TOWER RESOURCES PLC — Interim / Quarterly Report 2021

Sep 30, 2021

National Storage Mechanism | Additional information

RNS Number : 4424N

Tower Resources PLC

30 September 2021

30 September 2021

Tower Resources plc

Interim Results to 30 June 2021

Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)), the AIM-listed oil and gas company with its focus on Africa, announces its Interim Results for the six months ended 30 June 2021.

HIGHLIGHTS

§ January 2021 Placing of 384,615,384 new ordinary shares at 0.325p to raise £1.25 million (gross), together with issuance of one placing warrant for every three placing shares exercisable for two years at 0.65 pence per share and repayment of the US$500,000 Shard Merchant Capital Ltd loan facility;

§ Updated resource estimates for the Algoa-Gamtoos license, offshore South Africa, following the reprocessing of additional 2D seismic data from Tower's 50% partner and license Operator, New Age Energy Algoa (Pty) Ltd. The updated resource estimate identified three separate reservoir targets in the deep-water (Outeniqua basin) section of the license with a total of 1,411 million boe Pmean recoverable resources (unrisked). A new lead in the submarine fan complex in the shallower Gamtoos area of the license was also identified and is estimated to contain 135 million boe Pmean recoverable resources (unrisked);

§ March 2021 extension to the US$750,000 Pegasus Petroleum Loan Facility ("Facility") to 30 November 2021 in exchange for an increase in production-based payments due to Pegasus from the Company's Thali license, offshore Cameroon. Interest continued to accrue at 12% per annum, and the production-based payments were increased to 3.75% of the contractor share of production if the Facility was repaid prior to July 15 2021 and 5.00% otherwise.

§ In March 2021 through the Company's subsidiary, Tower Resources Cameroon SA, Tower received Presidential approval of a further extension to the First Exploration Period of the Thali PSC, offshore Cameroon, to May 2022 following the Company having declared Force Majeure with respect to the PSC a year earlier due to the Covid-19 pandemic. 

§ In May 2021, Tower Resources Cameroon SA received formal confirmation from the Cameroon Minister of Mines, Industry and Technological Development ("MINMIDT") of the formal extension of the First Exploration Period of the Thali PSC, offshore Cameroon, to May 2022. The extension enables the Company to finalise the schedule for the drilling and testing of the NJOM-3 well;

§ A ruling by the UK's VAT Upper-Tier Tax Tribunal, which upheld the First-Tier Tribunal's decision in favour of Tower in the Company's dispute with HMRC regarding its decision to deny the Company credit for input VAT, was announced in May 2021;

§ June 2021 Subscription for 20,000,000 new ordinary shares at 0.25p to raise £50,000 (gross) by the Company's Chairman and CEO, Jeremy Asher. At the same time the terms of the Facility were modified so that the higher level of production-based payments due to Pegasus from the Thali PSC would only come into force if the Facility were not repaid by 15 August 2021 as opposed to 15 July 2021.

POST REPORTING PERIOD EVENTS

§ In August 2021 the Company announced binding Heads of Agreement ("HoA") in respect of a farm-out to Beluga Energy Limited ("Beluga") of a 49% non-operating working interest in its Thali PSC in Cameroon.

The key economic elements of the transaction set out in the HoA were:

o The farm-out covers US$15 million towards the cost of the NJOM-3 well that Tower is    planning to drill on the Thali block;

o Beluga will receive a 49% working interest in the PSC, subject to production-based payments to Tower's subsidiary TRCSA amounting to 10% of the contractor share of production accruing to Beluga under the PSC;

o The well cost is currently expected to be approximately US$16.8 million, of which approximately US$3 million has already been spent;

o Each party will recover costs actually funded and recoverable under the PSC, pari-passu;

o Tower will effectively contribute its non-recoverable costs in consideration of the production-based payments referred to above;

o Costs in excess of U$15 million, and future costs, will be funded pro-rata with respect to Tower's and Beluga's working interests.

