Considerable progress has been made in the farm-out process. Tower is seeking a farm-in partner for a 10% working interest in Namibia PEL0010. A number of interested parties have conducted a full review of the data-room and subsequent follow-up enquiries have been or are in the process of being dealt with. The Company is pleased with the level of interest. Tower expects the final well design and budget to be agreed soon with its partners, Repsol (operator) and Arcadia, and anticipates that this should allow the farm-out process to be brought to a timely conclusion.
Following sea trials, the Rowan Renaissance drillship has this week departed from the rig yard in South Korea. It is now scheduled to commence its operations for the Welwitschia-1 well in Walvis Bay, Namibia on or around 11 April, with the spud being approximately one week later. Based on the CPR update completed by Oilfield International in June 2013, this well is targeting risked resources estimated at 496 mmboe net to Tower’s 30% interest.
New Shares Issued
Tower also announces that it has raised a gross £0.82 million at an average issue price of 4.2p per New Ordinary Share via a modest draw-down on its Equity Financing Facility (“EFF”) with Darwin Strategic Limited (“Darwin”). This funding will result in the issue of 19,250,000 New Ordinary Shares and raised £0.78 million net.
During December 2013 there was strong market demand for Tower shares which could not be fully met and which drove the share price above 5p. The Company therefore decided to undertake a limited equity issue under its EFF, with a strict floor price in place, in order to provide further shares to the market on days of shortage during the first three weeks of January.
Tower’s cash balances are now approximately $18 million, having now already paid approximately $3 million of towards the costs of the well.
Tower has also agreed to issue 1,573,181 New Ordinary Shares under contractual arrangements as part payment for services provided in the second half of 2013 at an average price of 3.1p per New Ordinary Share as detailed below.
Application has been made to the London Stock Exchange for the New Ordinary Shares as set out above to be admitted to trading on AIM. The shares will rank pari passu in all respects with the Company’s existing Ordinary Shares. It is expected that the admission will become effective and that trading in the New Ordinary Shares will commence at 8.00am on 29 January 2014.
Jeremy Asher, Chairman of Tower, said:
“We are pleased with the progress on the farm-out process and on the planning and preparation for the important Welwitchia-1 well, one of the largest upside wells to be drilled by an independent in 2014. We are also well advanced on a number of possible new ventures and we hope to be able to say more about these in the near-future.”