By: Staff writer
Africa-focused energy company Tower Resources said it has completed an institutional placing of up to $6 million (N$102.4 million) from which proceeds will be used to fund work programme commitments for the company’s licenses in Namibia, South Africa and Cameroon.
The public listed company completed an institutional placing to Energy Exploration Capital Partners (EECP), a U.S.-based institutional investor, pursuant to an investment deed.
The placing will initially raise $1.25 million (N$21.33 million) as a placing to the placee of new ordinary shares in the company worth $1.36 million (N$23.21 million).
Following the initial placing, EECP will invest up to $1.75 million (N$29.9 million) in the aggregate for shares worth around $1.9 million (N$32.42 million) in the aggregate, no earlier than three months and no later than eight months after the initial placing.
If required by the company, a further $3 million (N$51.2 million) may be raised from the placee for shares worth an equivalent amount.
Tower Resources will use the proceeds from the placing to fund work programme commitments in respect of its licenses in Namibia,South Africa and Cameroon, as well as for general working capital purposes.
“We are very pleased to announce this placing to EECP. The placing has been structured specifically to fit alongside the intended bank financing led by BGFI Bank Group, which is presently awaiting group credit committee approval,” said Jeremy Asher, Tower Resources’ chairman and CEO.
The London-based oil and gas company inked a petroleum agreement with Namibia inNovember 2018, covering an 80% operated interest in blocks 1910A, 1911 and 1912B – covering 23,297 km2 in the Walvis Basin and Dolphin Graben, offshore Namibia.
The company said this is an under-explored region in which recent drilling results have proven the presence of a working oil-prone petroleum system and good quality turbidite and carbonate reservoirs.
The agreement was signed by the company (80%), together with its carried interest partner the National Petroleum Corporation of Namibia (Namcor) (10%) and its local partner ZM Fourteen Investment CC (10%).
This is also an area that Tower Resources knows well since blocks 1910A and 1911 formed part of Tower’s original license PEL0010, which Tower and its partners, Repsol and Arcadia Expro Namibia, relinquished in 2015.
The new blocks are located directly to the north of licences in which ExxonMobil (‘Exxon’) and Africa Energy Corp (‘Africa Energy’) have acquired interests. In addition, Kosmos Energy have also recently farmed into Shell operated PEL39 in the deep-water Orange Basin.
Tower Resources’ blocks span a total area of more than 23,297 sq km (8,995 sq miles).
Three distinct reservoir sections are thought to contain potential recoverable resources of 1.4 Bboe, comprising a shallow section (470 MMboe), a deeper slope section (231 MMboe) and a basin floor fan section (710 MMboe).
In the second half of last year, the focus switched to preparations for acquiring further 3D seismic over the deepwater prospective area.
However, unresolved environmental issues delayed another survey in adjoining acreage, so the partners agreed to defer the 3D seismic acquisition until these issues could be addressed.