Africa: Tower Resources Raises $2 Million for Working Capital

Africa-focused oil and gas company Tower Resources said it has raised £1.5 million (~$2 million) via a placing and subscription of 576,923,077 new ordinary shares of 0.001 pence each at a price of 0.26 pence per share placed, a 29% discount to the closing share price on 13 January 2022.

Novum Securities Limited ("Novum"), acted as sole broker on the Placing. The Company's Chief Executive Officer, Jeremy Asher, has entered into an agreement to subscribe for, in aggregate, 9,615,384 new ordinary shares in the Placing for £25,000.

The company said it would use the net proceeds to advance its portfolio and cover working capital needs in the future.

This includes funding maintenance and planning expenses in Cameroon to keep the inventory of long-term items ready for the start of drilling and testing of the NJOM-3 well, pending completion of leasing, and to make payments and prepayments to contractors.

As a reminder, Tower Resources said in September 2021 that the documentation for its proposed farm-out of a share in the Thali offshore block in Cameroon had been finalized and submitted to the country's authorities for approval.

As reported in August Tower Resources has agreed to farm out a 49% non-operating working interest in its Thali production sharing contract to Beluga Energy Limited. The farm-out covers US$15 million for the cost of the NJOM-3 well that Tower plans to drill on the Thali block.

Back to the proceeds of the investment, they will also be used for the costs of the work program in Namibia (for the PEL 96 permit), where Tower plans to conduct a basin modeling study based on the latest available data from recent drilling in areas adjacent to the PEL96.

In addition, Tower will use a portion of the costs of the cash-for-work program in South Africa (for the Algoa-Gamtoos license operated by 50% partner New Age Energy Algoa (Pty) Ltd, which adjoins Total-operated Blocks 11B/12B) where the license partners are preparing for 3D seismic data acquisition in 2022/23. It will also use the proceeds for general working capital purposes.

"The Placing is conditional, inter alia, on the Placing Shares being admitted to trading on AIM. Application has been made for the Placing Shares to be admitted to trading on AIM and it is expected that admission of the Placing Shares will become effective and dealings will commence at 8.00 a.m. on or about 21 January 2022," Tower said.

The Company has issued a broker's warrant in favour of Novum granting it the right to acquire 7,058,824 ordinary shares for a period of two years at a price of 0.425p per share, representing a premium of 16% over the closing share price on 13 January 2022. .

Jeremy Asher We are working to finalize the Cameroon lease, which both parties want to see completed, and we are also encouraged by recent news reports on the ongoing drilling operations at Graff-1 and Venus. -1X, operated by Shell and TotalEnergies respectively. 

"However, while we await the end of the lease, we must continue to prepare for drilling operations and maintain the current inventory of equipment in a drill-ready state. We also want to continue to move forward in Namibia and South Africa, so we can capitalize on both the improving economics of our acreage positions and other positive news around us. This requires us to raise capital at this time, although we continue to seek to keep equity issuances to a minimum. "