Tower Resources shares jump on Cameroon farm-out deal
announced on Monday that it has signed binding heads of terms with OilLR Pty Ltd, an Australian private company, for a 24.5% working interest in the Thali PSC in Cameroon.
The deal will see OilLR cover a US$7.5 million farm-out of the PSC, in return for a 24.5% working interest, subject to an overriding royalty of 10% for Tower Resources.
The two companies said they expect to complete the transaction by 15th April 2020, subject to due diligence.
The well is estimated to cost around US$15 to $16 million, with US$3 million having already been spent.
Tower Resources said it remains in discussion with several other parties for the farm-out of up to a further 24.5% interest in the Thali PSC on similar terms.
Shares in Tower Resources were trading 35% higher at 0.575p on Monday
Jeremy Asher, Tower's Chairman and CEO, commented: "We are delighted to have the opportunity to work with Greg Lee and Art Malone of OilLR on this project in addition to securing this funding for the well, and we intend to have the balance of the funding in place by the time this transaction completes.”
He said: “This agreement is also consistent with our intention to commence drilling NJOM-3 in June, subject to finalisation of the rig schedule and the service companies' schedules.”
“We expect this well to transform the Company by converting current contingent resources into proven reserves, so putting us firmly on the path to production in 2021."
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