TIDMTRP
RNS Number : 0634T
Tower Resources PLC
15 July 2015
15 July 2015
Neither this Announcement nor any part of it constitutes an
offer to sell or issue or the solicitation of an offer to buy,
subscribe or acquire any new ordinary shares in any jurisdiction in
which any such offer or solicitation would be unlawful. The
information contained herein is restricted and is not for
publication, release or distribution, in whole or in part, directly
or indirectly, in, or into or from the United States, Australia,
Canada, Japan, the Republic of South Africa or any other
jurisdiction in which such publication, release or distribution
would be unlawful.
Tower Resources plc
Placing to raise approximately GBP5.2 million ($8 million)
net
Tower Resources plc ("Tower" or the "Company") (TRP.L,TRP:LN),
the AIM listed Africa focused oil and gas exploration company, is
pleased to announce:
- a placing and subscription to a raise approximately GBP5.2
million ($8 million), after expenses, (the "Placing") through the
issue of new ordinary shares ("Ordinary Shares");
- the completion of negotiations for a 100% interest in the
Thali PSC (as defined below and previously known as the "Dissoni
Block") located in a sub-basin of the prolific Niger Delta,
offshore Cameroon; and
- the pursuit of a new strategic regional initiative in Namibia,
an underexplored and highly prospective region.
Highlights
-- Approximately GBP5.2 million ($8 million) net of expenses to
be raised by way of a Placing with certain existing and new
investors at a price of 0.19 pence per placing share:
o Funding secures inter alia (i) the Company's ability to enter
into the Thali PSC and thereby entry to the highly prospective
Thali Block, (ii) payment of anticipated costs associated with the
initial stage of a new regional Namibian strategy which the Company
has been developing in consultation with the Namibian government,
and (iii) provides funds to deliver its current work commitments
across the remainder of its portfolio
o Introduction of M&G Investments ("M&G") as a new
strategic investor in the Company with an 18% shareholding in the
enlarged share capital based on an investment of approximately
GBP2.3 million ($3.55 million) in the Placing
o Directors of the Company, staff, consultants and their
connected persons have undertaken to subscribe for 491,000,000
Ordinary Shares, raising approximately GBP0.9 million ($1.4
million) in the Placing.
-- Imminent signing of a 100% interest in the shallow water
Thali Block PSC in the Rio Del Rey Basin, a proven producing
sub-basin of the petroliferous Niger Delta, offshore Cameroon
o Production sharing contract (the "Thali PSC" or the "PSC") now
agreed with the Government of Cameroon and with signing anticipated
imminently
o The Thali Block includes existing oil and gas discoveries and
contains a number of already identified exploration
opportunities
o A three year work programme is planned to unlock both the
appraisal and exploration potential, including acquiring new 3D
seismic in 2016 and a commitment to drill a well in 2017/18
o Entry into Cameroon marks a strategic shift, introducing an
asset within a proven producing basin to Tower's portfolio.
-- Tower are currently negotiating new acreage positions
offshore Namibia, with the aim of providing economies of scale and
lower risk in future exploration, full details of which will be
announced in due course:
o Namibia remains, in the Company's view, a highly prospective
area with only 15 exploration wells along a 1,600km section of the
Atlantic Margin, with proven source, reservoir and seal
o HRT's Wingat #1 well, drilled in 2013, was the first Namibian
well to recover oil to surface and has demonstrated the presence of
a working petroleum system
o Interest in the area remains high with wells planned by Shell
and OMV/Murphy in 2016/17, and with Chariot and Tullow also likely
to drill within a similar timeframe.
-- The Placing also provides funding to progress Blocks 40 and
41 in Zambia, which cover in the region of 6,000 km(2) of the
western part of the unexplored Mid-Zambesi basin:
o Initial fieldwork has demonstrated the existence of excellent
mature source rocks for gas, and the potential for oil
o Tower will undertake further fieldwork later in 2015 to better
understand the Blocks' potential prior to any commitment to
airborne gravity and magnetic surveys in 2016 and 3D seismic in
2017
o A farm-out process has been initiated to accelerate the
Company's work programme
o Tower's commitments remain low and the Company retains the
ability to exit the Blocks at any time with no contingent
liability.
