Tower Resources signs farm-in deal with Taipan Resources for Kenya’s onshore block

oil kenya-rsvstks sxc.huBlock 2B is estimated to hold gross mean unrisked prospective resources of 1,593mmboe. (Image source: rsvstks/sxc.hu)Tower Resources, AIM-listed Africa-focused oil and gas exploration company, has signed a farm-in agreement for Block 2B located in Anza Basin onshore Kenya

The company said that Tower Resources (Kenya) Limited, a wholly-owned subsidiary, will acquire a 15 per cent interest in the block from Lion Petroleum Corporation, a wholly-owned subsidiary of Taipan Resources, holding 45 per cent of the license.

Lion Petroleum Corporation has received US$4.5mn cash and a total of nine million ordinary shares in Tower Resources, the company said.

In February 2014, Taipan Resources had announced a 51-101 compliant independent assessment of Block 2B, which estimated that the block, to hold gross mean unrisked prospective resources of 1,593mn barrels of oil equivalent.

According to Tower Resources, activity in the Anza Basin has also increased recently. In Block 9, adjacent to Block 2B, Africa Oil Corporation and its partner Marathon Oil Corporation are currently drilling the Sala-1 exploration well, which will test a large prospect in the Cretaceous Anza Rift System. The results of the Sala-1 well are expected in June 2014 and the well is targeting gross risked prospective resources of 402mn barrels of oil equivalent.

Graeme Thomson, CEO of Tower Resources, said, “We are extremely pleased to conclude this exciting farm-in to Kenya at a time when it is opening up as an oil province. The farm-in perfectly fits our strategy of securing material positions in very high upside exploration assets coupled with near-term drilling which offers the potential to materially add-value for shareholders. This license is right at the forefront of new plays and we look forward to drilling in the coming months.”

The recently acquired 2D seismic data across Block 2B is currently being used to determine the drilling location of the first potentially play-opening well, Badada-1, which is expected to spud at the end of 2014 or early 2015 and will target gross mean unrisked prospective resources of 251mn barrels of oil equivalent.

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