African Exploration

African Exploration
From Frontier to Proven Basins
October 2015
Photo courtesy of Dolphin Geophysical
Disclaimer
Important Notice
DISCLAIMER
The information contained in these slides has been prepared by Tower Resources plc (the “Company”). This Presentation is being made for information purposes only and does not constitute an
offer or invitation for the sale or purchase of securities or any of the assets described in it nor shall they nor any part of them form the basis of or be relied on in connection with, or act as any
inducement to enter into, any contract or commitment whatsoever or otherwise engage in any investment activity (including within the meaning specified in section 21 of the Financial Services
and Markets Act 2000).
The information in this Presentation does not purport to be comprehensive and has not been independently verified. While this information has been prepared in good faith, no representation or
warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by the Company or any of its officers, employees, agents or advisers as to, or in relation to, the
accuracy or completeness of this Presentation, and any such liability is expressly disclaimed. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is
given as to the achievement or reasonableness of any future projections, management estimates or prospects contained in this Presentation. Such forward-looking statements, estimates and
forecasts reflect various assumptions made by the management of the Company and their current beliefs, which may or may not prove to be correct. A number of factors could cause actual results
to differ materially from the potential results discussed in such forward-looking statements, estimates and forecasts including: changes in general economic and market conditions, changes in the
regulatory environment, business and operational risks and other risk factors. Past performance is not a guide to future performance.
The cover photo in this Presentation is for illustrative purposes only and is not a photo of the Company’s assets.
The Presentation is not a prospectus nor has it been approved by the London Stock Exchange plc or by any authority which could be a competent authority for the purposes of the Prospectus
Directive (Directive 2003/71/EC). This Presentation has not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000.
The information contained in this Presentation is subject to change, completion or amendment without notice. However, the Company gives no undertaking to provide the recipient with access to
any additional information, or to update this Presentation or any additional information, or to correct any inaccuracies in it or any omissions from it which may become apparent.
Recipients of this Presentation in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements. This Presentation does not constitute an offer to sell
or an invitation to purchase securities in any jurisdiction.
© 2015 Tower Resources plc
2
Tower Resources
Moving from Frontier to Proven Basins
Tower today
 Strong portfolio

Low commitments; large upside

Adding lower risk proven basin exposure to balance frontier activity
•
Cameroon Thali block (Proven) – Signed 15 Sept 2015
•
Namibia (Frontier)
•
Zambia and South Africa (Frontier)
Structured for growth
 Dedicated & experienced core team

Flexible overhead & resource availabilities

Proactive deal generation

New technical NED appointed
July 2015 Placing

Capital raise of US$8.0 million (net)

Director’s commitment in excess of US$1.2 million

M&G cornerstone investment of US$3.5 million (18% holding)

