5 July 2013
Tower Resources plc
Namibian Update
Giant potential Welwitschia-1 well to spud mid-February 2014 and Operational Update
Tower Resources plc ("Tower" or the "Company"), (TRP.L, TRP LN), the AIM listed Africa focused oil and gas exploration company, is pleased to announce the following update with respect to its Licence 0010 in the Walvis Basin, Offshore Namibia.
The drilling of the Welwitschia-1 well is now planned to commence in mid-February 2014 and a firm rig is in place, drilling location agreed, site survey largely completed and longest lead items are being manufactured.
· Rig approved and spud date: After a competitive process to scour the market for the most suitable rig for this exploration well, the Joint Venture has formally approved the use of the new-build Rowan Renaissance, which Repsol has secured on a 3 year contract for international work. Repsol will take delivery of the rig at the end of December 2013 and it will move directly to Namibia whilst undergoing further trials and crew familiarisation activities. This rig overwhelmingly won on technical, financial and safety considerations and contractual matters within the Joint Venture are now being completed.
· Welwitschia-1 well location: Following the completion of a drilling hazard evaluation by the operator, Repsol, the Welwitschia-1 well location has been selected in order to evaluate primary and secondary target reservoirs in both the Maastrichtian and Aptian-Albian reservoir sequences. It is estimated that the Welwitschia-1 well will be drilled to a total depth of 3,000m TVDSS.
· Site survey: A site survey of the Welwitschia-1 well location has almost been completed by the MV Ocean Endeavour operated by Gardline for geotechnical and oceanographic purposes. The survey consisted of the following components which were all completed satisfactorily and indicated that the seabed conditions at the Welwitschia-1 well location do not present any obstacles to drilling:
- Seafloor bathymetry
- Seabed sampling
- Water sampling
- Technical and HSE quality controls
In addition metocean and surface wave data has been acquired at the well location, final sub-sea data is to be collected and the final report of the site survey is expected in August 2013.
· Long-lead items: Critical components of the well design, including the wellheads, well casings and most tubulars have been ordered or are being secured from suppliers following competitive bids and tendering. Manufacturing is well underway for the longest lead items. It is estimated that these items will be delivered to Walvis Bay in late December 2013 for further testing and onwards transportation to the well site.
· Budgets: The Joint Venture is progressing on track with detailed well planning. The proposed budget for 2013 for the Joint Venture is approximately $27m (Tower share approximately $8.1m), all to be cash called in the second half of the year. Tower currently expects a total gross well and other costs budget of approximately $80m (Tower share $24.0m) plus contingencies.
At 30 June 2013, Tower's cash balance was $2.8m. As was stated in the 2012 annual report, the Company is looking at ways to finance its participation in this giant-potential well and new activities, and this may include a farm-out, asset swap, equity raise or a combination of these initiatives.
Graeme Thomson, CEO, commented "Preparations for the Welwitschia-1 well are progressing at accelerating pace. Based on Tower's updated CPR, the Welwitschia-1 well will target risked prospective resources of 496mmboe net to Towers' 30% interest in Licence 0010 across multiple reservoir horizons. The drilling cost equates to about 5 cents per risked barrel of oil equivalent. Drilling is now scheduled to be starting earlier, in mid-February 2014. We look forward to further updates as we move quickly to drill on this giant prospect".
Tower Resources
Jeremy Asher (Chairman)
Graeme Thomson (CEO)
Andrew Matharu (VP - Corporate Affairs)
+44 20 7253 6639
Peel Hunt LLP
(Nominated Adviser and Joint Broker)
Richard Crichton/Charles Batten
+44 20 7418 8900
GMP Securities Europe LLP (Joint Broker)
Rob Collins/Liz Williamson
+44 20 7647 2800
Vigo Communications
Chris McMahon, Peter Reilly
+44 20 7016 9570 / +44 7793 076 867