Graeme Thomson, Chief Executive Officer of Tower Resources,
said:
"The Placing secures Tower's entry into the Thali Block offshore
Cameroon and provides the financial strength to commence our work
programme on this Block and across Tower's wider portfolio. I am
extremely pleased with the support that this oversubscribed Placing
has received from existing and new institutional investors and from
the Directors, staff, consultants and others connected persons of
the Company. We are particularly pleased to welcome M&G as an
18% shareholder, endorsing management's strategy and working
together to achieve our shared ambitions, most notably in relation
to Namibia and Cameroon.
Our entry into the Thali Block is a shift in our risk profile
from frontier to proven basins, which has been over eighteen months
in the making. Located in the Rio Del Rey Basin, a sub-basin of the
highly petroliferous Niger Delta, the Thali Block provides Tower
with lower risk appraisal and exploration potential in this shallow
water proven-producing region while maintaining significant upside
potential for the Company and its investors both there and in
frontier areas.
We continue to see value and opportunities in Namibia and we are
in discussions for new acreage positions which, if successful, will
provide low cost exposure to assets with significant exploration
potential.
Both of these initiatives reflect a move in Tower's strategy
towards lower cost exposure, technical de-risking of the plays and
the intention to farm-out higher cost exposures to larger
companies.
Finally, we have made excellent progress in Zambia, and
completed our initial work programme on time and on budget. The
results to date are encouraging, demonstrating the potential for
both oil and gas plays on our Blocks 40 and 41. In South Africa, we
hope to see a restart of drilling activity by the industry when the
proposed legislative framework is clear, but in the meantime our
work commitments in this highly prospective area are minimal.
These are exciting times for Tower. The Board look forward with
increasing confidence to being able to deliver its strategy with
sustained cost-effective activity across a focussed portfolio."
Contacts
Tower Resources plc
Jeremy Asher (Chairman)
Graeme Thomson (CEO)
Andrew Matharu (VP - Corporate Affairs)
+44 20 7253 6639
Peel Hunt LLP (Nominated Adviser and Joint Broker)
Richard Crichton/ Ross Allister/ Chris Burrows
+44 20 7418 8900
GMP Securities Europe LLP (Joint Broker)
Rob Collins/Emily Morris
+44 20 7647 2800
Vigo Communications
Chris McMahon/Alex Aleksandrov
+44 20 7016 9572
Note regarding forward-looking statements:
This announcement contains certain forward looking statements
relating to the Company's future prospects, developments and
business strategies. Forward looking statements are identified by
their use of terms and phrases such as "targets" "estimates",
"envisages", "believes", "expects", "aims", "intends", "plans",
"will", "may", "anticipates", "would", "could" or similar
expressions or the negative of those, variations or comparable
expressions, including references to assumptions.
The forward looking statements in this announcement are based on
current expectations and are subject to risks and uncertainties
which could cause actual results to differ materially from those
expressed or implied by those statements. These forward looking
statements relate only to the position as at the date of this
announcement. Neither the Directors nor the Company undertake any
obligation to update forward looking statements, other than as
required by the AIM Rules for Companies or by the rules of any
other applicable securities regulatory authority, whether as a
result of the information, future events or otherwise. You are
advised to read this announcement and the information incorporated
by reference herein, in its entirety. The events described in the
forward-looking statements made in this announcement may not
occur.
Neither the content of the Company's website (or any other
website) nor any website accessible by hyperlinks on the Company's
website (or any other website) is incorporated in, or forms part
of, this announcement.
Any person receiving this announcement is advised to exercise
caution in relation to the Placing. If in any doubt about any of
the contents of this announcement, independent professional advice
should be obtained.
This summary should be read in conjunction with the full text of
the announcement which follows.
