Tower Resources Moving Forward With Thali Block Farm-Out

Africa-focused oil and gas firm Tower Resources has finalized and submitted documentation for its proposed farm-out of a share in the Thali offshore block in Cameroon to the country's authorities for approval.

Back in August, Tower Resources agreed to farm out a 49 percent non-operating working interest in its Thali Production Sharing Contract to Beluga Energy Limited.

The farm-out covers $15 million towards the cost of the NJOM-3 well that Tower is planning to drill on the Thali block.

The well cost is currently expected to be approximately $16.8 million, of which approximately $3 million has already been spent. Each party will recover costs actually funded and recoverable under the PSC, pari-passu. Costs in excess of $15 million, and future costs, will be funded pro-rata with respect to Tower's and Beluga's working interests.

Also, Tower Resources in March 2021, received an extension of the first exploration period at its Thali license offshore Cameroon.

Completion of the farm-out is still subject to two conditions – the financing contingency requiring Beluga's shareholders' approval, and the Minister of Mines, Industry and Technological Development (MINMIDT) approval.

"We cannot be sure how long the MINMIDT approval may take as it can be as long as 60 days, but we hope it will come much sooner, allowing us to complete the farm-out sooner. But in the meantime, we are moving forward with contract discussions regarding the rig and services, subject to the MINMIDT approval and conclusion of the farm-out in due course," Chairman and CEO of Tower Resources Jeremy Asher said.

In August, Tower said that it was in talks over a contract for a rig to drill the NJOM-3 well, and also regarding an option agreement over a mobile oil production unit (MOPU) suitable for the Thali project.

Tower is planning to drill the NJOM-3 well to test a discovery previously made by TotalEnergies. The Thali PSC covers an area of 46 square miles, with water depths ranging from 26 to 158 feet, and lies in the prolific Rio del Rey Basin, in the eastern part of the Niger Delta.

To contact the author, email bojan.lepic@rigzone.com