Standard Life investment of US$1 million (5% holding)
© 2015 Tower Resources plc
3
Tower Resources
Capital Structure
Shareholders
Capital Structure
Listing
AIM
Share price
0.11p
Market capitalisation
~ US$11m
Issued share capital
6,764.4m
Options & warrants
Balance sheet
365.9m (5.2%)‡
~ US$5.5m cash
Directors’, staff and
consultants’ holdings
Average Daily Volume†
15.9%
16.8 million
12 month high (at close)
0.80p
12 month low (at close)
0.11p
Data correct at close on 23 October 2015
* Director
†
Based on last three months trading
‡ Including 120 million options agreed to be issued
© 2015 Tower Resources plc
4
Tower Resources
Tower’s Team
 Board strengthened for new challenges
 Dr Phil Frank joins as Technical NED
 Directors, employees and consultants
own ~16% of issued share capital
Jeremy Asher
Non-Executive
Chairman
Peter Blakey
Non-Executive
Director
Dr Philip Frank
Non-Executive
Director
Philip Swatman
Independent NonExecutive Director
Peter Taylor
Non-Executive
Director
Nigel Quinton
Exploration Director
Andrew Matharu
VP – Corporate Affairs
Eric Griffith
Portfolio Asset Manager
Andrew Smith
Financial Controller
 Strategic partnership with PDF Limited
providing Outsourced Exploration
Department (OExD®)
 OExD® providing excellence with flexibility
Graeme Thomson
Chief Executive Officer
• In 2014 provided 45 personnel with 750
years of collective experience,
approximately 11 FTE utilised
• In 2015 (YTD) provided 23 personnel
and approximately 5 FTE utilised
 Strong team with low overheads
 Everyone incentivised through part
OExD
Exploration Team
Exploration
Geoscientists
Geophysics
Petrophysics
Structural
geology
Seismic QC
Geochemistry
Stratigraphy
Potential
Fields
Reservoir
Engineering
payment in shares or via options
© 2015 Tower Resources plc
Specialists
5
Tower Resources
Tower’s Exploration Strategy
Transformational returns through material discovery – via a risk-managed portfolio
ACCESS
New Acreage
RISK
• Typically Frontier or
Emerging Basins
• Operated in early
phases maintaining
control
• Add value through
strong technical team
• Downturn allows access
better opportunities
DE-RISK
Partnering
• Farm-outs at critical
stages
• Fall in seismic and drill
costs; chance to riskshare with contractors
• Aspire to zero-cost
exploration
• Continuously improve
portfolio
TRADE
M&A
• Capitalise on increasing
value of portfolio
• Access Emerging and
Proven Basins
• Participate in sector
consolidation
DRILL
Delivery
• Fund through farm-outs
• Return transformational
value through discovery
REWARD
© 2015 Tower Resources plc
6
Tower Resources
Exploration Portfolio Reflects Strategy
Proven Basins
 Cameroon Thali (ex- Dissoni) block – New
Country Entry as Operator with discoveries
already on block
Frontier Basins
 Namibia – New Licence Applications
 Zambia – Source rock confirmed
 South Africa – renewal granted
 SADR – Kosmos discovery derisks
© 2015 Tower Resources plc
7
Cameroon, Rio del Rey Basin
Thali Block – PSC Signed 15 September 2015
Thali (Ex-Dissoni) Block
New exploration/appraisal licence in the Rio del Rey
sub-basin of the prolific Niger Delta basin
Two discoveries on-block in shallow water
Opportunity to acquire modern 3D seismic to unlock low-risk
upside in the proven play and image new exploration plays that
are proven nearby
THALI PSC
© 2015 Tower Resources plc
8
Cameroon, Rio del Rey Basin
Thali Block – proven plays in Niger Delta
Rio Del Rey Basin
Regional Hydrocarbon Provinces
Nigeria
Cameroon
Extensional Province

Underexplored sub-
RIO DEL REY BASIN
> 2 Billion bbl / >1.4 TCF
Mobile Shale Belt
Fold-Thrust Belt
basin of the prolific
Niger Delta

UBIT
2 Billion bbl
>> 34.5 Billion bbls
found in whole Niger
EDOP
1 Billion bbl
Delta Basin

OAK
THALI
SODALITA WEST
OIL DISCOVERY (2015)
>1 billion barrels
produced to date in
ALBA
>5 TCF
Rio del Rey basin

