Tower Resources plc, the AIM listed Africa focussed oil and gas exploration company, is pleased to announce the acquisition of a 20% carried interest in Marovoay Block-2102, onshore Madagascar. The acquisition is being effected through the acquisition of Wilton Petroleum Limited ("Wilton Petroleum"), a private UK registered exploration company.
Wilton Petroleum's sole asset is a 20% carried interest in Marovoay Block-2102, onshore Madagascar, in the Majunga Basin, which is operated by Ophir Energy plc through its subsidiary Ophir Madagascar Limited ("Ophir Energy", 80%). Block-2102 covers an area of 8,444 km2 and possesses prospectivity across multiple play types within the Jurassic and Cretaceous age sequences. The first exploration well in Block-2102 is due to be drilled by mid-2014. It will target the Anjohibe prospect with mean prospective resources of c. 90mmbbls* of what is expected to be light volatile oil in Jurassic and Cretaceous plays. These are the onshore equivalent of the deep-water plays being explored by ExxonMobil in the Ampasindava Block to the north. This is one of over 20 prospects identified on the block.
Wilton Petroleum's 20% interest in Block-2102 is carried for up to two exploration wells by Ophir Energy, with each well carry capped at a net value of US$4 million.
Tower is acquiring the entire share capital of Wilton Petroleum for an initial consideration of US$1.75 million in cash and 120 million ordinary shares in Tower, equivalent to approximately 7% of Tower's issued share capital post completion. At yesterday's closing share price of 1.6p per Tower share this values Wilton Petroleum at US$4.7 million compared to the cash value of the first well carry of US$4 million. The consideration shares are subject to a 12 month lock-in period. Tower will also make a deferred additional payment to Wilton Petroleum's shareholders of US$4 million, to be paid in cash, Tower shares or a combination of both at Tower's discretion, on the spudding of the second carried well on Block-2102. The deferred consideration is equivalent to the cash value of the second carry and will only be payable if the operator drills a second well.
The completion of the acquisition is subject to the transfer of the beneficial ownership of Wilton Petroleum's interests in Block-2102 to Tower being approved by the Madagascan Office des Mines Nationales et des Industries Stratégiques(OMNIS). Completion is also subject to the Company raising a minimum of £4million from the equity markets by 31 August 2013.
Commenting on the acquisition Graeme Thomson, CEO, stated "The acquisition of Wilton Petroleum marks a new country entry for Tower and the first transaction with the recently appointed management team who all have prior experience of exploration in Madagascar. It provides evidence that our new ventures team will originate and execute shrewd deals as we seek to diversify our portfolio and build a high impact Pan-African explorer around our world class Welwitschia prospect in Namibia".
Tower's Chairman, Jeremy Asher, added: "It has long been recognised that the NW margin of Madagascar contains very rich Jurassic source rocks, and we believe that this block is the best onshore location to test that play. We believe that the well in 2014 will be one of up to three wells to be drilled onshore Madagascar in the coming year. This could mark a significant up-turn in the industry view of the area and we are in good company with the likes of Afren, Tullow, Exxon as other licence holders ".
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