Tower Resources completes farm-in to Block 2B, Kenya

Oil and gas exploration company, Tower Resources plc has announced the completion of its farm-in to Block 2B, onshore Kenya.

The company agreed to acquire a 15% interest in Block 2B in April from Lion Petroleum Corp., a wholly owned subsidiary of Taipan Resources Inc. who hold 45% of the licence.

Completion was conditional on consent from Premier Oil group who hold 55% of the licence, was received last week and also subject to the payment of US$4.5 million cash and the admission on the AIM market of the first tranche of 4.5 million Ordinary Shares in Tower, both of which occurred on Monday 2 June 2014.

In total consideration for the farm-in, Lion Petroleum Corp. receive US$4.5 million cash and a total of 9.0 million Ordinary Shares in Tower, of which the second tranche, consisting of 4.5 million shares, will be received in three months’ time. There is also a contingent payment of US$1 million cash on the spudding of a second well.

In February 2014, Taipan announced a 51-101 compliant independent assessment of Block 2B, completed by Sproule International Limited, which estimated Block 2B, located in the Anza Basin, to hold gross mean unrisked prospective resources of 1,593mmboe, based on 19 exploration leads.

Tower Resources CEO Graeme Thomson says the company has plans to start drilling in the near term.

“We are extremely pleased to conclude this exciting farm-in to Kenya at a time when it is opening up as an oil province. The farm-in perfectly fits our strategy of securing material positions in very high upside exploration assets coupled with near-term drilling which offers the potential to materially add-value for shareholders. This licence is right at the forefront of new plays and we look forward to drilling in the coming months,” says Thompson.

Data acquired from a 2D seismic across Block 2B has seen the planned drilling of the Badala-1 which is expected to spud at the end of 2014/early 2015 and will target gross mean unrisked prospective resources of 251mmboe.

The Anza basin where Block 2B is located is adjacent Block 9 where Africa Oil and Marathon Oil are drilling at the Sala 1 exploration well targeting 402mmboe with results expected in July.

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