Tower Resources, the AIM-listed oil and gas company focused on Africa, has executed a contract with Borr Drilling for the hire of the Norve jack-up rig, one of Borr’s fleet of high-specification drilling units, to drill the NJOM-3 well on Tower’s Thali license in Cameroon in 2024.

The Company is also announcing its intention to raise gross proceeds of approximately £600,000 through subscriptions for approximately 3,000,000,000 ordinary shares of 0.001p each at a price of 0.02p per Subscription Share (the Subscription Price), representing a discount of approximately 13% to the closing bid price of the shares on 15 December 2023. It is intended that Jeremy Asher, Chairman & CEO, will subscribe for £80,000 of new ordinary shares as part of the Subscription.

The Rig Contract

The Rig is currently subject to existing contracts to deliver a series of wells, whose timing are naturally subject to operational uncertainty. Following the completion of those wells, the Rig is expected to be available in Cameroon between April and August 2024. Subject to the Rig being available during this time period, the Company therefore anticipates that the NJOM-3 well will be spudded in Q2 or possibly Q3 of 2024. The expected date range for the Rig’s availability will be narrowed as it draws nearer.

The contract is also subject to conditions precedent concerning the final documentation of the Company’s Thali license extension, and prepayment of a portion of the expected rig hire. Other terms of the contract are confidential, but the Company can confirm that the contracted day rate for the Rig is in line with the Company’s latest cost projections.

Proposed Subscription

The proposed Subscription is being made to fund working capital and work programme commitments in all three of the Company’s licenses over the coming months, while the documentation of the Company’s license extension in Cameroon and current farm-out discussions are concluded.

The subscription would raise gross proceeds of approximately £600,000 through the issue of approximately 3,000,000,000 ordinary shares of 0.001p each at a price of 0.02p per Subscription Share, representing a discount of approximately 13% to the closing bid price of the shares on 15 December 2023.

It is intended that Jeremy Asher, Chairman & CEO, will subscribe for £80,000 of new ordinary shares as part of the Subscription, and it is also intended to offer the brokers a warrant covering 65 million new ordinary shares for a period of three years at a strike price of 0.04p per share.

“Signing the Rig contract is a significant step forward in the development of our Cameroon assets and moves us toward spudding the NJOM-3 well in 2024. The Norve Rig was chosen both for its high specification and its anticipated window of availability.

“Our next steps will be to finalise the documentation of the Thali license extension with the Ministry of Mines, Industry and Technological Development (“MINMIDT”), and to move our farm-out discussions with multiple parties towards a conclusion, we hope during the first quarter of 2024. As we have explained in the past, our plan is to fund the well primarily with asset-level financing, and we still believe that is realistic.

“While we finalise the farm-out discussions, we have chosen to raise a small amount of capital of which I am investing £80,000. We envisage that the majority of the remaining well cost will come from asset-level financing. I have chosen to participate in this fundraising myself, as I have in several of our previous recent fundraisings, reflecting my personal commitment to this project and my confidence in its success,” Tower Resources Chairman & CEO, Jeremy Asher, said.