The AIM-listed oiler said it had placed around 138.7mln new shares at a price of 0.375p each, a 10.7% discount to its closing price of 0.42p on Friday.
Chairman and chief executive Jeremy Asher said the placing had been carried out to “mitigate the risk of running low on cash” as the company completed the farm-out of a 24.5% working interest in its Thali licence to Australia-based private company OiLR.
The farm-out will provide US$7.5mln towards the cost of the NJPOM-3 well at Thali, which has an estimated total cost of US$15-16mln.
Tower will also receive an overriding 10% royalty from the contractor’s share of production to cover costs already sunk into the well, with the agreement expected to be signed off formally on 15 April.
“We have kept the placing small because we do not like issuing shares at our current share price, given the superior economics for our shareholders of farming out on our agreed terms. Nevertheless, we felt that it was prudent to have some cash cushion at this time”, Asher said.
The shares were 17.4% lower at 0.35p in late-morning trading on Monday.
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