Tower Reports Progress on Uganda, Namibia Activities
Tower Resources plc, the independent oil and gas exploration company with exploration licenses in Uganda and Namibia, said that it is moving forward with operational planning in Uganda and detailed technical evaluation work for Namibia. These assets were acquired by Tower in a merger with Neptune Petroleum Limited approved by shareholders on 16 January, 2006.
In Uganda, a Land Satellite Imaging survey and a geological field survey are currently underway to investigate the presence or otherwise of surface oil seeps. The presence of seeps would confirm that oil has been generated under Block 5; however the lack of seeps would not significantly reduce the prospectivity of the License. A contract has been signed with IMC Geophysical International Limited under which they will acquire 250 kilometers of seismic data. This operation is estimated to begin in July. The intention is to complete the interpretation of this data and to begin drilling a well early in 2008, planning for which will begin soon.
Other operators in Licenses to the south of Block 5 have continued to have success. Tullow, now 100% owner of Block 2, has confirmed two discoveries and Heritage, Block 3A, has encountered productive oil reservoirs at two depth levels in Kingfisher-1. The latter well is still drilling to evaluate a large structure in the deeper area of their basin. Tullow, northern Block 2, and Heritage, Block 1, both have plans to extend their seismic coverage towards the southern boundary of Block 5. Tullow have announced plans for a significant exploration and appraisal well program in Block 2, including wells in the north of the License. These programs, when added to Tower's own activities, will amount to a significant assessment of the potential of the Albertine Graben. This will increase the likelihood of proving up sufficient oil reserves to support a pipeline from the operational areas. It also means that there will be regular news flow, throughout 2007, as exploration in Uganda proceeds.
In Namibia, a geochemical study to assess source rock maturity and a sea surface oil seeps survey by satellite imaging, were completed. The geochemical assessment has confirmed that three out of four potential source rocks are likely to be mature with significant areas at peak maturity. The seep study has indicated the possible presence of natural liquid hydrocarbons slicks at surface, to the south and east of the Dolphin Graben (the deepest sedimentary sequence in the License). It was decided to investigate specific aspects of interest arising from the initial evaluation program in more detail by undertaking reprocessing and AVO analysis of six selected seismic lines. This detailed assessment was designed to improve the interpretation of gas indications in prospective structures. These analyses have highlighted the potential for commercial gas reserves in the northern part of the License, particularly in a very large structure to the west of, but adjacent to the deepest "kitchen" area of the Dolphin Graben. The immediate exploration program, including a 2-D seismic survey later this year, will be directed at investigating the potential of this structure.
Placing of new ordinary shares
The Company also announced that it has raised £500,000 through the issue of 25,000,000 new ordinary shares ("Placing Shares") to an existing institutional shareholder at a price of 2p per ordinary share.
This follows on from the issue of new ordinary shares at the same price, to Agile Energy Limited, which was first announced to the market on 21 December 2006. The funds will be used for the development of its existing oil and gas assets, the expansion of its oil and gas portfolio and for general working capital purposes.
Application has been made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence at 8.00 a.m. on 13 February 2007. Following the admission of the Placing Shares the total number of voting rights in the Company will be 458,333,333. Tower does not hold any ordinary shares in Treasury.
The above figure (458,333,333) may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Tower under the FSA's Disclosure and Transparency Rules.
Tower Resources Executive Chairman, Peter Kingston, said:
"We have made distinct progress in evaluating the potential of our exploration
acreage in Uganda and Namibia during 2006. In 2007, we anticipate undertaking 2D
seismic surveys in particular areas of interest with a view to be drilling in
Uganda in 2008. Further updates will be provided at regular intervals as
material progress is made in both operations."
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