UK-based Tower Resources (Tower) has signed the shallow water Thali production sharing contract (PSC) offshore Cameroon
The terms of the PSC include three exploration phases, including the minimum work commitment of the initial exploration period of three years which consists of geological and geophysical studies, 3D seismic acquisition for 100 sqkm and a commitment well with a minimum financial commitment of US$13mn.
The PSC also includes the option of two renewal periods of two years each, both of which consists of one exploration or appraisal well with a minimum financial commitment of US$15mn in each renewal period. Tower has the option of relinquishing the PSC on completion of each period, given that the minimum work commitment has been met.
Tower’s signing of the Thali PSC is a low cost entry for the company into a mature region with low-risk exploration/appraisal targets and the potential for significant upside. Tower has 100 per cent interest in the Thali PSC which covers an area of 119.2 sqkm, with water depths ranging from eight to 48 metres in the eastern part of the Niger Delta.
The initial priority for Tower is the acquisition of 3D seismic data in the first half of 2016. The data will be used to update the existing 24-year old data set to allow better resolution of shallow plays as well as imaging of deeper sections. The company expects to start drilling in 2017 or 2018. Tower will seek a partner to share the financial commitment and for additional technical support.
Graeme Thomson, CEO of Tower, said, “Our entry into Cameroon marks a shift in our risk profile from frontier to proven basins and introduces an asset with existing discoveries into the Tower portfolio. The Thali block provides Tower with lower risk exploration and appraisal potential in this shallow-water proven-producing region and provides a base from which the company can expand its portfolio in Cameroon.”
