Tower Resources makes further progress on Thali farm-out

Africa-focussed oil and gas company Tower Resources updated the market on the farm-out process at the Thali production sharing contract (PSC) in Cameroon on Tuesday, which was being conducted through its wholly-owned subsidiary, Tower Resources Cameroon.

The AIM-traded firm said the binding heads of terms with OilLR, signed on 28 February and amended on 29 March, was now progressing towards completion.

It said the first payment into escrow was expected in late July or in the first half of August.

The board said that, while that was later than originally planned due to factors arising from the pandemic, both parties were committed to completing the transaction.

It added that the backstop date for completion had been amended to 15 September, with both parties “hoping” to have all funds in escrow well before that date.

The company was continuing discussions with other potential farm-in partners to the Thali PSC, on similar terms to those agreed with OilLR, the directors added.

As it had previously announced, the heads of terms had been structured to accommodate such additional investors.

Tower Resources also said it was in discussions over a further extension to its loan facility, originally announced on 19 April 2019 and extended to 30 June 2020, and expected to conclude that extension before the expiry of the current term.

The facility was held by Pegasus Petroleum - a company beneficially owned by the company's chairman and chief executive officer Jeremy Asher.

“We are pleased that this transaction is still on track, and we look forward to having funds in hand in good time for the resumption of normal oil and gas operations,” said Jeremy Asher.

“While the timing of the removal of travel and other restrictions remains uncertain, we are using this time to get as fully prepared as we can for drilling and testing the NJOM-3 well.”

At 0928 BST, shares in Tower Resources were down 1.13% at 0.35p.