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Tower Resources Provides Update on Uganda Operations

Source: www.gulfoilandgas.com 2/11/2011, Location: Africa

Tower Resources PLC, the oil and gas exploration company with interests in sub-Saharan Africa, principally in Namibia and Uganda, is pleased to provide an update to shareholders on its current operations in Uganda, managed by wholly-owned subsidiary Neptune Petroleum (Uganda) Limited.

In December 2010, following interpretation studies of the aero gravity gradiometry survey (GGI) and further detailed analyses of all well data, Tower announced an operational update which highlighted the following important conclusions:

The probable existence of an active oil generation kitchen is confirmed, which may explain the widespread presence of near mature oil encountered as micro seeps close to surface and as trace amounts in the water samples picked in the two wells
The GGI has also identified an apparently closed structural feature having an area greater than 100 square kilometres, in a location where basin modelling projects that good quality reservoir should be present
The limited sections of existing seismic coverage over this structure show that the prospective reservoir interval maintains its thickness over the structure, in contrast with the setting of the recent wells, both of which were drilled where the reservoir interval was thinning on to the structurally high points of the prospects.

The final GGI interpretation report has been issued and these conclusions have been confirmed. The Tower Board believes that the apparent volume and depth of "kitchen" are sufficient to generate enough oil to fill a commercial-sized trap and that the new target area is sufficiently large and well defined to contain recoverable resource potential of more than 100 million bbls.

A seismic programme of 150-200 kms is being planned with targeted timing of an April 2011 start and duration of about one month. All government consents have been received to proceed with the seismic programme and the process of appointing a seismic contractor is underway. A final phase of the farm out programme is continuing and new interest has been generated as a consequence of the updated basin interpretation. Uncertainty still remains concerning the timing of the Ugandan Government's sanction of a future regional development programme and the Tower Board believes that there may therefore be a delay before a potential farm in party will commit to funding Tower's outstanding Licence commitments. The Tower Board is therefore raising the additional equity capital required to undertake the seismic programme on schedule so that a well can still be drilled in September or October 2011. If the cost of seismic is subsequently met by a third party, the funds will be deployed on new projects.

The placing of 90 million new shares at a price of 4.75p per share to raise gross proceeds of 4,275,000 from private and some significant new institutional investors has been announced separately at the same time as this announcement.

Peter Kingston, Executive Chairman of Tower, commented: "I am pleased that the final commitment well in Uganda will test a good prospect which could yield material value to shareholders if successful."

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Related Categories: Formation Evaluation  General  Geological, Geophysical  Geophysical Contractors  Mud Logging  Reservoir Engineering & Recovery Methods  Seismic survey  Well Completion, Logging, Workover 

Related Articles: Formation Evaluation  General  Geological, Geophysical  Geophysical Contractors  Mud Logging  Reservoir Engineering & Recovery Methods  Seismic survey  Well Completion, Logging, Workover 


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