The HoA were binding subject only to final documentation, a financing contingency requiring Beluga's shareholders' approval, and approval of the Minister of Mines, Industry and Technological Development ("MINMIDT");

§ August 2021 Placing of 352,941,176 new ordinary shares at 0.425p to raise £1.5 million (gross). Net proceeds of the Placing were used to repay the US$750,000 Facility, together with accrued interest and fees of US$102,500, and to cover working capital requirements; the repayment of the Facility was made in time to avoid the higher level of production-based payments which would have been due had repayment been delayed to November 2021.

§ Finalisation of documentation relating to the farm-out to Beluga Energy Limited of a 49% non-operating working interest in the Company's Thali PSC in Cameroon and submission of the documentation the Minister of Mines, Industry and Technological Development ("MINMIDT") as per the Cameroon Petroleum Code.  

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Contacts

Tower Resources plc	+44 20 7157 9625
Jeremy Asher Chairman and CEO
Andrew Matharu VP - Corporate Affairs
SP Angel Corporate Finance LLP Nominated Adviser and Joint Broker Stuart Gledhill Caroline Rowe	+44 20 3470 0470
Novum Securities Limited Joint Broker Jon Bellis Colin Rowbury	+44 20 7399 9400
Panmure Gordon (UK) Limited Joint Broker Nick Lovering Hugh Rich	+44 20 7886 2500

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2021

Dear Shareholder,

The first six months of 2021 have been very positive for our Company, in marked contrast to the first six months of 2020, and the progress we have made during this period has, so far, been carried through the third quarter.

We were delighted to agree the farm-out to Beluga Energy Limited ("Beluga"), and over the last two months we have moved forward with negotiation of a fresh rig contract and with resumption of discussions with the service companies to finalise both terms and schedule for the drilling and testing of the NJOM-3 well.

It took a little longer to finalise the full documentation of the farm-out than we had hoped but this was still achieved quite rapidly, and the documents are now with the relevant Cameroon Government bodies, and also with Beluga's financiers. Beluga yesterday requested, and we have agreed, a 30-day extension to the financing contingency which, together with the Cameroon government approval, are conditions precedent for completion of the farmout, and we also still have to finalise the escrow agreement with our lawyers, Watson, Farley & Williams LLP, for funds to be held prior to disbursements. So although we now expect completion will not be before the end of October at the earliest, we believe the transaction remains on track. 

At the time of writing, while spudding the well before the year-end remains theoretically possible, we believe that the most likely timing for the well is in the first quarter 2022, and we are still working on the dates which will best fit the combination of rig and service company schedules and lead times. I should note that we are presently considering two rigs, one available early in Q1 2022 and one available later in Q1 2022, in addition to other rig possibilities, and so we are confident of both rig and service availability in this period. But we are obviously keen to spud earlier rather than later if possible.

We have also already begun work on planning the next steps to reach oil production assuming a successful test result from NJOM-3. As presently conceived, this would involve the design and drilling of three further wells deviated into different parts of the Njonji structure from the NJOM-3 well location, and the completion of the four wells with wellheads above the water on a simple steel structure which would also brace the four well conductors. This would allow easy access to the wellheads for a Mobile Oil Production Unit ("MOPU") and shuttle tanker.

A significant element on the critical path to oil production is the specification and procurement of the MOPU, and until it is secured this also probably represents the largest operational risk to both schedule and budget for reaching first oil. Therefore we have already begun discussions with contractors about cooperation to secure or build a suitable unit as a joint venture, including the possibility of securing an option on a unit, to be declared after we have the result of the NJOM-3 well. These negotiations will reduce significantly the lead time for the next stage of the Njonji project, assuming the current well achieves its objectives successfully.

Looking forward outside Cameroon, in South Africa we anticipate making decisions over the coming months with our joint venture partner NewAge regarding the timing, specification and financing of further 3D seismic acquisition over our Algoa-Gamtoos license in South Africa, with our preferred focus being the leads in the deep water Outeniqua basin section of the block that contain a combined unrisked potential recoverable resource of over 1.4 billion boe. We are also engaging in further basin modelling on our Namibian blocks, while waiting with interest for the results from Shell and Total's upcoming wells in the Namibian Orange Basin.