Background to and reasons for the Placing
The last year has been a challenging one for all industry
participants. A combination of a falling oil price and a broad lack
of industry drilling success has led to an unfavourable environment
for exploration companies. Despite this, Tower's strategy to
maintain and to develop a high-impact exploration portfolio while
minimising its forward commitments and costs has continued. The
Company has also, for more than a year, sought to extend that
strategy in response to changing market conditions by seeking lower
risk exploration and appraisal opportunities. The initiatives
announced today form part of the execution of that strategy and the
entry into the Thali Block in Cameroon, in particular, adds proven
basin exposure to complement and balance Tower's frontier
activities. Whilst we expect market conditions to remain difficult
for the sector, the Placing allows the Company to continue to
progress and develop its portfolio and will ensure that when
markets recover, Tower is well placed to benefit.
The Placing
The Company has conditionally placed 2,904,989,747 Ordinary
Shares in the capital of the Company (the "Placing Shares") at a
price of 0.19 pence per share to raise net proceeds of
approximately GBP5.2million (US$8 million) net of estimated fees
and costs of GBP0.3 million ($0.5 million), by means of a placing
and subscription with institutional and other investors by Peel
Hunt LLP and GMP Securities Europe LLP acting as joint bookrunners.
Application has been made for the Placing Shares to be admitted to
trading on AIM. It is expected that Admission of the Placing Shares
will become effective and that dealings will commence in the
Placing Shares by 8.00 a.m. on 20 July 2015.
Following admission of the Placing Shares, the Company's
enlarged issued share capital will comprise 6,735,155,777 ordinary
shares of 0.1 pence each with voting rights in the Company. This
figure may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in the
interest in, the share capital of the Company under the FCA's
Disclosure and Transparency Rules.
Use of Proceeds
The Placing is expected to raise net proceeds of approximately
approximately GBP5.2 million (US$8 million) and the expected
application of funds raised in the Placing, after expenses is
summarised as follows:
US$m
US$m
Cameroon 5.4
Namibia 2.7
Zambia 0.6
Other licences 0.5
Corporate 0.6
Less: current cash balance 1.8
TOTAL PLACING (net of estimated fees
and costs): 8.0
Cameroon
Tower was selected as the preferred bidder for the Thali Block,
offshore Cameroon, in September 2013. Thali covers an area of
119km(2) and lies in the prolific Rio del Rey basin, in the eastern
part of the Niger Delta. The Thali PSC has been negotiated and
Tower expects to be formally awarded a 100% interest in the Block
imminently. Thali represents a low cost entry into a mature region
with low-risk, moderate volume targets and the potential for
significant exploration upside.
The Rio del Rey basin has, to date, produced over one billion
barrels and has remaining reserves estimated at 1,200 million boe,
primarily from shallow producing sands at depths of less than 2,000
metres. Rio Del Rey is a sub-basin of the prolific Niger Delta, an
area in which over 34.5 billion barrels of oil has been discovered,
with 2.5 billion boe attributed to the Cameroon section.
The Thali Block has the potential for up to four distinct play
systems, including the established play in which three discovery
wells, two gas (Rumpi-1, Njonji-2) and one oil (Njonji-1), have
already been drilled on the Block. These are currently viewed as
sub-commercial, but with better quality seismic Tower sees
potential to add incremental oil reserves to achieve commerciality.
There is also significant potential to develop prospects at deeper
levels, in both structural and stratigraphic traps, once better
imaging has been achieved.
The existence of infrastructure in adjacent blocks means that
the development of a 20 million barrel field has the potential to
be economically viable at current oil prices. There are 7 million
barrels already discovered on the Block.
On signing of the Thali PSC, the Company's priority will be the
acquisition of 3D seismic in early 2016. The seismic will be used
to update the existing 24 year old data set and allow better
resolution of shallow plays alongside imaging of deeper sections.
The initial exploration period is for three years, and Tower
expects to be drilling in 2017/18. The market downturn in the
services sector presents the opportunity for the Company to
leverage lower seismic and drilling costs and a partner will be
sought to share Tower's financial commitment and provide additional
technical input.