ZAFIRO
1.2 Billion bbl
2012 Oak discovery
extends play fairway
© 2015 Tower Resources plc
RODO-1
OIL DISCOVERY
(2015)
USAN
>500 MMbbl
Equatorial
Guinea
Bioko
Island
9
Cameroon, Rio del Rey Basin - Thali Block
Proven Oil and Gas on Block
Low-Risk Fault-Blocks Close to Existing Infrastructure
 25 MMbbl Thali North field lies
DISSONI NORTH
25 MMbbl
immediately north of the Thali block
 Developed by Perenco – planned peak
production 12,500 bopd 35o API oil
 Cameroon oil production 15% up in
2014/15 largely due to Dissoni North
 Two undeveloped discoveries
 Multiple undrilled fault block leads
RUMPI
IDENAO FAULT
BLOCKS
~60 MMbbl
AKONO-ERONG
FAULT BLOCKS
~25 MMbbl
 Low risk, shallow, stacked targets
NJONJI
DISCOVERY *
7 MMbbl (TOTAL)
15 MMbbl (TOWER)
 Summed Pmean resource potential:
>100 MMbbl
NJONJI FAULT BLOCKS
~30 MMbbl
Fault Block Lead
Pmean Reserve
estimates
FIELDS/DISCOVERIES
* Neither the TOTAL or the Tower Njonji discovery
estimates have been externally verified. Tower’s estimate
is an internal estimate based on currently available data.
Tower has not booked any reserves on this asset.
© 2015 Tower Resources plc
2.5km
Oil Field
Oil Field (Undeveloped)
Gas Field
Gas Field (Undeveloped)
Pipeline
Platform
10
Cameroon, Rio del Rey Basin
Shallow Production – Deeper Exploration
GROWTH FAULT ZONE
OONGUE
MOBILE SHALE BELT
KARA
ASOMA
ERONG
DISSONI
NORTH
FOLD-THRUST BELT
NJOM
DBM1
THALI BLOCK
SSE
NB: LOCATIONS OF WELLS IS SCHEMATIC TO HIGHLIGHT PLAYS TESTED
NNW
MAJORITY OF
DISCOVERED
RESERVES
APPROXIMATE
DEPTH
1km
UNDEREXPLORED
PLAYS
2km
MINI BASIN
PLAYS
ZAFIRO TYPE
PLAYS
ALBA TYPE
PLAYS
3km
Miocene - Recent Deltaics
Palaeogene Shales
Cretaceous & Older
~5 km
 More than 1 billion barrels discovered to date in shallow deltaic plays in the Rio del Rey sub-basin
 Deeper (1,500-3,000m) plays under-explored - significant potential recognised in stratigraphic traps
 Exploration plays are proven in Nigeria, Equatorial Guinea, and in Etinde (Bowleven/New Age)
© 2015 Tower Resources plc
11
Cameroon, Thali Block
Significant Exploration Potential
Underexplored Sandstone Plays
 Billion barrel fields along trend in Eq. Guinea
 >400 MMbbl & 1.5 TCF identified in Thali
 Marathon oil discoveries in Equatorial Guinea
extend fairway
Forward Programme
 Acquire new 3D seismic to update 20 year old
data set and allow better resolution of shallow
plays plus imaging of deeper section
 Multiple play types identified
 Take advantage of lower seismic & drilling costs
ZAFIRO OIL FIELD
>1 billion bbl
2.5km
THALI BLOCK
New Strat Play
Giant Zafiro Oil Field (Equatorial Guinea) along trend of the Thali Block
© 2015 Tower Resources plc
12
Cameroon, Rio del Rey Basin
Thali Block - Licence Overview
Thali Block
Licence Commitments
Offshore, Rio del Rey Basin
Area: 119 km²
Water Depth: 8 - 48 m
Tower interest: 100%
Initial Exploration Period
- 3 years
- Min expenditure $13MM
G&G studies
3D seismic acquisition (100 km²)
x1 well (>1100m)
First Renewal Period
- 2 years
- Min expenditure $15MM
x1 exploration or appraisal well
Second Renewal Period
- 2 years
- Min expenditure $15MM
x1 exploration or appraisal well
Signature Bonus:
- $2M 30 days after signature
- $1M after two years