Finally, we were very gratified by the decision of the Upper Tier Tribunal, which we received in May, to uphold the First Tier Tribunal's 2019 decision in our favour regarding our eligibility for VAT and our entitlement to refunds of input VAT, which HMRC now accepts. This ruling covers our current and future VAT returns and also the past returns up to the period covered by our original appeal to the FTT.  There are a number of returns for periods after those covered by the original FTT appeal that are covered by two further appeals that remain with the FTT, which is why we have not yet completed eliminated the provision for VAT in our accounts, but we are hopeful that these will also be resolved satisfactorily in due course.

Jeremy Asher                                                                                      

Chairman and Chief Executive

30 September 2021

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		Six months ended 30 June 2021 (unaudited)		Six months ended 30 June 2020 (unaudited)
	Note	$		$
Revenue		-		-
Cost of sales		-		-
Gross profit		-		-
Other administrative expenses		(276,150)		(364,019)
VAT provision		519,912		135,907
Share-based payment charges incurred on incentivisation of staff and consultants	9	(153,039)		(148,924)
Pre-licence expenditures		(274)		-
Total administrative expenses		90,449		(377,036)
Group operating loss		90,449		(377,036)
Finance expense		(129,907)		(80,651)
Loss for the period before taxation		(39,458)		(457,687)
Taxation		-		-
Loss for the period after taxation		(39,458)		(457,687)
Other comprehensive income		-		-
Total comprehensive expense for the period		(39,458)		(457,687)
Basic loss per share (USc)	3	(0.00c)		(0.04c)
Diluted loss per share (USc)	3	(0.00c)		(0.04c)

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		30 June 2021 (unaudited)	31 December 2020 (audited)
	Note		$
Non-current assets
Exploration and evaluation assets	4	27,942,083	27,080,202
		27,942,083	27,080,202
Current assets
Trade and other receivables	5	23,275	8,805
Cash and cash equivalents		125,030	10,054
		148,305	18,859
Total assets		28,090,388	27,099,061
Current liabilities
Trade and other payables	6	3,256,877	3,796,111
Borrowings	7	870,645	1,262,937
		4,127,522	5,059,048
Non-current liabilities
Borrowings	7	54,906	68,763
		54,906	68,763
Equity
Share capital	8	18,259,833	18,254,040
Share premium	8	147,107,600	145,343,446
Retained losses		(141,459,473)	(141,626,236)
		23,907,960	21,971,250
Total liabilities and equity		28,090,388	27,099,061

Signed on behalf of the Board of Directors

Jeremy Asher

Chairman and Chief Executive

29 September 2021

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital	Share premium	1 Share-based payments reserve	Retained losses	Total
	$	$	$	$	$
At 1 January 2020	18,251,117	144,294,128	7,659,308	(148,452,837)	21,751,716
Shares issued for cash	1,748	653,757	-	-	655,505
Shares issued on settlement of third-party fees	70	26,150	-	-	26,220
Shares issued on settlement of staff remuneration	-	-	-	-	-
Share issue costs	-	(58,996)	-	-	(58,996)
Total comprehensive income for the period	-	-	177,107	(457,687)	(280,580)
At 30 June 2020	18,252,935	144,915,039	7,836,415	(148,910,524)	22,093,865
Shares issued for cash	517	202,838	-	-	203,355
Shares issued on settlement of third-party fees	-	-	-	-	-
Shares issued in settlement of loan interest	588	225,568	-	-	226,156
Share issue costs	-	1	-	-	1
Total comprehensive expense for the period	-	-	350,922	(903,049)	(552,127)
At 31 December 2020	18,254,040	145,343,446	8,187,337	(149,813,573)	21,971,250
Shares issued for cash	5,521	1,767,869	-	-	1,773,390
Shares issued on settlement of third-party fees	273	88,330	-	-	88,603
Shares issue costs	-	(92,045)	-	-	(92,045)
Total comprehensive income for the period	-	-	206,221	(39,458)	166,763
At 30 June 2021	18,259,833	147,107,600	8,393,558	(149,853,031)	23,907,960

1 The share-based payment reserve has been included within the retained loss reserve and is a non-distributable reserve.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

