“The possible easing of pandemic restrictions globally…provides a more favourable market environment
Jeremy Asher, chairman and chief executive
What it does
How it’s doing
In March, the company said it has extended its US$750,000 loan facility, provided by shareholder Pegasus Petroleum (beneficially owned by chairman Jeremy Asher).
The loan facility, originally envisaged as a bridging facility in April 2019, has now been extended through to the end of November 2021.
The company also noted that its independent directors believe it is in the company’s best interest not to repay nor to convert the facility now given the potential additional dilution it may create, although it added that it aims to repay the facility by mid-July.
The extension of the facility followed news in February that Tower’s partner in the Algoa-Gamtoos license, offshore South Africa, had provided a new prospective resource estimate which details the potential for some 5.27bn barrels of oil to be present.
The company highlighted that the new estimates are triggered by the reprocessing of 4,500 kilometres of 2D seismic data which improved the image quality, improved confidence, and identified new targets. Altogether, the new estimates have increased prospective resources by 54% at the site.
The results followed an announcement in December 2020 that the company had agreed with its joint venture partner at Algoa-Gamtoos, New Age Energy, to advance the project to a second exploration period under the licence which will run for a two-year period and includes the obligation to shoot 300 square kilometres of 3D seismic data.
Meanwhile, the firm raised £1.25mln via a share placing in Janaury that was used to terminate and repay a US$500,000 loan facility with Shard Capital. At the same time, the group said it will support maintenance spending in Cameroon – to maintain long lead item inventories ready for the start of drilling on the NJOM-3 well in the Thali license.
What the boss says, chairman and chief executive Jeremy Asher
“The independent directors and I are all committed to getting the NJOM-3 well in Cameroon drilled as soon as circumstances permit.
“The possible easing of pandemic restrictions globally both provides a more favourable market environment, and also means that it is now important we complete current financing discussions for the well.
“We are therefore optimistic that we can get this financing in place by the summer, which would reduce the time required for the extension of the facility, and this is why the independent directors have adopted this extension structure.
“If the NJOM-3 well succeeds as we hope, then we believe that the royalty share agreed provides an appropriate reward to both shareholders and Pegasus.
“We also hope that shareholders will see clearly, in the terms of this extension, the confidence that I have in our ability to deliver the NJOM-3 well and production from Thali in due course.”
- Finance and spudding of NJ0M3 well
- Results from NJ0M3 well
- More news from Algoa-Gamtoos license