License extension off Cameroon comes while funding talks continue ahead of drilling ops

UK-based oil and gas company Tower Resources has secured a license extension of the first exploration period of a production-sharing contract (PSC) related to an asset offshore Cameroon, which is expected to see drilling activity this year with a recently hired jack-up rig from Borr Drilling. With the license extension out of the way, the ongoing discussions regarding the funding of this drilling program are expected to be wrapped up in due time.

The first exploration period of the Thali PSC has been extended to February 4, 2025. This comes after the president of the Republic of Cameroon approved a further extension of the first exploration period of the Thali license in March 2021. Tower Resources signed an agreement shortly afterward to farm out a 49% non-operating working interest in its Thali PSC to Beluga Energy.

The UK company’s principal obligation during the first exploration period is the drilling of a single well which it intends to fulfil through the drilling of the NJOM-3 well. To this end, Tower Resources contracted Borr Drilling’s Norve jack-up rig in December 2023, which was expected to be available in Cameroon between April and August 2024.

As a result, the firm anticipated that the NJOM-3 well would be spudded in 2Q or possibly 3Q 2024. Previously, the well was scheduled to be drilled in June 2020, however, Tower Resources declared force majeure in March 2020 in respect of the first exploration period on the Thali license due to Covid-19 restrictions.

Currently, the UK player is continuing discussions with several parties regarding asset-level financing for the NJOM-3 well. Borr Drilling’s latest rig update indicates that the Norve jack-up will be able to mobilize to Cameroon between June and August 2024, subject to its existing contractual commitments.

Jeremy Asher, Tower Resources’ Chairman and CEO, commented: “We are delighted to share this news, and grateful to the MINMIDT, the Societe Nationale de Hydrocarbures, and the Prime Minister and President of the Republic of Cameroon, for their continuing support.

“We remain confident in finalizing asset-level financing for the well, for which this extension was a critical condition precedent. However, we cannot comment further on the commercial discussions in progress until firm agreements are reached.”

The Thali PSC covers an area of 119.2 km2, with water depths ranging from 8 to 48 meters, in the Rio del Rey basin, in the eastern part of the Niger Delta. Tower Resources also recently undertook a basin and thermal maturity study within its operated license PEL 96 in Namibia, enhancing its understanding of the license’s hydrocarbon prospectivity.

“We are also continuing our work on the evaluation and prioritization of leads and prospects on our Namibian license in light of the basin modeling work we recently completed, and we have been discussing the next steps on our South African Algoa-Gamtoos license with our joint venture partner and operator, NewAge,” added Asher.

Through its wholly-owned subsidiary, Rift Petroleum Limited, Tower Resources holds a 50% interest in the Algoa-Gamtoos licence, offshore South Africa. This license, which covers 9,369 km2, is operated by New Age Energy Algoa.

The license straddles the Algoa and Gamtoos basins on the shelf, and the outboard slope edge of the South Outeniqua Basin, where TotalEnergies made its Brulpadda and Luiperd discoveries in its blocks 11B/12B, which are adjacent to Algoa-Gamtoos to the west.