		Six months ended 30 June 2021 (unaudited)	Six months ended 30 June 2020 (unaudited)
	Note	$	$
Cash outflow from operating activities
Group operating profit / (loss) for the period		90,449	(377,036)
Share-based payments	9	206,221	148,924
Finance costs	4	(769)	-
Operating cash flow before changes in working capital		295,901	(228,112)
(Increase) / decrease in receivables and prepayments		(14,470)	6,993
(Decrease) / increase in trade and other payables		(539,234)	861,314
Cash used in operating activities		(257,803)	640,195
Investing activities
Exploration and evaluation costs	4	(861,881)	(1,290,678)
Net cash used in investing activities		(861,881)	(1,290,678)
Financing activities
Cash proceeds from issue of ordinary share capital net of issue costs	8	1,769,947	622,729
Proceeds from drawdown of borrowing facilities	7	-	61,596
Repayment of borrowing facilities		(501,154)	-
Repayment of interest on borrowing facilities		(35,142)	-
Effects of foreign currency movements on borrowing facilities		1,010	(476)
Net cash from financing activities		1,234,660	683,849
Increase in cash and cash equivalents		114,976	33,366
Cash and cash equivalents at beginning of period		10,054	38,662
Cash and cash equivalents at end of period		125,030	72,028

NOTES TO THE INTERIM FINANICAL INFORMATION

1.  Accounting policies

a)       Basis of preparation

This interim financial report, which includes a condensed set of financial statements of the Company and its subsidiary undertakings ("the Group"), has been prepared using the historical cost convention and based on International Financial Reporting Standards ("IFRS") including IAS 34 'Interim Financial Reporting' and IFRS 6 'Exploration for and Evaluation of Mineral Reserves', as adopted by the European Union ("EU").

The condensed set of financial statements for the six months ended 30 June 2021 is unaudited and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. They have been prepared using accounting bases and policies consistent with those used in the preparation of the audited financial statements of the Company and the Group for the year ended 31 December 2020 and those to be used for the year ending 31 December 2021. The comparative figures for the half year ended 30 June 2020 are unaudited. The comparative figures for the year ended 31 December 2020 are not the Company's full statutory accounts but have been extracted from the financial statements for the year ended 31 December 2020 which have been delivered to the Registrar of Companies and the auditors' report thereon was unqualified and did not contain a statement under sections 498(2) and 498(3) of the Companies Act 2006.

This half-yearly financial report was approved by the Board of Directors on 29 September 2021.

b)       Going concern

The Group will need to raise further funds sufficient to meet its financial and operating commitments for the 12-month period commencing immediately subsequent to the date of signature of these interim financial statements and is planning to do this through:

·      Completion of the Beluga Energy Limited farmout transaction for which heads of agreement were signed and announced on 10 August 2021; and

·      A farm-out of its South African license sufficient to cover its share of 3D acquisition work programme costs which are approximately £2 million; or

·      Receipt of further funds from the exercise of warrants or the issuance of shares in order to provide partial funding of the proposed 3D acquisition work programme in South Africa.

The Directors are confident that the above initiatives will be concluded satisfactorily within the necessary timeframes and the financial statements have, therefore, been prepared on a going concern basis.

There can, however, be no guarantee that the required funds may be raised or transactions completed within the necessary timeframes. Consequently, a material uncertainty exists that may cast doubt on the Group's ability to continue to operate and to meet its commitments and discharge its liabilities in the normal course of business for a period of not less than twelve months from the date of this report. The financial statements do not include the adjustments that would result if the Group was unable to continue in operation such as the impairment of the exploration assets.

2.  Operating segments

The Group has two reportable operating segments: Africa and Head Office. Non-current assets and operating liabilities are located in Africa, whilst the majority of current assets are carried at Head Office. The Group has not yet commenced production and therefore has no revenue. Each reportable segment adopts the same accounting policies. In compliance with IAS 34 'Interim Financial Reporting' the following table reconciles the operational loss and the assets and liabilities of each reportable segment with the consolidated figures presented in these Financial Statements, together with comparative figures for the period-ended 30 June 2020.

