Tower Resources Secures Rig Contract for Cameroon Well
Why we think this is good
The announcement of a new rig contract for Tower Resources' operations in Cameroon is a positive development. While the financial details are not disclosed, the company has secured favorable terms compared to previous offers, and the contract is expected to have a positive impact on the company's earnings. The fact that the rig is already committed to move to Cameroon also suggests lower execution risk. However, there are still some regulatory approvals required, and the timeline for the contract is not entirely clear. Overall, the news represents a step forward for the company's operations in Cameroon.
Key Points
- Tower Resources' subsidiary has issued a Letter of Award to ADES for a jack-up rig to drill the NJOM-3 well on the Thali license in Cameroon
- The commercial terms are confidential but are said to be favorable compared to previous offers
- The contract is subject to contract and usual conditions precedent, including government approvals and completion of a farm-out agreement
Summary
Tower Resources plc (AIM: TRP), the AIM-listed oil and gas company focused on Africa, has issued a Letter of Award to Advanced Energy Systems S.A.E ("ADES") for the provision of a jack-up rig to drill the NJOM-3 well on Tower's Thali license in Cameroon in Q4 2025. The commercial terms of the contract are confidential, but the company states that the terms are well in line with its previous projections and compare very favorably to offers received from other rig owners. The contract is subject to contract and usual conditions precedent, including receipt of Government approvals in Cameroon and completion of Tower's farm-out to Prime Global Energies Limited.