Tower Resources updates ops in Africa

In December 2010, following interpretation studies of the aero gravity gradiometry survey (GGI) and further detailed analysis of all well data, Tower announced an operational update which highlighted the following important conclusions:

  • The probable existence of an active oil generation kitchen is confirmed, which may explain the widespread presence of near mature oil encountered as micro seeps close to surface and as trace amounts in the water samples picked in the two wells
  • The GGI has also identified an apparently closed structural feature having an area greater than 100 square kilometres, in a location where basin modeling projects that good quality reservoir should be present

The limited sections of existing seismic coverage over this structure show that the prospective reservoir interval maintains its thickness over the structure, in contrast with the setting of the recent wells, both of which were drilled where the reservoir interval was thinning on to the structurally high points of the prospects.

The final GGI interpretation report has been issued and these conclusions have been confirmed. The Tower Board believes that the apparent volume and depth of "kitchen" are sufficient to generate enough oil to fill a commercial-sized trap and that the new target area is sufficiently large and well defined to contain recoverable resource potential of more than 100 million bbls.

A seismic programme of 150-200 kms is now being planned with targeted timing of an April 2011 start and duration of about one month. All government consents have been received to proceed with the seismic programme and the process of appointing a seismic contractor is underway. A final phase of the farm out programme is continuing and new interest has been generated as a consequence of the updated basin interpretation. Uncertainty still remains concerning the timing of the Ugandan Government's sanction of a future regional development programme and the Tower Board believes that there may therefore be a delay before a potential farm in party will commit to funding Tower's outstanding License commitments. The Tower Board is therefore raising the additional equity capital required to undertake the seismic programme on schedule so that a well can still be drilled in September or October 2011. If the cost of seismic is subsequently met by a third party, the funds will be deployed on new projects.

Peter Kingston, Executive Chairman of Tower, commented, "I am delighted that a first well in Namibia, to test the huge potential of the Delta prospect, is now a target for this year. I am also pleased that the final commitment well in Uganda will test a good prospect which could yield material value to shareholders if successful."

 

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

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