Tower Resources plc (the Company or Tower), the AIM-listed Africa-focused oil and gas exploration company, reported Tuesday the completion of its farm-in to Block 2B, onshore Kenya.
On April 9, the Company announced that Tower Resources (Kenya) Limited, a wholly owned subsidiary of Tower, had agreed to acquire a 15 percent interest in Block 2B, Kenya, from Lion Petroleum Corp., a wholly owned subsidiary of Taipan Resources Inc. (Taipan), who hold 45 percent of the license. Completion was conditional on consent from Premier Oil group, who hold 55 percent of the license, which was received last week and also subject to the payment of $4.5 million cash and the admission on the AIM market of the first tranche of 4.5 million Ordinary Shares in Tower, both of which occurred on Monday June 2.
In total consideration for the farm-in, Lion Petroleum Corp. receive $4.5 million cash and a total of 9.0 million Ordinary Shares in Tower, of which the second tranche, consisting of 4.5 million shares, will be received in three months' time. There is also a contingent payment of $1 million cash on the spudding of a second well.
In February 2014, Taipan announced a 51-101 compliant independent assessment of Block 2B, completed by Sproule International Limited, which estimated Block 2B, located in the Anza Basin, to hold gross mean unrisked prospective resources of 1,593 million barrels of oil equivalent (MMboe), based on 19 exploration leads.
Activity in the Anza Basin has also increased recently. In Block 9, adjacent to Block 2B, Africa Oil Corp. and its partner, Marathon Oil Corporation, are currently drilling the Sala-1 exploration well which will test a large prospect in the Cretaceous Anza rift system. The results of the Sala-1 well are expected this month and the well is targeting gross risked (best estimate) prospective resources of 402 MMboe (Africa Oil Corp. Corporate Presentation, May 2014).
The recently acquired 2D seismic data across Block 2B is being used to determine the drilling location of the first potentially play-opening well, Badada-1, which is expected to spud at the end of 2014/early 2015 and will target gross mean unrisked prospective resources of 251 MMboe (Sproule International Limited, February 2014).
Graeme Thomson, CEO, stated: "We are extremely pleased to conclude this exciting farm-in to Kenya at a time when it is opening up as an oil province. The farm-in perfectly fits our strategy of securing material positions in very high upside exploration assets coupled with near-term drilling which offers the potential to materially add-value for shareholders. This license is right at the forefront of new plays and we look forward to drilling in the coming months."
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