Tower Resources plc, the AIM-listed Africa-focussed oil and gas exploration company, has announced the signing of the shallow water Thali (formerly known as Dissoni) Production Sharing Contract (PSC), offshore Cameroon.
The PSC signing ceremony took place on September 15, 2015 at the offices of Société Nationale des Hydrocarbures (SNH) in Yaoundé, Cameroon, in the presence of a delegation which included the Minister of Mines, Industry and Technological Development, His Excellency Emmanuel Bonde, and the Executive General Manager of SNH, Adolphe Moudiki.
Tower’s signature of the Thali PSC represents a low cost entry into a mature region with low-risk exploration/appraisal targets and the potential for significant upside, the company said in a press release issued Wednesday.
Tower has a 100% interest in the Thali PSC, and the terms of the PSC include three exploration phases, including the minimum work commitment of the Initial Exploration Period, outlined below:
– Initial Exploration Period (3 Years): Consisting of geological and geophysical studies, 100km2 of 3D seismic acquisition and a commitment well with a minimum financial commitment of $13 million.
– First Renewal Period (2 Years): Consisting of one exploration or appraisal well with a minimum financial commitment of $15 million.
– Second Renewal Period (2 Years): Consisting of one exploration or appraisal well with a minimum financial commitment of $15 million.
Tower has the option of relinquishing the PSC on completion of each Period on condition that the minimum work commitment has been met.
The Thali PSC covers an area of 119.2 km², with water depths ranging from 8 to 48 metres, and lies in the prolific Rio del Rey basin, in the eastern part of the Niger Delta. The Rio del Rey basin has, to date, produced over one billion barrels of oil and has estimated remaining reserves of 1.2 billion boe, primarily within depths of less than 2,000 metres. The Rio del Rey is a sub-basin of the Niger Delta, an area in which over 34.5 billion barrels of oil has been discovered, with 2.5 billion boe attributed to the Cameroonian section.
According to Tower, the Thali Block has the potential to hold up to four distinct play systems, including the established play in which three discovery wells, two gas (Rumpi-1, Njonji-2) and one oil (Njonji-1), have already been drilled on the Block. There are 7 million barrels of oil already discovered on the Block. Tower says that these are currently viewed as sub-commercial discoveries, but once better seismic imaging has been achieved the company sees potential to add incremental oil reserves to achieve commerciality. There is also significant potential to develop prospects at deeper levels, in both structural and stratigraphic traps, once better imaging has been achieved. The existence of infrastructure in adjacent blocks means that the development of a 20 million barrel oil field has the potential to be economically viable at current oil prices.
In the press release, Tower says that its initial priority will be the acquisition of 3D seismic in the first half of 2016. The seismic will be used to update the existing 24 year old data set to allow better resolution of shallow plays as well as imaging of deeper sections. Tower expects to be drilling in 2017/18.
Graeme Thomson, CEO, commented: “We are delighted to be awarded the Thali PSC and look forward to working closely with SNH as we develop the prospectivity of this exciting acreage. Our entry into Cameroon marks a shift in our risk profile from frontier to proven basins and introduces an asset with existing discoveries into the Tower portfolio. The Thali Block provides Tower with lower risk exploration and appraisal potential in this shallow-water proven-producing region and provides a base from which the Company can expand its portfolio in Cameroon.”