Tower Resources has, through its subsidiary, Tower Resources (Namibia) Limited, acquired an additional 5% interest in the PEL 96 license offshore Namibia for US$375.000 from its local partner, ZM Fourteen Investment (Pty) Ltd.
PEL 96 is in Blocks 1910A, 1911 and 1912B, covering 23,297 km² of the northern Walvis Basin and Dolphin Graben.
Tower Resources (Namibia) Limited signed a Petroleum Agreement covering an 80% operated interest over the blocks in November 2018 with an initial exploration period of four years.
The mines ministry invited Tower Resources (Namibia) Limited to apply for the First Renewal Period for 2 to 3 years, as announced by the company on 2 August 2024.
The 5% is half of ZM’s current 10% interest in the license.
ZM’s remaining 5% interest will be fully carried through to production.
Tower Resources Namibia Limited’s stake in PEL 96 is now 60% after the company farmed out 25% to Prime Global Energies Limited in January 2025 for US$US$2,5 million.
Namcor has a 10% carried interest.
Tower Resources Namibia Limited has already funded all the expenses associated with ZM’s interest, so no further reimbursement of past costs is due.
Completion of the purchase is subject to usual conditions precedent, identical to those in the farm-out agreement Tower Resources Namibia Limited concluded with Prime Global Energies Limited, including Namibian government approvals and consent of the other partners in the PEL96 license.
The two transactions are expected to be completed at or about the same time, as both are subject to similar government consents.
ZM has also confirmed its consent to the Tower Resources Namibia Limited-Prime farm-out agreement. Tower Resources expects to fund this acquisition on behalf of Tower Resources Namibia Limited using a portion of the substantial cash it is due to receive from the farm-out completion.
The next step in the approval process in Namibia is to provide details of both the Tower Resources Namibia Limited-Prime farm-out agreement and this latest Tower Resources Namibia Limited-ZM agreement to Namcor, to seek Namcor’s consent to both transactions, after which the full package of documents and consents will be forwarded to the Ministry of Mines and Energy for Ministerial approval. However, the Ministry knows both transactions and expects the formal documentation.
Tower still anticipates that the Tower Resources Namibia Limited-Prime farm-out agreement may be completed before the end of March.
Still, as previously explained, this depends on the approval processes, which involve several counterparties.
However, the company remains confident that the approvals will be provided, and that both the TRNL-Prime transaction and this latest Tower Resources Namibia Limited-ZM transaction will be completed as anticipated in the company’s announcement on 10 January 2025.
Tower Resources CEO Jeremy Asher says the acquisition of this small additional interest in the Namibian PEL96 from our local partner ZM.
Asher adds that this acquisition reflects their wish for ZM to move to a more sustainable fully-carried position, and also reflects faith in the value of the PEL96 license at the same time that we are bringing in a new partner to manage risk and share funding obligations.
“We are already working hard on the well planning in Cameroon, as we are confident about the approval process, and want to ensure we are ready to drill the NJOM-3 well in good time. Forward planning usually improves both time and budget performance. I look forward to keeping you updated with our further progress,” Asher says.
