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Tower targets Namibian well funding
By Darshini Shah | Fri, 5th July 2013 - 10:05
Tower Resources (TRP) has confirmed it is looking at ways to finance its participation in the Welwitschia-1 well in Namibia, including a farm-out, asset swap, equity raising or a combination of these initiatives.
Situated in Licence 0010 in the Walvis Basin, offshore Namibia, Welwitschia-1 will target risked prospective resources of 496 million barrels of oil equivalent net to Tower's 30% interest in the licence.
It is estimated that the well will be drilled to a total depth of 3,000 metres true vertical depth subsea. The commencement of drilling is planned for mid-February 2014.
Tower expected a total gross well and other costs budget of approximately $80 million (£53 million), of which the AIM-listed explorer's share will be $24 million, plus contingencies. Tower's contribution to the cost of drilling will be approximately $8.1 million, all to be cash called in the second half of the year. The drilling cost equates to about five cents per risked barrel of oil equivalent.
At 30 June, Tower's cash balance was $2.8 million.
"A [share] placing is on the way then!" predicted 'thethirst' on Interactive Investor's Tower discussion board.
But 'SIMBO1' stressed that the fundraising was "hardly a surprise", commenting: "Tower did tell us in 2012. Does not take a brain surgeon to work out that $2.8 million in the bank and $24 million to commit to our side of the drilling is not quite enough cash is it?"
'SuzyBoozy' preferred to see the glass as half-full. "A remarkably candid and honest RNS, makes a nice change from the usual manipulative, misleading guff put out by some companies," the user pointed out.
'Here and now' echoed this view, stating: "I like the way [chief executive Graeme Thomson] communicates. Straight up, no RNS bulkaka, all information provided.
"Excellent update [on Friday]. Funding has always been obvious and so have the potential rewards."
The user added: "So many corporate deals happening around Namibia offshore now... Several of these tiddlers will make serious money when there is a decent strike... just a matter of time and patience."
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