Farm-out agreement between Tower Resources and Prime gives access to licences in Cameroon and Namibia

UK oil and gas company Tower Resources has taken a major step forward by signing two farm-out agreements with Prime Global Energies. The agreements relate to non-operated minority interests in the Thali licence, offshore Cameroon, and the PEL96 licence, offshore Namibia.

Tower Resources, through its subsidiary Tower Resources Cameroon, has agreed to relinquish a 42.5% non-operated interest in the Thali licence. In exchange, Prime Global Energies will make a cash contribution of $15 million towards the Thali work programme and the drilling of the NJOM-3 well scheduled for 2025.

However, the completion of this well will depend on government approval of the transaction and the extension of the first exploration period, which currently expires on 4 February 2025. The drilling schedule will be influenced by the availability of rigs, as well as the time required to mobilise equipment and personnel.

In Namibia, Prime Global Energies has also signed an agreement to acquire a 25% non-operated interest in the PEL96 project. This initiative reflects the growing recognition by industrial partners of the promising potential of this licence.

Under these agreements, Tower Resources will receive additional payments, including:
- 937,500 in cash immediately ;
- An additional $3.4 million at the end of the two leasing agreements;
- A total of $4.4 million in cash.

These funds will strengthen the company's financial position and support its work programmes. The agreements are expected to be finalised by the end of the first quarter of 2025, subject to the necessary approvals.

Negotiations have led to adjustments to the Pegasus facility agreement. Tower Resources has reduced the production-based payments originally planned, while maintaining a larger stake in the Thali licence.

In addition, 50% of the cash payments made to Pegasus will be used to subscribe Tower shares, half of which will be blocked for one year.

Jeremy Asher, CEO of Tower Resources, said:

"For our Thali licence, the funding provided should enable Tower to drill the NJOM-3 commitment well, which will mark a significant milestone for the company. While this has been our priority, we have also been working hard to better understand the huge potential of the PEL96 licence in Namibia. These transactions will generate additional liquidity, allowing us to pursue our programmes with greater confidence."

With these strategic agreements, Tower Resources is strengthening its operational and financial capabilities, confirming its ambition to develop promising assets in Africa. The collaboration with Prime Global Energies marks a turning point for the company and paves the way for increased opportunities in the international energy sector.