Namibia
Tower's strategy for Namibia has been developed in conjunction
with M&G's Oil and Gas team. We are both convinced that Namibia
will become a significant oil and gas province in the future and
intend to play a key role in that. Tower is currently negotiating
substantial new operated acreage positions offshore Namibia and
these will be announced once they have been secured.
Tower currently retains a 30% interest in Repsol-operated
licence PEL10, located in the Walvis Basin, offshore Namibia. The
licence was originally awarded 100% to Tower's subsidiary Neptune
Petroleum (Namibia) Limited in 2005. As previously reported, the
Welwitschia-1A well was completed in the third quarter of 2014 but
did not reach the deeper objectives. The current exploration period
on PEL10 extends to 22 August 2015 and all current licence
obligations have been met. The next period would require a well to
be drilled and Tower does not consider that to be justified
currently. This area forms part of the negotiations referenced
above.
Tower and many other companies believe that Namibia remains
under-explored, with significant potential for major discoveries.
The Wingat #1 well drilled by HRT in 2013 recovered the first oil
to surface and has demonstrated the existence of a working
petroleum system in the North, in addition to the system already
demonstrated by the Kudu discovery in the South.
Further, the Company notes plans announced by other
international companies for drilling in 2016 and 2017. Interest in
the area remains high with wells planned by Shell and OMV/Murphy in
2016/17 with Chariot and Tullow also likely to drill within a
similar timeframe, and there has been considerable seismic
acquisition in late 2014 and into 2015.
Zambia
Tower became operator of and acquired an 80% interest in Blocks
40 and 41, covering an area of 6,526km(2) onshore Zambia within the
Zambesi basin, in April 2014. During August 2014, Tower completed
an extensive programme of geological fieldwork in Blocks 40 and 41,
as part of the initial period work programme. Since that time, the
Company has successfully completed all of its initial period
commitments in this frontier basin and is well positioned for the
next exploration period.
The results from this fieldwork are encouraging and indicate
that elements for a working petroleum system are present with the
potential for both oil and gas generation. Given the excellent
surrounding infrastructure and constrained domestic energy market,
Tower believes that there is a significant gas to power opportunity
in the area, with the Blocks well positioned relative to existing
infrastructure.
The three-year secondary period has been split into three one
year periods with respective commitments to further field work
(being funded from the Placing), airborne gravity and magnetic data
acquisition and interpretation, and a 2D seismic programme. The
acreage can be relinquished at the end of each annual decision
point if results are discouraging, so commitments are light and
proportionate to prospectivity. Tower is actively looking for
partners to accelerate the programme so that prospects could be
drilled in 2017/18.
About M&G
M&G has invested approximately GBP2.3 million ($3.55
million) in the Placing and will be an 18% shareholder in the
Company.
M&G is an international active asset manager, investing on
behalf of individuals and institutions for over 80 years. At 31
March 2015 the firm managed over GBP269 billion of assets through a
wide range of investment strategies across equities, bonds,
property and multi asset.
Headquartered in London, M&G employs over 1,800 people
worldwide operating from offices across Europe and Asia.
M&G's history is a story of investment firsts, from the UK's
first mutual fund in 1931 to the Inflation Linked Corporate Bond
Fund in 2010. M&G is the investment arm of Prudential plc in
the UK and Europe.
Directors Participation
The Directors of the Company have agreed to subscribe, in
aggregate, for 371,500,000 Ordinary Shares under the Placing at a
cost of approximately GBP0.7 million ($1.1 million).
