Africa-focused Tower Resources announced the signing of the shallow water Thali (formerly known as Dissoni) production sharing contract (PSC), offshore Cameroon.
The PSC signing ceremony took place on 15 September 2015 at the offices of Société Nationale des Hydrocarbures (SNH) in Yaoundé, Cameroon, in the presence of a delegation which included the Emmanuel Bonde, minister of mines, industry and technological development, and Adolphe Moudiki, executive general manager of SNH.
Tower’s signature of the Thali PSC represents a low cost entry into a mature region with low-risk exploration/appraisal targets and the potential for significant upside. Tower has a 100% interest in the Thali PSC, and the terms of the PSC include three exploration phases, including the minimum work commitment of the initial exploration period:
Tower has the option of relinquishing the PSC on completion of each period on condition that the minimum work commitment has been met.
The Thali PSC covers an area of 119.2sq km, with water depths ranging from 8-48m, and lies in the prolific Rio del Rey basin, in the eastern part of the Niger Delta. The Rio del Rey basin has, to date, produced over one billion bbl and has estimated remaining reserves of 1.2 billion boe, primarily within depths of less than 2000m. The Rio del Rey is a sub-basin of the Niger Delta, an area in which over 34.5 billion bbl has been discovered, with 2.5 billion boe attributed to the Cameroonian section.
The Thali Block has the potential to hold up to four distinct play systems, including the established play in which three discovery wells, two gas (Rumpi-1, Njonji-2) and one oil (Njonji-1), have already been drilled on the block. There are 7 million bbl already discovered on the block. These are currently viewed as sub-commercial discoveries, but once better seismic imaging has been achieved, Tower sees potential to add incremental oil reserves to achieve commerciality. There is also significant potential to develop prospects at deeper levels, in both structural and stratigraphic traps, once better imaging has been achieved. The existence of infrastructure in adjacent blocks means that the development of a 20 MMbbl field has the potential to be economically viable at current oil prices.
Tower’s initial priority will be the acquisition of 3D seismic in 1H 2016. The seismic will be used to update the existing 24 year old data set to allow better resolution of shallow plays as well as imaging of deeper sections. Tower expects to be drilling in 2017-2018.
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