Tower Resources farms into Kenya's Block 2B


Tower Resources farms into Kenya's Block 2B

LONDON -- Tower Resources has reported the completion of its farm in to Block 2B, onshore Kenya. In April, the company reported that it had agreed to acquire a 15% interest in Block 2B, Kenya, from Lion Petroleum, a wholly-owned subsidiary of Taipan Resources, who hold 45% of the license.

Completion was conditional on consent from Premier Oil group, 55% interest, which was received last week and also subject to the payment of $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 June 2, 2014.

In total consideration for the farm-in, Lion Petroleum receive $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 $1 million cash on the spudding of a second well.

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

Activity in the Anza basin has also increased recently. In Block 9, adjacent to Block 2B, Africa Oil, and its partner, Marathon Oil are currently drilling the Sala-1 exploration well, which will test a large prospect in the Cretaceous Anza rift system. The results of the Sala-1 well are expected this month and the well is targeting gross risked prospective resources of 402 MMboe (Africa Oil Presentation, May 2014).

The recently acquired 2D seismic data across Block 2B is being used to determine the drilling location of the first potentially play opening well, Badada-1, which is expected to spud at the end of 2014/early 2015 and will target gross mean unrisked prospective resources of 251 MMboe.

Graeme Thomson, CEO, stated: "We are extremely delighted 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 license is right at the forefront of new plays and we look forward to drilling in the coming months."

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