7th Mar 2016 12:16
LONDON (Alliance News) - Tower Resources PLC shares dropped on Monday after it said it plans to capitalise on the current environment within the oil and gas industry by strengthening its asset base after reporting a substantially narrowed loss during 2015.
Tower shares were down 10.4% to 0.0717 pence per share on Monday.
The Africa-focused company reported a pretax loss of USD9.8 million in 2015, substantially narrower than the USD56.6 million loss reported in 2014.
That was because Tower only booked impairments totalling USD4.1 million in 2015 compared to USD50.6 million last year. Whilst the company's administrative expenses rose in the year, its pre-licence expenditure dropped and offset that rise.
"Tower wants to use this period of low acquisition and entry costs to further strengthen our asset base by assembling a larger but still focused portfolio of low risk exploration and appraisal opportunities in proven and emerging basins," said the company.
"We continue to seek sizable working interests, ideally as operator, which allows us to determine the precise nature, cost and timing of our activity," Tower added. "Our focus is currently on western and southern Africa. Our criteria for new activity and investment are strict: we need to envisage returns of many multiples of our investment within the medium-term, as we do with Thali."
Tower operates and wholly owns the Thali licence in Cameroon and other assets in Zambia and also holds a stake in assets within Namibia. Tower said it intends to keep near-term commitments and costs low, and to finance the higher cost activities through farm-outs to larger companies where and when appropriate.
Capital expenditure moving forward will be primarily on conducting further seismic work on Thali, together with any farm-out we may agree, and the number of "additional compelling investment opportunities we find in the coming year."
"It is possible that we may need no more cash from the market this year, and if we do it will be for specific, value-creating purposes, for which we will seek shareholder support at the time," said Tower.
Tower has proposed to restructure and consolidate its share capital at its next annual general meeting, whereby it will issue one share for each 250 shares currently held in the company. Tower said the directors, consultants and staff who own over 15% of the issued share capital have said they will vote in favour of that resolution.
The Founder of Tower, Peter Blakey, will also retire at the AGM.
By Joshua Warner; [email protected]; @JoshAlliance
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