3rd Sep 2014 09:01
LONDON (Alliance News) - Tower Resources PLC posted a massive increase in its pretax loss for the half-year on Wednesday, hit by impairment charges on its Namibia assets as the group shifts its focus to the Kenya.
Tower said its pretax loss in the first half to June 30 hit USD49.1 million, compared to a loss of USD2.5 million last year, as the group took a USD41.5 million hit from the Welwitschia-1A well in Namibia.
In June, shares in Tower plummeted after it said it had failed to find hydrocarbons at the site and said it would abandon drilling activities owing the spiralling costs. That news saw it shares drop more than half their value.
Tower shares were down 2.5% to 0.756 pence on Wednesday. The stock has ranged between 0.70p and 7.25p over the past 52 weeks.
Tower said there remains a dispute as to whether the remaining costs related to the Welwitschia-1A well should be settled by the operator, Spanish energy group Repsol YPF SA, and not passed onto the joint venture partners. The company said it would provide a further update on the dispute in due course.
Elsewhere, Tower said Lion Petroleum Inc, the operator on the Badada prospect in Kenya, in which Tower has acquired a 15% interest, expects the Badada-1 well to be spud towards the end of 2014 or early 2015. It said its optimism for the project has been increased by the positive results reported by Africa Oil Corp and Marathon Oil Corp on the Sala 1 well, located 60 kilometres from the Badada prospect.
In South Africa, the group said it does not expect to be in a position to drill the first well in the Algoa-Gamtoos licence until mid to late 2016, later than its previous guidance for drilling to start in the fourth quarter of 2015.
By Sam Unsted; [email protected]; @SamUAtAlliance
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