Tower Resources Acquires Neptune Petroleum
Tower has entered a deal to acquire oil and gas exploration interests in Namibia and Uganda. The Company will acquire the interests through the purchase of Neptune Petroleum Limited in a transaction that will constitute a reverse takeover within the meaning of the AIM Rules.
The total consideration for the acquisition of Neptune will be £4,000,000 to be satisfied by the issue of 200,000,000 fully paid ordinary shares at an agreed value of 2 pence per share. The terms of the agreement are summarised below.
Tower Resources director, Russell Langusch, said "This is an excellent opportunity for the Company to acquire 100% of two frontier oil and gas plays. This is particularly so in an environment of high oil prices, robust exploration activity and significant competition for quality African exploration ground. These two acquisitions enable the Company to position itself as an African focused offshore and onshore oil and gas explorer."
Neptune's wholly owned subsidiary, Neptune Petroleum (Namibia) Limited, has applied for a petroleum exploration license relating to Blocks 1910A, 1911 and 2011A in the Republic of Namibia and is negotiating a Petroleum Agreement with The Government of the Republic of Namibia.
The blocks cover an area of about 19,000 square kilometers offshore Namibia, in water depths ranging from 200 meters to more than 3000 meters. It is believed that the basin or basins covered were formed in response to thermal subsidence following the rifting preceding the separation of Africa from South America.
Very few wells have been drilled in the area, but from the data available two oil prone source rock horizons have been identified, one in the early Aptian and another in the Cenomanian – Turonian. Other source rocks may be present in the syn-rift Lacustrine shales of the Hauterivan and possibly in shales in the pre-rift Karoo section. Good reservoirs have been encountered in the Barremian to Cenomanian and Turonian to Maastrichtian successions.
Reconnaissance grids of modern seismic data are available over all the blocks.
Few wells have been drilled to date but, the presence of oil prone source rocks and good reservoirs and the totally unexplored nature of the deeper water suggests this is an attractive frontier play.
Work Program and Commitments
The Exploration License has a 2-year first exploration period followed by two 2 year successive renewals. The minimum expenditure commitment in the first 2 year period is US $1.15 million.
Neptune's wholly owned subsidiary, Neptune Petroleum (Uganda) Limited, has applied for a petroleum exploration license relating to Contract Area 5 in the Republic of Uganda and is negotiating a Production Sharing Agreement with The Government of the Republic of Uganda.
The area is onshore covering the northern part of the East African Rift Valley. The main objectives are the Tertiary rift sediments which have been found to be oil and gas bearing in the acreage to the south.
Oil seeps have been observed all along the edge of the rift but very few modern wells have been drilled. The area is fairly flat savannah which should make seismic acquisition relatively easy. The fiscal terms in Uganda are attractive and development scenarios will depend on the size of accumulation discovered. The initial program will consist of a study of existing gravity and magnetic data and regional geological studies. The next stage would be to acquire modern seismic data in order to determine the size and number of potentially hydrocarbon-bearing structures. The final stage would be the drilling of wells on the most attractive feature.
The Exploration License has a 2-year Initial Exploration Period followed by two 2 year successive renewals. The minimum expenditure in the first 2-year period is US $0.7 million.
The Company has entered into a conditional sale and purchase agreement with Peter Blakey, Peter Taylor and Bayview Investments LLC whereby it agrees to purchase Neptune Petroleum Limited in consideration of the issue of 200,000,000 fully paid ordinary shares at an agreed value of 2 pence per share.
The agreement is conditional on, amongst other things, Tower obtaining shareholder approval of the transaction; the grant of the exploration licenses in each of Namibia and Uganda and the receipt of confirmation from The Panel on Takeovers and Mergers that the City Code on Takeovers and Mergers does not apply to the Company or, if required, the completion of a "whitewash" procedure under Rule 9 of the Code.
Upon completion of the agreement, the vendors will be entitled to shares comprising 61.5% of the total issued capital of the Company.
The acquisition will be a reverse takeover within the meaning of the AIM rules and, accordingly, the Company has requested trading in its shares on AIM to be suspended pending publication of an AIM admission document.
- Africa-Focused Energy Companies Prioritize Cost Savings (Mar 07)
- Tower Pulls Out of South Africa Project (Feb 16)
- Tower Resources Director Retires (Feb 05)