WTI (Sep) $76.31 -$1.60, Brent (Oct) $79.52 -$1.20, Diff -$3.21 + 40c
USNG (Sep) $1.97 -7c, UKNG (Sep) 90.05p +2.1p, TTF (Sep) €36.615. +€0.79

Oil price

Oil has fallen this week but may not have underperformed some markets which have at some stages had a meltdown. So, weak economies trump grim geopolitics where the Middle East is stoking up again. Non farm payrolls today and markets remain flat, the ten year Treasury now yields less than 4%.

Chevron figures were mixed, worse than forecast downstream where margins came under pressure. But Exxon beat the whisper with EPS of $2.14 vs a forecast of $2.01.

Savannah Energy

Further to its announcement on 17 June 2024, the Company advises that its ordinary shares remain suspended from trading on AIM while it advances the various workstreams associated with completion of the proposed transaction and is working towards publishing an AIM Admission Document in Q3 / early Q4 2024. A further update on transaction progress, and associated matters, is expected to be made in early September.

Savannah are still working to ‘progress workstreams’ to secure the acquisition of the assets in South Sudan and we are told to expect an admission document late 3Q or early 4Q 2024.

Tower Resources

Tower has provided the following update on its activities in respect of its PEL 96 license, offshore Namibia. 

Highlights

• Tower has been notified by the Namibian Ministry of Mines and Energy of its agreement to the extension of the Initial Exploration Period of PEL 96 to October 31, 2024 and has invited the Company to apply to enter the First Renewal Period of PEL 96, for a period of 2-3 further years.
• The remaining work commitment for the Initial Exploration Period is already substantially complete, and the MME has also agreed to defer the Company’s commitment to acquire 1,000 square kilometres (“km2“) of new 3D seismic data to the First Renewal Period.
• The Company is continuing to work on the evaluation of large stratigraphic and structural leads and prospects and plans to reprocess the previously acquired 2D seismic data over large areas of the license both in the remainder of the Initial Exploration Period and in the First Renewal Period.

The Company has been notified by the Namibian MME of its agreement to the extension of the Initial Exploration Period of PEL 96 to October 31, 2024 and has invited the Company to apply to enter the First Renewal Period of PEL 96, for a period of 2-3 further years. The MME has also agreed to defer the Company’s commitment to acquire 1,000 km² of new 3D seismic data to the First Renewal Period.

The remaining work commitment for the Initial Exploration Period, comprising the oil seep satellite analysis, play fairway analysis, development of an updated prospect and lead inventory, and the high-grading of acreage, is already substantially complete. However, the Company is continuing to work on the evaluation of large stratigraphic and structural leads and prospects and plans to reprocess the previously acquired 2D seismic data over large areas of the license both in the remainder of the Initial Exploration Period and in the First Renewal Period, in order to support the optimal selection of an area for the further 3D data acquisition.

The evaluation of leads and prospects has required further time commitment due to the encouraging discovery of a large number of substantial stratigraphic traps, in addition to the large anticlines and other structural traps that had already been identified. Our basin modelling work, completed in 2023, had previously identified source rocks deep within the PEL96 portion of the Dolphin Graben calculated to be mature for in excess of 100 to 150 billions of barrels of oil generation, and also identified well-defined migration paths for this oil, and this work has been shared with investors in the Technical Presentation that the Company made to Africa Oil Week and posted on Tower’s website on 11 October 2023. Since that time, the Company has reviewed and interpreted in excess of 20,000 line kilometres of 2D seismic data across PEL 96. This has resulted in the identification of a substantial number of very large stratigraphic traps in five main areas of the license, favourably located adjacent to those deeper source rocks of the Dolphin Graben and the migration paths we identified.

The results of this intensive technical effort have given Tower new and favourable insights into the prospectivity of the acreage, however, it cannot acquire new 3D seismic data over all of them in the next phase of work. Due to the variability of quality or coverage of data over some of these leads, the PEL 96 Joint Venture currently intends to reprocess the existing seismic data in these areas to extract as much information as possible from the original data files and significantly improve seismic data quality. The seismic reprocessing work will enable the PEL 96 Joint Venture to make a final choice regarding the optimal 3D data acquisition area – a view Tower shared with MME in the Company’s Technical Advisory Committee meeting in Windhoek last week.

The Company and its partners, alongside the MME, are all pleased by the number of leads and prospects that are already identified, and look forward to sharing more information about these when the further work has been completed.

