With no free rigs and funding talks still underway, early-2025 drilling ops on UK player’s agenda off Cameroon

The UK-based oil and gas company Tower Resources has received a proposal to finance its planned drilling campaign in Africa via a farm-out of a minority interest in a production sharing contract (PSC) for an asset offshore Cameroon, where a well was due to be spud this year but rig unavailability and the ongoing farm-out process threw a wrench in the firm’s plans. The drilling activities are now being targeted to kick off early next year.

The offer for the NJOM-3 well, which the UK player is assessing, came from “a substantial upstream company with existing production.” If the talks come to fruition, the proposal should provide sufficient funds to start the drilling campaign. While the spudding was expected to take place in Q2 or possibly Q3 2024, the target date now is early 2025.

A draft proposal from another party was received last year, but only for a portion of the funds required, the company said. Two additional parties have undertaken due diligence deemed substantial on the project over the past few months, with a proposal expected from at least one. 

“We also have two parallel sets of bank discussions underway with multiple banks, one for longer term development financing of the next three wells we have planned for the Njonji structure; and one for short term development, which would supplement a farm-out to finance putting NJOM-3 into production earlier, while still working on the next three wells,” noted Jeremy Asher, Chairman and Chief Executive Officer.

“We are keeping an open mind on these options, and discussing them in detail with both our banks and prospective farm-out partners. We expect to reach a conclusion on this short-term production option and bank financing in the coming months, before drilling the well.”

Borr Drilling’s Norve jack-up rig was hired for the drilling campaign in late 2023. Following a contract extension in February, the rig deal hit a snag in May, when it was announced that it would need to prolong its assignment with BW Energy.

Regarding Tower Resources’ Namibian operations, the first half of 2024 was spent analyzing over 20,000 km of 2D seismic data for the PEL96 license area. As reported, several “very promising and very large” potential structures were identified, which the firm intends to investigate further.

The reprocessing is anticipated to be completed in mid-2025, followed by interpretation and finally 3D seismic data acquisition in 2026. Namibia’s Ministry of Mines and Energy agreed to defer the 3D acquisition to the first renewal period of the PEL96 license, which is slated to start at the end of October 2024 and will last for two to three years.

“By the end of October 2024, we will also provide to the Ministry the details of the acreage (covering 50% of the current license area) which we propose to relinquish as we move into the First Renewal Period. We have identified this area and are awaiting our partners’ formal approval before submitting this,” noted Asher.

The UK player clarified that, while unsolicited interest in the license was received, it was not formally seeking to farm out its license interest in Namibia, as it feels this would be premature given the current stage of work.