Tower Resources has entered into two farm-out agreements with Prime Global Energies for minority interests in the Thali license off Cameroon and PEL96 off Namibia. The deals involve significant cash contributions from Prime, facilitating the drilling of the NJOM-3 well and boosting Tower’s financial position. Completion of these agreements is expected by early 2025, pending regulatory approvals.
Tower Resources, a United Kingdom-based oil and gas company, has successfully executed two farm-out agreements with Prime Global Energies, resulting in minority, non-operated interests in its Thali license located offshore Cameroon and PEL96 offshore Namibia. The arrangement allows Tower Resources Cameroon to transfer a 42.5% non-operated interest in the Thali license, with Prime contributing $15 million towards the work program and the drilling of the NJOM-3 well scheduled for 2025, alongside additional payments.
The drilling operations’ timeline will mainly depend on the government’s approval for the Thali farm-out transaction and an extension for the First Exploration Period set to conclude on February 4, 2025. As multiple rigs are available for the drilling of the NJOM-3 well, the scheduling will rely heavily on the sequence of rig availability and necessary equipment mobilization time. Furthermore, through its subsidiary Tower Resources (Namibia), Prime will also secure a 25% non-operated interest in PEL96, following the agreements with Tower.
Tower will receive immediate cash payments totaling $937,500 with an additional $3.4 million payable upon the agreements’ completion, amounting to $4.4 million in total. Completion is anticipated by the end of the first quarter of 2025, pending approvals from the government and other regulatory authorities.
Tower’s Chairman and CEO, Jeremy Asher, expressed optimism regarding the funding provided, positing that it would enable the firm to proceed with the NJOM-3 well drilling, considered a critical milestone. He further highlighted the significant prospectivity of the PEL96 license offshore Namibia, which has compelled Prime’s involvement as a non-operating partner. The negotiations have led to adjustments in the Pegasus Facility Agreement, altering certain production-based payments which will ultimately grant Tower a larger stake in the license without incurring net costs.
The completion of these transactions is expected to enhance liquidity and strategically bolster the company’s work programs, expediting progress across its asset portfolio and creating greater value for all stakeholders.
The agreements between Tower Resources and Prime Global Energies mark a significant development in the ongoing exploration and production activities within the oil and gas sector offshore Cameroon and Namibia. The strategic partnerships allow Tower to leverage Prime’s capabilities and resources while securing essential funding for upcoming drilling projects. Farm-out agreements are a common practice within the oil and gas industry, enabling companies to share risks and costs associated with exploratory projects while retaining a degree of interest in potential earnings from the findings.
In summary, Tower Resources has finalized two pivotal farm-out agreements with Prime Global Energies that not only secure financial commitments for the exploration of the Thali license in Cameroon but also establish a partnership for operations in Namibia. The agreements will enable Tower to advance its drilling plans, particularly the NJOM-3 well, while benefiting from additional cash inflows. With heightened liquidity and an enhanced participation structure, Tower aims to optimize its exploration activities and deliver value to its stakeholders.
Original Source: www.oedigital.com