	Africa		Head Office		Total
	Six months ended 30 June 2021	Six months ended 30 June 2020	Six months ended 30 June 2021	Six months ended 30 June 2020	Six months ended 30 June 2021	Six months ended 30 June 2020
	$	$	$	$	$	$
Loss by reportable segment	(65,611)	11,608	105,069	446,079	39,458	457,687
Total assets by reportable segment 1	27,954,857	25,624,797	135,531	100,180	28,090,388	25,724,977
Total liabilities by reportable segment 2	(2,384,500)	(1,313,963)	(1,797,928)	(2,317,149)	(4,182,428)	(3,631,112)

1 Carrying amounts of segment assets exclude investments in subsidiaries.

2 Carrying amounts of segment liabilities exclude intra-group financing.

3.  Loss per ordinary share

		Basic & Diluted
		30 June 2021 (unaudited)	31 December 2020 (audited)
		$	$
Loss for the period		39,458	457,687
Weighted average number of ordinary shares in issue during the period		1,699,278,182	1,190,700,446
Dilutive effect of share options outstanding		-	-
Fully diluted average number of ordinary shares during the period		1,699,278,182	1,190,700,446
Loss per share (USc)		0.00c	0.04c

4.  Intangible Exploration and Evaluation (E&E) assets

	Exploration and evaluation assets	Goodwill	Total
Period-ended 30 June 2021	$	$	$
Cost
At 1 January 2021	99,088,664	8,023,292	107,111,956
Additions during the period	861,881	-	861,881
At 30 June 2021	99,950,545	8,023,292	107,973,837
Amortisation and impairment
At 1 January 2021	(72,008,462)	(8,023,292)	(80,031,754)
At 1 January and 30 June 2021	(72,008,462)	(8,023,292)	(80,031,754)
Net book value
At 30 June 2021	27,942,083	-	27,942,083
At 31 December 2020	27,080,202	-	27,080,202

In accordance with the Group's accounting policies and IFRS 6 the Directors' have reviewed each of the exploration license areas for indications of impairment. Having done so, based on the financial constraints on the Group, and specific issues associated with each license it was concluded that a full ongoing impairment was only necessary in the case of the Zambian licenses 40 and 41, the circumstances of which have not changed since previous reporting period.

The additions during the period represent $600k (2020: $1.2 million), $197k in South Africa (2020: $80k), $77k in Namibia (2020: $21k) and $nil in Zambia (2020: $nil). The focus of the Group's activities during this period has been on preparing for and acquiring inventory and services with respect to the anticipated drilling of the Njonji-3 appraisal well.

5.  Trade and other receivables

	30 June 2021 (unaudited)	31 December 2020 (audited)
	$	$
Trade and other receivables	23,275	8,805

Trade and other receivables comprise prepaid expenditures.

6.  Trade and other payables

	30 June 2021 (unaudited)	31 December 2020 (audited)
	$	$
Trade and other payables	512,810	531,253
Work programme-related accruals	1,982,683	1,882,999
Other accruals	122,968	149,930
VAT payable	638,416	1,231,929
	3,256,877	3,796,111

The future ability of the Group to recover UK VAT was confirmed by the Upper Tier Tribunal in its judgement in favour of the Company on 20 May 2021 and is no longer the subject of a dispute with HMRC. Previously, on 8 July 2019, the Company had received an initial judgement in its favour from the First-Tier Tribunal (Tax Chamber). HMRC have chosen not appeal this latest ruling against them.

This ruling covers the Group's current and future VAT returns and also the past returns up to the period covered by our original appeal to the First Tier Tribunal ("FTT").  There are a number of returns for periods after those covered by the original FTT appeal that are covered by two further appeals that remain with the FTT, which is why the Directors have made the judgement to continue to provide against certain recoverable amounts until such time as the case has been formally closed. The Company has, therefore, continued to provide against $638k / £461k (2020: $1.2 million / £903k) of VAT recoverable within these financial statements.

Work programme-related accruals of $2.0 million (2020: $1.9 million) comprise $1.1 million with respect to Cameroon (2020: $1.1 million) and $900k with respect to South Africa (2020: $758k).