Tower Resources Chairman & CEO, Jeremy Asher, commented:
“We are grateful to the Minister, the Hon. Tom K Alweendo MP,  the Executive Director, Mr Penda Ithini, and the Petroleum Commissioner, Ms Maggy Shino, for their continued support and enthusiasm for our PEL 96 project. Our view of the prospectivity of PEL 96 has improved greatly since we began the current phase of work in 2019, and we look forward to having sufficient data quality to share a more detailed picture of the structures we wish to explore further with the 3D data acquisition, as soon as we have it. In the meantime, we plan to prepare a more detailed report summarising our findings to date, the main conclusions of which we will share with investors in due course.”

The spotlight for Tower switches for the moment over to Namibia where the company has a block in what is a very hot area in world oil and gas. And pretty good news it is too as the Government has extended the PEL 96 licence until October 2024 and has invited the Company to apply to enter the First Renewal Period of PEL 96, for a period of 2-3 further years.

As far as commitments go the company are pretty much in ok for Phase 1 and for the next phase it looks as if they can use existing 2D seismic which they can work up and may just need to buy a little 3D to analyse. Although the Tower story has taken quite a long time, Chairman Jeremy Asher has one way or another, mainly via his own cheque book, kept it all on the go, now visibility is getting much better.

Tower has also announced the following Board changes. 

First, the Company is delighted to announce the appointment of Ms Stacey Kivel as an independent Non-Executive Director of the Company with immediate effect.

Stacey has 20 years’ experience in senior management and as a company director, including as a Head Corporate Counsel and Company Secretary, working across business development and investor relations for oil exploration operators with assets in Africa, including both AIM and TSX listed companies.  As a US qualified lawyer with a degree in Finance, she assisted these entrepreneurial companies with their commercial activities, including the raising of hundreds of millions of US dollars in debt and equity finance to successfully run drilling campaigns. Stacey is also familiar with both Cameroon and Tower, albeit some time ago, having served as an advisor and counsel to Tower between 2013 and 2016, where she was mandated with securing the successful acquisition of the Thali block in Cameroon, and assisted the Company with its other African interests.

Stacey will join the Remuneration and Audit Committees and has agreed to chair the Remuneration Committee going forward.

Second, the Company is also pleased to announce that Dr Mark Enfield has agreed to increase his time commitment to the Company and will henceforth serve as an Executive Director of the Company. This step reflects the growing amount of subsurface and technical work which the Company has been undertaking over the past year as Operator of both the Cameroon Thali license and the Namibian PEL 96 license, and which the Company expects to increase further over the years ahead.

The Company is stepping up the already substantial amount of subsurface work it has been carrying out on PEL 96, where Tower intends to reprocess a large amount of 2D data over the coming months ahead of further 3D seismic data acquisition, as recently explained in today’s Namibia Update announcement. Furthermore, the NJOM-3 well, which the Company is still expecting to spud in late Q4 2024 or early Q1 2025 (before the end of the current license period in February 2025) will also provide us with a large amount of further subsurface data which will need to be integrated rapidly into our models and plans for the next three production wells. As a result, Tower is pleased to appoint Mark in an executive capacity, though this will also mean ending our formal out-sourcing agreement with EPI Group (“EPI”), under which the Company had been contracting this work until now. Tower will continue to work with EPI and will use their personnel on an ad hoc basis as required.

As a result of Mark shifting to the role of an Executive Director, he will no longer serve on the Remuneration Committee or the Audit Committee, and his position on those committees will be taken by Stacey Kivel as noted above.

Tower Resources Chairman & CEO, Jeremy Asher, commented:
“We are delighted to welcome Stacey to the Board and to have a greater share of Mark’s time – though he has shown no shortage of commitment to us over the last few years in his non-executive capacity. The Company has previously worked with Stacey in a professional capacity some years ago, so we know that her quality both as a lawyer and as a commercial advisor within our industry, and her familiarity with our Thali PSC, which she helped to negotiate in 2014-15, and with Cameroon where she has been working on other projects recently, will serve the Company well as we build our business there. We must also thank EPI for their support over many years, and look forward to this excellent working relationship continuing, albeit in a different form, for many years to come.”

I dont normally comment on modest changes to boards but these appointments are important and mean that Jeremy means business, as above for Tower going forward. Stacey Kivel is an excellent choice as NED and I have watched her work for many years in the sector. But maybe even more exciting for Tower shareholders is the promotion to the board of sector super sub Mark Enfield who is a legend in the industry and in my view could walk into pretty any job he wanted.

The promotion to the board means that EPI, who Mark historically acted as a consultant for, will probably lose both the client and also an important part of the team but it looks like the relationship is not over. All round these announcements are very good for Tower the big question is, can Jeremy now that his foot is on the accelerator, keep the company going under its own power.

KeyFacts Energy Industry Directory: Malcy's Blog