Oil and gas company Tower Resources has made ordinary shares placing in an effort to raise £500,000 ($656,465) to provide working capital until the completion of its farm-out of the Thali PSC located offshore Cameroon.
Tower said on Monday that it was placing 138,666,666 million ordinary shares to raise gross proceeds totaling $656,465 for 0.375 pence per share ($0.0048).
Jeremy Asher, Tower’s chairman and CEO, said: “We have carried out this small placing to mitigate the risk of running low on cash as we seek to complete our well financing.
“We have kept the placing small because we do not like issuing shares at our current share price, given the superior economics for our shareholders of farming out on our agreed terms. Nevertheless, we felt that it was prudent to have some cash cushion at this time.”
According to the company, the shares will be admitted to trading on AIM on or around March 12, 2020.
Following the admission of the shares, the company’s enlarged issued share capital will comprise 1,243,271,874 ordinary shares.
As for the farm-out, Tower executed binding heads of terms in respect of a farm-out to OilLR of a 24.5 percent working interest in its Thali PSC in Cameroon earlier this month.
Tower is still in talks with several potential partners for the farm-out of a further 24.5 percent interest in the block ahead of an exploration well planned for June 2020.
If the farm-out goes through, Tower will remain the operator of the Thali PSC under an industry-standard joint operating agreement.
The parties intend to complete the transaction by April 15, 2020, subject to usual confirmatory due diligence and OilLR having provided payments to Tower and into escrow of $7.5 million in total at completion, and Tower having demonstrated that it has funding from its own or other sources for the balance of the $15 million.
Offshore Energy Today Staff
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