Proactive Investors - Tower Resources PLC (LON:TOWR) told investors that it is “currently at a very advanced stage of negotiations” for a rig contract for the NJOM-3 well in Cameroon and expects it will be concluded soon.
“The rig contract is the critical next step in finalising the timing of the well, and so everything else depends on it and naturally follows it,” Tower chief executive Jeremy Asher said in the company’s interim results statement.
“The rig contract will still leave a wide operational tolerance for the well spud date, based on the timing of the current operations which the rig is undertaking, but it will be a firm commitment between the rig owner and the company.
“We are working with the Ministry of Mines, Industry and Technological Development on documenting the promised license extension to reflect the rig contract and especially the operational tolerances that it will contain.
“We expect the rig contract to be conditional on the formal documentation of the license extension, and although it is no longer feasible to spud the well in 2023, we are still hoping to be able to spud the well in the first half of 2024.”
In terms of the financial results, the pre-revenue exploration company had just shy of US$1 million of cash at the end of June and it is advancing a farm-out process in order to fund its share of costs for the NJOM-3 operations.
The explorer reported a US$530,000 loss before tax for the six-month period.
Asher added: “Our objective is still to farm out a minority share of the license interest, which should provide most or all of the remaining funding required for the well.
“The funding requirement was most recently estimated at US$13.4 million, though this estimate is always subject to change.
“We are discussing this with multiple parties, and one discussion is now at a very advanced stage.
“Any funding agreement will likely depend on the rig contract and the license extension documentation being completed.
“We are also still discussing credit facilities with the local Cameroon banks, although the difficulties of reconciling their requirements with a farm-out type of funding agreement have led us to prioritise the farm-out discussions over the bank discussions for the time being.”