LONDON -- Tower Resources Plc. has secured approval from the Minister of Mines and Energy of the Republic of Namibia for a farmout by Tower subsidiary Neptune Petroleum (Namibia) Ltd. Neptune will relinquish 85% interest in a license that covers offshore blocks 1910A, 1911, and 2011A to Arcadia Petroleum Ltd. Operatorship for the license will also be transferred to Arcadia, Tower says.
Under the terms of the farmout, Arcadia has committed to fully fund a four-part program that includes cost associated with shooting the recently completed 2D seismic program and costs arising from its interpretation, shooting and interpreting a 3D survey to be gathered in early 2008, an exploration well, and a second well that could be an appraisal well or a second exploration well, depending on the results of the initial exploration well.
Arcadia has the option to withdraw from its commitment at the end of each of these four stages of operation or to assign all or part of its interest to a third party that agrees to meet the funding commitment. In the case of Acadia's withdrawal and failure to assign, the full 85% interest reverts to Neptune. Arcadia will also be required to reimburse Tower for 85% of certain historic costs.