of cash before raising further working capital through a £1.5mln placing in August (in which Jeremy Asher subscribed for £250,000 worth of shares).
The pre-revenue exploration company reported a US$522,127 loss.