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Tower Resources PLC on Tuesday said it has raised £1.5 million through a placing and subscription of around 857.1 million new shares.
Shares in the Africa-focused oil and gas company were down 31.1% to 0.20 pence each in London on Tuesday afternoon.
The placing and subscription shares were discounted to 0.175 pence each.
As part of the placing, Chair & Chief Executive Jeremy Asher subscribed to 142.9 million shares, worth £250,000. Asher now holds a 14% stake in Tower Resources.
Tower Resources said that the proceeds will be used to prepare the NJOM-3 well for drilling. The well is located on the Thali block in Cameroon and will cost around $18 million in total.
A small portion of the funds will also be used to advance the company's other work programs in Namibia and South Africa, it added.
Further, Tower Resources said that its subsidiary Tower Resources Cameroon SA and BGFI Bank Group are continuing to work towards a $7.1 million loan, which will also provide partial financing for the well. This is expected to be complete by the end of September.
In the meantime, Tower Resources is discussing other financing options for an additional $5 million to $10 million.
Asher said: ‘We are as confident as we can be about the completion of the TRCSA loan financing and other asset financing to complete the NJOM-3 well.
‘We are also paying attention to the tighter markets for rigs and services, and we want to keep the operational discussions moving in parallel with the financial discussions,’ Asher added.
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