7.  Borrowings

	Group
	30 June 2021 (unaudited)	31 December 2020 (audited)
	$	$
Principal balance at beginning of period	1,338,726	770,480
Amounts drawn down during the period	-	561,742
Amounts repaid during the period	(501,154)	-
Currency revaluations at year end	1,004	6,504
Principal balance at end of period	838,576	1,338,726
Financing costs at beginning of year	(7,026)	70,010
Changes to financing costs during the year	47,383	(3,013)
Interest expense	81,755	152,372
Interest paid	(35,142)	(226,382)
Currency revaluations at year end	6	(13)
Financing costs at the end of the year	86,976	(7,026)
Carrying amount at end of period	925,552	1,331,700
Current	870,645	1,262,937
Non-current	54,906	68,763

Repayment dates

	30 June 2021 (unaudited)	31 December 2020 (audited)
	$	$
Due within 1 year	870,645	1,270,960
Due within years 2-5	42,171	55,010
Due in more than 5 years	12,735	5,730
	925,552	1,331,700

During the period, the Group and Company entered into no new facilities (2020: $562k) and repaid its Shard Merchant Capital Ltd loan in January 2021.

On 21 January 2021, the Company repaid in full the $500k loan facility with Shard Merchant Capital Ltd. The terms of the Shard Facility included the issue of 31,446,541 attached three-year warrants at a strike price of 0.6 pence and 5,761,198 shares to pre-pay interest charged at 12% per annum. The loan was secured by a fixed and floating charge over the Company's assets in favour of Shard Merchant Capital Ltd. The repayment of the loan included facility transaction costs of $35k. During the period the Company recognised interest charges totalling $21k (2020: $43k) and made repayments totalling $535k (2020: $30k).

On 4 March 2021, the Pegasus Petroleum Limited loan facility, to which Jeremy Asher is a controlling party, was extended to the end of November 2021. Consideration for the extension comprised an increase in the production-based payments, the amount depending on whether the loan would be repaid by 15 July or only in November 2021. Additionally, simple interest would accrue at 12% per annum pro rata, commencing on 4 March 2021, and would only be paid at the end of the facility period. The 15 July date was subsequently extended to 20 August 2021, with the production-based payments effectively limited to 3.75% of the Contractor share of revenues from the production sharing contract, net of the Government share and net of all Petroleum Taxes, and the facility was fully repaid on 20 August 2021.

8.  Share capital

		30 June 2021 (unaudited)	31 December 2020 (audited)
		$	$
Authorised, called up, allotted and fully paid
1,749,911,416 (2020: 1,325,296,032) ordinary shares of 0.001p		18,259,833	18,251,117

The share capital issues during the period are summarised below:

	Number of shares	Share capital at nominal value	Share premium
Ordinary shares		$	$
At 1 January 2021	1,325,296,032	18,254,040	145,343,446
Shares issued for cash	404,615,384	5,521	1,767,869
Shares issued on settlement of third-party fees	20,000,000	273	88,330
Share issue costs	-	-	(92,045)
At 30 June 2021	1,749,911,416	18,259,833	147,107,600

9.  Share-based payments

In the Statement of Comprehensive Income, the Group recognised the following charge in respect of its share-based payment plan:	30 June 2021 (unaudited)	30 June 2020 (unaudited)
$	$
Share-based payment charges incurred on incentivisation of staff included within administrative expenses	(153,039)	(148,924)
Share-based payment charges incurred on incentivisation of consultants included within administrative expenses	(11,066)	-
Share-based payment charges recharged to subsidiary undertakings on incentivisation of staff and consultants	(42,116)	-
	(206,221)	(148,924)
Share-based payment charges incurred on issue of options and warrants as part of loan financing facilities included within finance expense	-	(28,183)
Total share-based payment plan charges for the period	(206,221)	(177,107)

Options

Details of share options outstanding at 30 June 2021 are as follows:

			Number in issue
At 1 January 2021			157,552,800
Awarded during the period			88,000,000
Lapsed during the period			(52,800)
At 30 June 2021			245,500,000

Date of grant	Number in issue	Option price (p)	Latest exercise date
26 Oct 16	1,500,000	0.023	25 Oct 21
24 Jan 19	70,000,000	1.250	24 Jan 24
18 Dec 20	86,000,000	0.450	18 Dec 25
01 Apr 21	88,000,000	0.450	01 Apr 26
	245,500,000

These options vest in the beneficiaries in equal tranches on the first, second and third anniversaries of grant.

