Tower has released its preliminary results for the 12 months ended 31 December 2019. While its statement notes the exceptional challenges that had faced the sector during 2020 up to the more recent recovery in oil prices to around US$40 per barrel.
The Board also points out that given its expected production profile, it is the price of Brent for forward delivery that is most relevant for it. In this respect, the price for forward delivery has been affected less by the recent difficulties in the prompt crude market, with the benchmark Brent for December 2025 delivery still above US$52 per barrel.
This has been reinforced by the farmout agreement with OilLR, (announced at the end of February 2020), which Tower still expects to complete in the near future along with interest also from other parties in a similar transaction.
Fundraising permitted US$4.7 million of net investment in the Company’s oil & gas assets during 2019 and its weak period-end balance sheet was bolstered by further small fundraising of £0.5m in March 2020.
Despite continuing uncertainties, management confirms its plans are now further advanced and determination to achieve its goals undiminished. It hopes to have more ‘concrete’ news for shareholders in the coming ‘weeks and months’.
We would draw your attention to the various disclaimers in the document both at the beginning and at the end of the note. Retail clients (as defined by the rules of the FCA) must not rely on the research document. In particular you should note that the research document is a non-independent marketing communication. The analyst who has prepared the research is aware that TPI provides research to Tower Resources plc. Accordingly the research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibitions on dealing ahead of its dissemination.
The information in the document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient.
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