Africa-focused oil firm Tower Resources has agreed to purchase an additional 5% interest in the PEL96 license offshore Namibia from its local partner, ZM Fourteen Investment.
The AIM-listed company will acquire additional share through its wholly-owned subsidiary Tower Resources (Namibia) Limited, representing half of ZM’s current 10% interest in the license, for a cash consideration on completion of $375,000.
ZM's remaining 5% interest in the PEL96 license will be fully carried through to production, as is the 10% interest held by the National Petroleum Corporation of Namibia (NAMCOR).
Tower Resources has already funded all of the expenses associated with ZM's interest to date, so no further reimbursement of past costs is due to ZM.
Completion of the purchase is subject to usual conditions precedent, identical to those in the farm-out agreement that TRNL concluded with Prime Global Energies in January 2025, including Namibian government approvals and consent of the other partners in the PEL96 license, and the two transactions are expected to complete at or about the same time, as both are subject to similar government consents.
ZM has also confirmed its consent to the Tower Resources-Prime farm-out agreement. Tower expects to fund this acquisition on behalf of its subsidiary using a portion of the substantial amount of cash it is due to receive from the Prime farm-out completion.
Following completion of this purchase from ZM, and the farm-out of a 25% interest in the license to Prime, Tower Resources (Namibia) Limited will be the operator with 60% working interest, with Prime holding 25%, NAMCOR 10%, and ZM 5%.
Tower still anticipates that the completion of the Prime farm-out agreement may occur before the end of March, but as previously explained, this depends on the approval processes which involve several counterparties.
"We are pleased with the progress we are making and also with the acquisition of this small additional interest in the Namibian PEL96 from our local partner ZM. This acquisition reflects our wish for ZM to move to a more sustainable fully-carried position, and also reflects our faith in the value of the PEL96 license at the same time that we are bringing in a new partner to manage risk and share funding obligations.
"We are already working hard on the well planning in Cameroon, as we are confident about the approval process, and want to ensure we are ready to drill the NJOM-3 well in good time. Forward planning usually improves both time and budget performance. I look forward to keeping you updated with our further progress,” said Jeremy Asher, Tower Resources Chairman & CEO.