BOLONGO
Thali Block - Planned Work Programme
Sign PSC
Sept 2015
2015
x1 exploration or
appraisal well
3D seismic acquisition
(~100 sq km)
2016
Initial Exploration Period
G&G, 3D seismic acquisition,
x1 well (TD >1100m)
© 2015 Tower Resources plc
2017
2018
x1 exploration or
appraisal well
2019
2020
First Renewal Period
x1 exploration or appraisal well
x1 exploration or
appraisal well
2021
2022
Second Renewal Period
x1 exploration or appraisal well
13
Tower Resources
Namibia - New Licence(s)
 Regional review post
MID - LATE CRETACEOUS TURBDITE PLAYS
Welwitschia has highgraded Walvis and Namibe
Basins in north of offshore
area
Cretaceous sands
60m net thickness
>24% av. porosity
 Namibia remains very
underexplored and
downturn opens
opportunity
Albian carbonates
Net Thickness: 28m
Porosity: 18%
Late Cretaceous sands
35-90m net thickness
>25% av. porosity
 Wingat-1 and Kunene-1
prove working oil and gas
plays
EARLY - MID CRETACEOUS CARBONATE PLAYS
Oil shows in Albian carbonates
Net Thickness: 35m
Porosity: 15-25%
TULLOW (PEL30, 37)
Acquired 3D seismic
Drilling in 2016-17
Maastrichtian sands
115m net thickness
18% av. porosity
Wingat-1
38-42⁰ API oil
recovered from
Albian turbidity sands
AZINAM increased
stakes in PEL34 & 71
Early - Middle
Cretaceous carbonate
platform / build-ups
over the Walvis Ridge
Santonian sands
36m net thickness
19% av. porosity
 Shell and OMV/Murphy
expected to drill in south in
2016/17
 Tullow and Chariot possibly
SHELL (PEL39)
Drilling Lower Cretaceous
carbonate prospect in
2016-17
drilling in Walvis in 2016/17
 In negotiation with Ministry
for enlarged acreage
position with low up front
commitments
© 2015 Tower Resources plc
IMPACT (PEL56)
Targeting Aptian turbidite plays
- 3D planned for H2 2015
CRETACEOUS
ORANGE RIVER
DELTA
SHELL (RSA)
Aardwolf Prospect
Cretaceous carbonate build-up
14
Namibia Offshore - ‘Northern Area’
Play Concepts
 Multiple plays identified
NAMIBE BASIN
(SCHEMATIC CROSS-SECTION)
 Proven source reservoir and seal elements
from existing wells
 Extremely underexplored with less than one
well every 10,000 km2.
 Good 2D seismic coverage, but recent data
offers increased insight
 Needs thorough geological review to
• Tie down likely extent of source and
reservoir facies
DOLPHIN GRABEN
(SCHEMATIC CROSS-SECTION)
• Understand thermal history and maturity
of source rocks
• High grade areas for new 3D acquisition
or confirm locations for drilling existing
prospects
 Multiple billion barrel potential remains
© 2015 Tower Resources plc
15
Zambia, Blocks 40 and 41
Why Zambia? ‘There is no oil there….’
 But has anyone really looked? No
 The Mid-Zambezi Basin:
Historic focus 25-30yrs
ago in Luangwa Basin –
Only two wells drilled
A 25,000+ km2 rift basin with source
and reservoir but no oil & gas
exploration wells, nor even any
seismic data.
 Excellent potential for a gas to power
market, good infrastructure
Tower Resources
Blocks 40 & 41
- 6,526km2 position
in untested
Mid-Zambezi Basin
Exploration in
Zimbabwe portion of
basin concluded best
prospectivity lay in
Zambia
250 km
Copyright © 2015 Tower Resources OExD
All Rights Reserved
16
Zambia, Blocks 40 and 41
Proven Source Rocks & Reservoirs

