Operations Update

RNS Number : 7763E

Tower Resources PLC

13 April 2011

 



PRESS RELEASE                                                                                                                                                                          

13 April 2011

Tower Resources plc

("Tower" or the "Company")

OPERATIONS UPDATE

Tower Resources plc (AIM:TRP), 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 each country, managed by wholly-owned subsidiaries Neptune Petroleum (Namibia) Limited and Neptune Petroleum (Uganda) Limited.

Namibia

In Licence 0010, offshore Namibia, where Neptune Petroleum (Namibia) Limited has a 15% carried interest, interpretation of the 3-D seismic is well advanced with initial conclusions delivered from all of the specialist consultants. Clear structural closure, sustained reservoir thickness and direct hydrocarbon indicators - AVO anomalies and pock marks - have been confirmed at the main Maastrichtian prospect level. Additional potential is confirmed at the Palaeocene horizon (defined as a lead in the Competent Persons Report (CPR)) but also at two other formations deeper than the Maastrichtian. The very large structural closures are confirmed and, therefore, the indicated additional reservoir horizons substantially increase the resource upside potential.

Arcadia Petroleum Limited, operator of Licence 0010, which is funding Tower for the cost of the first well, is making progress with its programme to put in place funding and to contract a deep water drilling rig with a view to drilling around the end of 2011. At present, there appear to be suitable rigs available during the target period. A CPR is currently being updated with a targeted publication early in June 2011.

Uganda

A letter of intent in advance of a contract for the 2-D seismic programme of 150-200 kms has been signed with TESLA-IMC International Limited and line clearance is expected to begin by late April. Completion is targeted for end June 2011, by which time a well location can be selected. A high density geochemical survey, conducted by GORE Geochemical Surveys, is also underway over the prospect area together with focussed sampling around the two existing wells and an oil-bearing well in EA1. The Environmental Impact Assessment and early operational planning for a third well have begun. Now that the political uncertainty with respect to long term development planning in Uganda appears to have been resolved, a final phase of the farm out programme has been initiated. The Tower Board has raised the additional equity capital required to undertake the seismic programme on schedule and a well can still be drilled in October 2011, subject to rig availability. If the cost of seismic is subsequently met by a third party, the funds will be deployed on new projects.

Peter Kingston, Executive Chairman of Tower Resources, commented: "I am pleased to confirm that the first well in Namibia, to test the huge potential of the Delta prospect, remains a target within a year. The 3-D seismic interpretation has confirmed the 2-D seismic interpretation but has also opened up significant potential from additional reservoirs. I am also pleased that the Uganda seismic and well programme is still on schedule."

For more information on Tower Resources, please visit; www.towerresources.co.uk

In accordance with AIM guidelines, Peter Kingston, who is a petroleum reservoir engineer with over 40 years of experience in technical, executive and advisory roles in the oil exploration and production industry, and is Executive Chairman of the Company, is the qualified person that has reviewed and approved the technical information contained in this announcement. 

Contacts:

Tower Resources plc	www.towerresources.co.uk
Peter Kingston, Chairman Peter Reilly, Investor Relations Manager	07802 804852 07881 920542
Northland Capital Partners Ltd (NOMAD and Joint Broker)
Gavin Burnell / Edward Hutton Charles Vaughan (Broking)	020 7492 4750

About Tower Resources

Tower Resources began trading on AIM under the ticker TRP in August 2005, and bought Neptune Petroleum Limited in January 2006. Through the takeover of Neptune, Tower Resources acquired its licences offshore Namibia and in northern Uganda.

Namibia project

Tower Resources has a 15% non-operated interest in Blocks 1910A, 1911 and 2011A covering an area of approximately 22,000 sq km offshore Namibia, in water depths ranging from 200 to 3,000 metres. Tower's costs are carried by the Operator, Arcadia Petroleum, through the first exploration well.

A 735km 2-D seismic survey was completed in 2007.  Comprehensive processing and interpretation of the 2-D seismic has confirmed that the three giant prospects previously identified (Alpha, Gamma and Delta) are viable exploration targets, having apparent four-way structural closure and strong hydrocarbon indications. The Operator followed the 2007 survey up by purchasing approximately 2,400 kms of available 2-D seismic data from a variety of seismic contractors to broaden the coverage of the AVO interpretation over all prospects.

The Operators view, with which Tower agrees, is that the Alpha, Gamma and Delta structures collectively have the potential to contain up to 10 billion barrels of recoverable reserves. There are other less well defined anticlinal structures and several stratigraphic features that could also be viable prospects. A CPR has confirmed this potential.

Uganda project

Tower Resources' has a 100% interest in Block EA5, which is a 2,941 square kilometres licence area situated at the northern end of the Albertine Graben in northern Uganda.

Following geochemistry field surveys and the acquisition and interpretation of 2D seismic data, the first well on Block EA5, Iti-1, was drilled in 2009. The well showed strong evidence of the presence of oil but favourable reservoir development was not clearly established. A second exploration well, Avivi-1, was drilled in February 2010 but failed to encounter oil. Having integrated the information from the first two exploration wells on EA5, it is the view of the Tower Board that considerable exploration potential still exists in the Licence.

An aero gravity gradiometry (GGI) survey was completed over Block EA5 in June 2010. Interpretation of the high quality GGI data provided a very clear picture of basement structures and points to a focused seismic survey targeted at the newly defined structural high and its surrounding area. A 2D seismic acquisition programme of 150-200 kms is expected to be completed at the end of June ahead of deciding the location of the next exploration well. A well could be drilled in Q4 2011 subject to rig availability.

Global Petroleum Limited funded most of the cost of Iti-1, thereby earning an option to take a 25% EA5 Licence Interest, and maintained that option by funding 25% of the cost of Avivi-1. It retains but has not yet exercised its option to participate in future operations.

 

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