Tower Resources set to farm into Kenya block

Drilling rig09 April 2014, News Wires – AIM-listed Tower Resources is set to farm in to a block in Kenya, while also completing a proposed takeover of an African player.

The Africa-focused player has also announced a £19.3 million (US$32 million) placement and subscription to raise money to fund the company’s expansion.

Tower is set to takeover Rift Petroleum, a company with interest offshore South Africa and onshore Zambia.

The proposed acquisition will be carried out in exchange for the issuance of 550 million ordinary shares in Tower.

Rift is a privately owned project with exposure to two highly prospective areas offshore South Africa and two early stage licences in onshore Zambia.

The deal also provides the “provides only significant AIM exposure to emerging E&P region offshore South Africa with 50% interest in Algoa-Gamtoos”, according to the company.

Tower also farmed into Block 2B in Kenya through an agreement with Taipan Resources. The company will gain a 15% interest in the farm.

Premier Oil farmed into the block in December 2013 and now holds a 55% interest.

Tower paid $4.5 million in cash and 9 million Tower shares in two tranches to Taipan as well as a $1 million payment on the spudding of a second well.

The drilling of the Badada-1 well is expected for the fourth quarter.

The company has also been named as preferred bidder in respect of the Dissoni Block offshore Cameroon.

Tower said these developments would be “transformational transactions will create a diversified African portfolio with material activity and anticipated news flow in the coming months and years.”


– Upstream

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