Tower Resources plc, an upstream oil and gas exploration and production company, on Thursday announced they have received a formal letter of approval from the Ministry of Industries, Mines and Energy for the farm-out of the PEL96 license to Prime Global Energies Limited.
The company said the letter of approval represents the finalisation of the only outstanding condition under the farm-out contract, announced in January last year. It will now send out a notice of completion to Prime Global Energies and a draft deed of assignment, novation and amendment to the ministry and Tower’s partners, with completion expected to follow shortly.
According to the terms of the agreement, Prime Global Energies will acquire a 25% non-operated interest in PEL96, with Tower receiving over US$2.5 million in reimbursement of costs and other cash payments, as stated in terms of the contract.
The company indicated that it has an additional farm-out agreement with Prime Global Energies for a US$15 million contribution to the Thali work programme offshore Cameroon, in return for a 42.5% non-operated interest in the license. However, this agreement is still waiting similar governmental approvals in Cameroon.
This letter of approval, and the imminent completion with Prime Global Energies is expected to unlock progress across Tower’s blocks offshore Namibia, which cover 23,297km2 of the northern Walvis Basin and Dolphin Graben.
The funds will further enable the company to proceed with its evaluation of the large stratigraphic and structural leads and prospects across the PEL96 license area, as well as the reprocessing of the previously acquired 2D seismic data over large areas of the license, with the view to informing future choices regarding the 3D seismic data acquisition area.
Tower Resources Chairman and Chief Executive, Jeremy Asher thanked the ministry, the Upstream Petroleum Unit and the National Petroleum Corporation of Namibia for their review and continued engagement throughout this process.
“We would also like to welcome Prime Global Energies who we view as a highly favourable partner for PEL96, with substantial technical and financial resources and a track record of operational success. We look forward to work alongside them and our other stakeholders to progress with the work programme offshore Namibia.”
