Uganda - Mvule-1 Exploration Well Completion

RNS Number : 9459X

Tower Resources PLC

23 February 2012

 



PRESS RELEASE

23 February 2012

Tower Resources plc

("Tower" or the "Company")

Uganda - Mvule-1 Exploration Well Completion

Tower Resources plc ("Tower"), LN: TRP, the AIM listed company with exploration assets in offshore Namibia and onshore Uganda, wishes to advise that operations on the Mvule-1 exploration well in Uganda Licence EA5 have been completed. The well reached its total depth at 590 metres - basement was penetrated at 576 metres. No significant hydrocarbon shows were encountered over the zone of interest and electric wireline logging and fluid sampling confirmed that the well was water bearing. The well is now being plugged and abandoned.

Mvule-1 was the final well commitment on EA5 and the final Exploration period ends on 26^th March 2012. The Company's wholly-owned subsidiary Neptune Petroleum (Uganda) Limited ("Neptune Uganda") will now complete its site restoration commitments in line with government regulations. 

Tower's CEO, Peter Kingston, commented: "It is a great disappointment that the final commitment well in EA5 was unsuccessful, for the Tower Board, Tower's shareholders, the committed staff of Neptune Uganda and the people of West Nile who have been so supportive over the past six years. However, while I believe that the largest structures have now been tested, I also believe that the generation of oil has been established and there remains potential for oil discoveries in West Nile sometime in the future. The Tower Board will continue to review future opportunities in the region."

Tower's Chairman, Jeremy Asher, added: "We are now ready to focus on our highly attractive position in Namibia, despite this frustrating outcome in Uganda. The £5.41m placing and £600,000 SEDA drawdown, announced on 9^th February 2012, strengthened Tower's financial base both to deal with this eventuality, and to provide a solid position from which to move forward. The exploration well on our Namibian license, currently planned for 2013, will test five targets aggregating over 9 billion barrels of recoverable reserves. Tower has a fully carried 15% interest in the well and the operator, Arcadia, is currently in advanced discussions regarding a farm-out."

Tower Resources PLC holds interests in licenses in three areas: Namibia, Uganda and Western Sahara.

·    In Namibia, Tower holds a 15% interest in license 0010 comprising three offshore blocks covering 12,000 km². Tower is fully carried by operator Arcadia for the current commitment well and a further optional well on the license. The license contains three large structures, of which the Delta structure may contain 9.25 billion barrels of gross unrisked recoverable resources, according to the Competent Person's Report issued in June 2011. The two largest targets within the Delta structure have economic chances of success of 31% and 19% respectively, and their risked EMV10s (net to Tower) are $744 million and $776 million respectively.

·    In Uganda, Tower holds a 100% interest in license EA-5 as detailed above, which it proposes to relinquish at the end of the current exploration period on 26^th March 2012. The intangible exploration and evaluation assets and goodwill attributable to the EA-5 license will be written off.

·    In Western Sahara, Tower holds a 50% working interest in three licence blocks in the Saharawi Arab Democratic Republic ("SADR"). The Imlili Block covers approximately 16,965 km² in water depths of between 0 to 150 metres, and lies offshore from the very large onshore Bojador Block (44,298 km²) and east of the offshore Guelta Block (15,760 km²), Wessex Exploration PLC holds the remaining 50% working interest and is operator in all three blocks.

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

Contacts:

Northland Capital Partners Limited (Nominated Adviser and Joint Broker) Gavin Burnell,  Edward Hutton John-Henry Wicks / Alice Lane (Broking) 0207 796 8800 M Communications Patrick d'Ancona, Chris McMahon, Andrew Benbow 020 7920 2358

 

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