Tower Resources nears first Namibian well

Oil and gas explorer Tower Resources (TRP) is eyeing up a first well in Namibia by the close of this year, it said.


In Licence 0010, offshore Namibia, interpretation of the 3D seismic is well advanced, with clear structural closure, sustained reservoir thickness and direct hydrocarbon indicators confirmed at the main Maastrichtian prospect level.

Additional potential was also confirmed at the Palaeocene horizon, as well as at two other formations deeper than the Maastrichtian, the AIM-listed company added.

Licence operator Arcadia Petroleum, which is funding Tower for the cost of the first well, is making headway with its programme to put in place funding and to contract a deep water drilling rig with a view to drilling around the end of 2011.

"I am pleased to confirm that the first well in Namibia, to test the huge Delta prospect, remains a target within a year. The 3D seismic interpretation has confirmed the 2D seismic interpretation but has also opened up significant potential from additional reservoirs," said executive chairman Peter Kingston.

Letter of intent

Meanwhile in Uganda, Tower has signed a letter of intent with TESLA-IMC International ahead of a contract for the 2D seismic programme of 150-200 km.

A high-density geochemical survey is also underway over the prospect area together with focused sampling around the two existing wells and an oil-bearing well in EA1, while the environmental impact assessment and early operational planning for a third well has already begun.

Now the political uncertainty with respect to long-term development planning in Uganda appears to have been resolved, a final phase of the farm out programme has been initiated, Tower said.

The company's board has raised the additional equity capital needed for the seismic programme on schedule and a well can still be drilled in October 2011, subject to rig availability. However, if the cost of seismic is subsequently met by a third party, the funds will be deployed on new projects, Tower added.

Peter Bassett, analyst at Westhouse Securities, said: "The company continues to make substantial progress in its 2011 exploration programme.

"We reiterate our 'buy' recommendation on the stock, with a target price of 12.4p."

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