Tower Resources PLC Namibia Cost Dispute Resolved (2497A)
December 19 2014 - 2:00AM
UK Regulatory
TIDMTRP
RNS Number : 2497A
Tower Resources PLC
19 December 2014
Tower Resources plc
Namibia Cost Dispute Resolved
19 December 2014
Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)),
the AIM-listed Africa-focussed oil and gas exploration company, is
pleased to announce that it has reached agreement with the
Operator, Repsol Exploration (Namibia) (Pty) Limited ("Repsol"),
relating to the disputed costs associated with the drilling of the
Welwitschia prospect, offshore Namibia.
As announced on 3rd September 2014, the Operator's estimate of
well and other related costs for the drilling of the Welwitschia
prospect, which had been completed on 15th June 2014, had increased
to US$33.0 million net to Tower. At that date, Tower's subsidiary,
Neptune Petroleum (Namibia) Limited ("Neptune"), had settled
US$25.3 million of these costs.
Following amicable discussions with the Operator, agreement has
been reached settling Neptune's share of costs at US$28.3 million.
Consequently, a final cash payment of US$3.0 million is being made
by Neptune in full and final settlement of all costs associated
with the well and the Licence exploration period which ended on
22nd August 2014. This represents a net reduction of US$4.7 million
against the previous estimate.
A firm budget has been agreed for the next exploration period
which extends to 22nd August 2015. This work programme is designed
to obtain a fuller understanding of the results of the well and of
its implications for the remaining prospectivity of the Licence,
especially the large untested deeper targets, including the Albian
carbonates, now there is a well-tie to the existing 3D seismic.
Following the final US$3.0 million payment, Tower's cash
position will be approximately US$7.5 million. The Company is
adequately funded for its remaining commitments with respect to the
drilling of the Badada-1 well, onshore Block-2B, Kenya, which is
expected to spud by early January 2015 and for which further cash
costs of US$1.9 million are budgeted.
Graeme Thomson, CEO, commented: "We are pleased to have resolved
these matters and now to be working to improve our understanding of
the untested prospectivity in our Namibia Licence. We can now focus
on our exciting and potentially play-opening well onshore Kenya and
continue developing our African portfolio"
Contacts
Tower Resources plc
Graeme Thomson (CEO)
Andrew Matharu (VP - Corporate Affairs)
+44 20 7253 6639
Peel Hunt LLP (Nominated Adviser and Joint Broker)
Richard Crichton/Charles Batten
+44 20 7418 8900
GMP Securities Europe LLP (Joint Broker)
Rob Collins/Emily Morris
+44 20 7647 2800
Vigo Communications
Chris McMahon/ Peter Reilly
+44 20 7016 9572
This information is provided by RNS
The company news service from the London Stock Exchange
END
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