Africa-focused Tower Resources announced Thursday that it expects to spud its Mvule-1 well in Uganda imminently before turning its attention to its "extremely attractive license" in Namibia
The firm also announced that it has raised $9.5 million (GBP 6 million), via a stock placing and issue of equity. The proceeds will be used to redeem a $3.1 million loan provided to finance the drilling and completion of the Mvule-1 well, as well as to provide general working capital requirements over the balance of 2012.
The Mvule-1 well – which is the third and final commitment well on Tower's EA5 license in Uganda in which Tower holds a 100-percent working interest – is testing an estimated recoverable resource potential of 80 million barrels.
"The placing has materially strengthened Tower's financial base and forms part of our prudent preparations for the many opportunities open to the Company in the case of either success or failure for Mvule-1," said Tower Chairman Jeremy Asher.
"Regardless of the well's outcome, we have an extremely attractive license in Namibia where the exploration well being planned for 2013 will be testing five targets aggregating over nine billion barrels of recoverable reserves. Tower's 15-percent interest in that well is fully carried by the operator Arcadia, who are currently in advanced discussions regarding a farm-out, but Tower is also looking at strategic options to increase its Namibian exposure."
Northland Capital Partners, which is an advisor to Tower, said that the strong support for the fund raising is encouraging as the firm moves to imminent spud on the Mvule-1 well. "However, this also attests to the greater prospectivity of the Namibia exploration efforts where drilling is now mooted for 2013," added Northland.
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