Tower Resources has executed a binding heads of agreement (HoA) in respect of a farm-out to Beluga Energy of a 49% non-operating working interest in its Thali Production Sharing Contract (PSC) in Cameroon, conducted through its wholly-owned subsidiary Tower Resources Cameroon S.A (TRCSA)
The farm-out covers US$15mn towards the cost of the NJOM-3 well that Tower is planning to drill on the Thali block.
Beluga will receive a 49% working interest in the PSC, subject to an overriding royalty of 10% for Tower's subsidiary TRCSA on the contractor share of production accruing to Beluga under the PSC.
The well cost is currently expected to be approximately US$16.8mn, of which approximately US$3mn has already been spent.
Tower, through TRCSA, will remain Operator of the Thali PSC under the JOA, and in the event the formal farm-in agreement and approvals cannot be completed in good time then Beluga will instead receive an appropriate share of the Operator's share capital and Tower's intercompany loans to the Operator, subject to a shareholder agreement, in order to reflect the intended farm-in economics and JOA terms.
Tower is presently negotiating a contract for a rig to drill the NJOM-3 well, and will announce when this and other major service contracts in respect of the NJOM-3 well are concluded, though this is not expected to be until after completion of the farm-out agreement. Tower is also in discussions regarding an option agreement over a Mobile Oil Production Unit (MOPU) suitable for the Thali project.
Beluga Energy is a privately-held energy commodity trading house with operations in Africa and the international oil market. Beluga engages in proprietary trading: sourcing crude oil and refined products including LNG, LPG, natural gas condensate, naphtha, gasoline, jet fuel, gas oil, fuel oil and bitumen and their transportation from lower demand to higher demand regions.
Warebibo Soroh, CEO of Beluga, commented, “This investment fits perfectly with our strategy to invest in de-risked upstream assets, and supports the integration of our services from downstream to upstream. Our technical team has extensive experience in developing assets in the Gulf of Guinea and will collaborate with Tower in bringing the Thali block to first oil.”
Jeremy Asher, Tower's chairman and CEO, added, “Short-cycle oil and gas development projects such as this have excellent economics, which reflect their importance to Africa's overall energy balance. The Njonji structure on which we are drilling the NJOM-3 well is one of several attractive structures on the Thali block, and we are looking forward to a great future developing these resources together.”