As at the date Number of Placing Immediately following
of this announcement Shares acquired Admission of the
pursuant to Placing Shares
the Placing
----------------- --------------------------- ------------------- --------------------------
Number % of issued Number of Ordinary Number of % of issued
of Ordinary share Shares Ordinary share
Shares capital Shares capital
----------------- ------------- ------------ ------------------- ------------ ------------
Jeremy Asher(1) 276,384,252 7.22 171,000,000 447,384,252 6.64
----------------- ------------- ------------ ------------------- ------------ ------------
Peter Taylor 107,253,051 2.80 118,000,000 225,253,051 3.34
----------------- ------------- ------------ ------------------- ------------ ------------
Peter Blakey 99,130,216 2.59 53,000,000 152,130,216 2.26
----------------- ------------- ------------ ------------------- ------------ ------------
Graeme Thomson 10,000,000 0.26 26,500,000 36,500,000 0.54
----------------- ------------- ------------ ------------------- ------------ ------------
Philip Swatman
(2) 4,500,000 0.12 3,000,000 7,500,000 0.11
----------------- ------------- ------------ ------------------- ------------ ------------
Note (1): These shares are held by Agile Energy Limited, which
is owned by the Asher Family Trust of which Jeremy Asher is the
lifetime beneficiary
(2): 2,000,000 of these shares are held by Raigersfield Capital
Limited, a company controlled and 52% owned by Mr Swatman
The Remuneration Committee has, in conjunction with its
advisers, determined that it is appropriate to issue options over
120 million shares at the Placing price, which will vest in equal
portions on the anniversary of their grant for the next three
years. This issue will be taken into consideration when the annual
grants are reviewed at the end of 2015.
IMPORTANT NOTICE
This announcement does not constitute or form part of any offer
or invitation to purchase, or otherwise acquire, subscribe for,
sell, otherwise dispose of or issue, or any solicitation of any
offer to sell, otherwise dispose of, issue, purchase, otherwise
acquire or subscribe for, any security in the capital of the
Company in any jurisdiction.
The information contained in this announcement is not to be
released, published, distributed or transmitted by any means or
media, directly or indirectly, in whole or in part, in or into the
United States or to any US Person. This announcement does not
constitute an offer to sell, or a solicitation of an offer to buy,
securities in the United States or to any US Person. Securities may
not be offered or sold in the United States absent: (i)
registration under the Securities Act; or (ii) an available
exemption from registration under the Securities Act. The
securities mentioned herein have not been, and will not be,
registered under the Securities Act and will not be offered to the
public in the United States.
This announcement does not constitute an offer to buy or to
subscribe for, or the solicitation of an offer to buy or subscribe
for, Ordinary Shares in the capital of the Company or any other
security in any jurisdiction in which such offer or solicitation is
unlawful. The securities mentioned herein have not been, and the
Ordinary Shares will not be, qualified for sale under the laws of
any of Canada, Australia, the Republic of South Africa or Japan and
may not be offered or sold in Canada, Australia, the Republic of
South Africa or Japan or to any national, resident or citizen of
Canada, Australia, the Republic of South Africa or Japan. Neither
this announcement nor any copy of it may be sent to or taken into
the United States, Canada, Australia, the Republic of South Africa
or Japan. In addition, the securities to which this announcement
relates must not be marketed into any jurisdiction where to do so
would be unlawful.
This announcement has been issued by and is the sole
responsibility of the Company.
Peel Hunt LLP is authorised and regulated in the UK by the
Financial Conduct Authority and is advising the Company and no one
else in connection with the Placing (whether or not a recipient of
this announcement). Peel Hunt will not be responsible to any person
other than the Company for providing the regulatory and legal
protections afforded to customers of Peel Hunt nor for providing
advice in relation to the contents of this announcement or any
matter, transaction or arrangement referred to in it. The
responsibilities of Peel Hunt, as nominated adviser under the AIM
Rules for Nominated Advisers, are owed solely to London Stock
Exchange and are not owed to the Company or to any Director or
Shareholder or to any other person in respect of their decision to
acquire Ordinary Shares in reliance on any part of this
announcement.
GMP Securities Europe LLP ("GMP") is authorised and regulated in
the UK by the Financial Conduct Authority and is advising the
Company and no one else in connection with the Placing (whether or
not a recipient of this announcement). GMP will not be responsible
to any person other than the Company for providing the regulatory
and legal protections afforded to customers of GMP nor for
providing advice in relation to the contents of this announcement
or any matter, transaction or arrangement referred to in it.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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