Warrants

Details of warrants outstanding at 30 June 2021 are as follows:

			Number in issue
At 1 January 2021			620,444,335
Awarded during the period			169,939,544
At 30 June 2021			790,383,879

Date of grant	Number in issue	Warrant price (p)	Latest           exercise date
09 Nov 17	31,853,761	1.000	09 Nov 22
01 Jan 18	2,542,372	1.000	01 Jan 23
01 Apr 18	2,083,333	1.500	01 Apr 23
01 Jul 18	2,272,726	1.780	30 Jun 23
01 Oct 18	4,687,500	1.575	30 Sep 23
24 Jan 19	112,211,999	1.250	23 Jan 24
16 Apr 19	90,000,000	1.000	14 Apr 24
30 Jun 19	4,285,714	1.000	28 Jun 24
30 Jul 19	3,000,000	1.000	28 Jul 24
15 Oct 19	191,347,084	1.000	13 Oct 24
31 Mar 20	49,816,850	0.200	30 Mar 25
29 Jun 20	19,719,338	0.350	28 Jun 25
28 Aug 20	78,616,352	0.600	28 Aug 23
01 Oct 20	10,960,907	0.390	30 Sep 25
01 Dec 20	4,930,083	0.375	30 Nov 25
31 Dec 20	12,116,316	0.450	30 Dec 25
01 Apr 21	16,998,267	0.450	31 Mar 26
01 Jul 21	24,736,149	0.250	30 Jun 26
14 Jan 21	128,205,128	0.325	14 Jan 23
	790,383,879

10.        Subsequent events

10 August 2021: Execution of a binding Heads of Agreement in respect of a farm-out to Beluga Energy Limited ("Beluga") of a 49% non-operating working interest in its Thali Production Sharing Contract in Cameroon, conducted through its wholly-owned subsidiary Tower Resources Cameroon S.A. The farm-out covers $15 million towards the cost of the NJOM-3 well that Tower is planning to drill on the Thali block. Beluga will receive a 49% working interest in the Production Sharing Contract, subject to production-based payments of 10%. The well cost is currently expected to be approximately $16.8 million, of which approximately $3 million has already been spent. Costs in excess of $15 million, and future costs, will be funded pro-rata with respect to each party's working interest.

11 August 2021: Placing for cash of £1.5 million via a placing of 352,941,176 new ordinary shares of 0.001p each at a price of 0.425 pence per share, a discount of 14% to the closing share price on 10 August 2021. Novum Securities Limited ("Novum"), acted as sole broker on this Placing was appointed to serve as Joint Broker to the Company going forwards. The Company has used the net proceeds of the Placing to repay the $750,000 loan facility from Pegasus Petroleum Ltd (whose ultimate beneficial owner is the Company's Chairman and CEO, Jeremy Asher) together with accrued interest and fees of $102,500, and to cover working capital requirements going forward, which will include; work programme costs in Namibia (for license PEL 96); South Africa (for the Algoa-Gamtoos license operated by 50% partner New Age Energy Algoa (Pty) Ltd and which adjoins the Total-operated blocks 11B/12B); funding maintenance and planning expenditure in Cameroon to maintain the long-lead items inventory ready for the commencement of drilling and testing of the NJOM-3 well, pending completion of the farm-out with Beluga; and general working capital purposes.

21 September 2021: Documentation of its farm-out to Beluga of a 49% non-operating working interest in its Thali Production Sharing Contract in Cameroon, conducted through its wholly-owned subsidiary Tower Resources Cameroon S.A was finalised, and the package of documents submitted to the Minister of Mines, Industry and Technological Development per the Cameroon Petroleum Code. Completion of the farm-out is still subject to two conditions precedent: the financing contingency requiring Beluga's shareholders' approval, and the Minister of Mines, Industry and Technological Development's approval. The Company would notify the market when both conditions precedent have been met.

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