Key play elements proven in Blocks 40 & 41
by initial field work in 2014, with additional work in 2015:
Play Stratigraphy of Blocks 40 & 41
SUPERAGE
(Ma) STAGE GROUP
 Widespread source rocks
 Excellent Gas potential
TERT.
KALAHARI SSTS
JURA.
BATOKA BASALT
~200
RED SST
TRIASSIC
 Multiple reservoirs
 Thick regional seals
2015 fieldwork focussed on evaluation of the proven
plays

Seeps reported – field investigation planned for Q4
~250

Presence Effectiveness
Oil & Gas Prone

Presence Effectiveness
Multiple Plays
PERMIAN
PLAY ELEMENTS
RESERVOIR
SEAL

Presence Effectiveness
Thick & Regional
DELTAFRONT
~300
ALLUVIAL
FAN
CARB?
=
Copyright © 2015 Tower Resources OExD
All Rights Reserved
INTERBEDDED
SANDS AND MUDS
ESCARPMENT
GRIT
‘LOWER KAROO’
[Lacustrine]
[Delta Plain]

SOURCE
‘UPPER KAROO’
[Fluvial]
 Additional Oil potential
MADUMABISA
MUDSTONES
GWEMBE
MUDSTONES
& COALS
SUB-GWEMBE
SSTS
BASAL
COARSE CLASTICS
BASEMENT
17
Zambia, Blocks 40 and 41
East Irish Sea – analogy for scale, basin history
East Irish Sea Basin:
EAST IRISH SEA
• Total Gas Recoverable - 8.3 TCF
• Total Oil Recoverable – 209 MMBBLS
A
25km
25km
Strong comparison to the Mid-Zambezi Basin for
basin history and play style :
• Permo-Triassic sandstone plays charged by coal
measures
BLOCK 41
• Large uplift and erosion (Mesozoic-Tertiary)
• Relatively shallow structural traps today
• Charge retained due to world-class
SW seal
• Extensional trapping geometries with local
0A
Fau
lt
t
Fa
ul
Fau
lt
Ha
mi
lto
n
Fau
lt
Ha
mi
lto
n
in
t
)
Namurian
Carboniferous
Go
Goga Shales
Go
r
ga 3 km
(Ingar th0 F
(Inverth Fault (In r th F
a
ve ted aul
rte ) t verte ult
d)
d)
Mudstones
Sherwood Sandstone Group
F ault
5km
r th
Fau
ve
lt
rte
d)
A
Sherwood SandstoneGroup
as in
ster B
All Rights Reserved
12,000
1
MerciaMudstoneGroup
MerciaMudstoneGroup
MerciaMudstoneGroup
Triassic
Mercia
m
E.D ee
Copyright © 2015 Tower Resources OExD
(In
ault
12,000
12,000
F
asin
Carboniferous
Go
ga
(In r th Fa
ve
ult
rte
d)
ault
F aFualtult
in in
as in F
r aBsas
ster B
streB
mst
me
eeee
E.D
E.D
12,000
F ault
12,000
asin
10,000
10,000
ster B
8,000
m
E.Dee
8,000
6,000
LENNOX
4,000
2,000
110/13-14?
110/14-1
110/15-6
2,000
2,000
Net Extension
A'
6,000 Net ExtensionNet Extension
4,000
1km
Mercia Mudstone Group
4,000
4,000
?
8,000 ?
?
6,000
6,000
6,000
Sherwood Sandstone Group
2km
10,000
Carboniferous
8,000
8,000
8,000
Go
Perm
ian
C
arb
on
iferous
Coal
ga
12,000
r th
(In Measures
Fau
10,000
veCarboniferous
G
3km
r
10,000
o
10,000
ted lt
ga
Carboniferous
ster B
6,000Net Extension
?
NE
L
Mercia Mudstone Group A'
NE
em
E.De
110/13-16 110/13-9 110/13-1
?
2,000
4,000
NE
NE
110/15-6
A'
East Deemster Basin
Ha
mil
ton
HAMILTON
A
Net Extension
0
0km0
HAMILTON EAST
m
E.D ee
NetDOUGLAS
Extension
110/13-20
110/13-19
110/13-2
110/14-1
Fo
FoFo
rm
rmrm
by
byby
Po
PoPo
in
in in
tF
t Ft F
au
au au
lt
lt lt
Fo
rm
by
Po
in
tF
au
lt
A
2,000
(TVDSS)
2,000
0
LENNOX
East Deemster Basin
East Deemster
Basin Basin
East Deemster
LENNOX
A
A'
DOUGLAS
HAMILTON
LENNOX LENNOX
DOUGLAS
HAMILTON HAMILTON EAST
110/13-16
110/13-9
110/13-1
110/13-14
110/14-1
0
110/13-20
SW
N
110/13-20
110/13-20
110/13-19
110/13-2
110/13-16
110/13-9
110/13-1
110/13-14
110/14-1
110/15-6
DOUGLAS
HAMILTON
HAMILTON EAST
MerciaMudstoneGroup
E
110/13-19
110/13-2 110/13-16
110/14-1 110/14-1LENNOX
110/15-6 110/15-6
110/13-19
110/13-2 110/13-9
110/13-16110/13-1
110/13-9 110/13-1110/13-14 110/13-14
Depth km
110/13-20
110/13-19
110/13-2
Gogarth Basin
SW
HAMILTON EAST
HAMILTON
Gogarth Basin
East
IrishDOUGLAS
Sea
Gogarth Basin
Basin
Gogarth Basin
SW
110/13-20
HAMILTON HAMILTON EAST
110/13-19
110/13-2 110/13-16 110/13-9 110/13-1
110/13-14
Structural
Style
HAMILTON EAST
DOUGLAS
HAMILTON HAMILTON
EAST
SW
DOUGLAS SW
0
4,000
A
Gogarth Basin
SW
Gogarth Basin
H
a
Fo aH
Ha
rmmim
ilto
lto
mil
nF
nF
by
aualtu lt ton Fa
Po
u lt
inversion against basin-bounding faults
A
Tower 2014-2015
field data points
Scale Comparison:
East Irish Sea
B Fields and The Rift
East Deemster Basin
NE
Zambia
Blocks
East
Deemster
Basin
Sherwood SandstoneGroup
Triassic
Fluvial
Sherwood
SandstoneGroup
Sherwood
SandstoneGroup
Permian
Sandstones
Permian
Permian
Permian
Permian Permian
Carboniferou
s
0
3km
0
0
3km
18
03km
3k
South Africa – Rift Portfolio
Well placed in areas targeted by Majors
2014 Acquisition of Rift
Petroleum
 Algoa-Gamtoos (50%,
Operator: New Age)
 3D acquired in 2014
 1st Renewal Period of
Algoa-Gamtoos granted in
Sept 2015 – additional
seismic planned in 2017
 Oil-majors in neighbouring
South African licences:
• Total, Exxon, Shell,
Anadarko
• Brulpadda 1 testing new
deep-water play
© 2015 Tower Resources plc
19
Tower Resources
Anticipated Activity
(All timings are estimates based on the best available information, but are subject to change)
© 2015 Tower Resources plc
Farm-out opportunities
Milestone – decision point for entering next period of licence & taking on forward work programme commitments
20
Tower Resources
Summary
An Optimised Exploration Portfolio
 Moving towards Proven from Frontier Basins
 Cameroon entry in Sept 2015 with existing
discoveries
 Strengthened and focussed team
 Strategy focussed on risk management
 Flexible portfolio
• Low near-term commitments
• High potential
 Defined plan for growth and near-term value
creation
© 2015 Tower Resources plc
21