Tower Resources has concluded its detailed evaluation of information from the Iti-1 well. Analyses and interpretations have been carried out by independent experts and specialists using relevant laboratories in the UK. The overall findings of the re-evaluation is that the Iti-1 well found 15-20 meters of clean reservoir sands, with significant potential to contain oil just above basement between 540 and 575 meters. This conclusion would need to be verified by a well test, and given the high cost of re-entering the existing well it is likely that the company will instead drill another well on the Iti structure at a later date. However, the company's first priority, and commitment under its work program, is to drill a second exploration well, and the company is still considering the best location for this second well in light of the information that the Iti-1 well has provided. The company hopes, subject to Government approval, to drill this second well in early 2010, with a target of February.
The following provides a summary of conclusions drawn to date from the re-assessment:
Detailed discussions with the Government of Uganda have commenced to jointly agree the significance of these updated results. The immediate work program will focus on evaluating prospective well locations and planning for drilling a second exploration well early in 2010. A further update will be provided to shareholders once a firm forward program has been agreed with the Government of Uganda, hopefully in the second half of October. A follow up well on the Iti structure will be considered in due course to confirm a working hydrocarbon system within the structure.
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