9th Apr 2014 09:09
LONDON (Alliance News) - Tower Resources PLC Wednesday said it will raise GBP19.3 million in a placing and subscription, buy Rift Petroleum Holdings Ltd by issuing the sellers 550 million Tower shares, and has agreed a farm-in to an oil exploration block in Kenya.
In a statement, the company said it will place new shares at 3.5 pence each to raise the GBP19.3 million, money that will mean it is fully funded to drill the Welwitschia-1 well in Namibia, pay for the ongoing costs of the Rift Petroleum acquisition, fund the Kenya block farm-in, as well as paying for an expected entry into another block offshore Cameroon.
The Africa-focused oil and gas exploration company's shares were down 32% at 3.7565 pence Wednesday morning, the biggest decline on AIM.
Rift Petroleum is a privately-owned exploration company with interests in two areas offshore South Africa and two early-stage licenses onshore Zambia. The selling shareholder is contributing USD7.4 million in cash before the deal completes to fund the 2D survey work and the acquisition through to interpreting of the 3D survey.
Tower Resources agreed with Taipan Resources to farm-in to a 15% working interest in block 2B in Kenya in return for USD4.5 million in cash, 9 million Tower shares in two tranches, and a USD1.0 million payment dependent on the start of a second well on the block. Taipan currently owns 45% of the block, while Premier Oil owns the rest.
The block offshore Cameroon is the Dissoni block. Tower Resources has been named preferred bidder for the license.
"These transactions, combined with our existing assets in Namibia and Western Sahara, and our ongoing negotiations in Cameroon, Madagascar and elsewhere, will transform Tower into a true Pan-African exploration company," Chief Executive Graeme Thomson said in a statement.
Tower also reported its results for 2013. Its net loss narrowed to USD3.3 million, from the USD11.7 million loss in 2012, as it cut administrative expenses by almost the same amount. The company didn't earn any revenues during the year.
By Steve McGrath; [email protected]; @SteveMcGrath1
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