Tower Resources plc announced that it has executed a binding Heads of Agreement ("HoA") in respect of a farm-out to Beluga Energy Limited ("Beluga") of a 49% non-operating working interest in its Thali Production Sharing Contract ("PSC") in Cameroon, conducted through its wholly-owned subsidiary Tower Resources Cameroon S. A ("TRCSA"). The key economic elements of the transaction set out in the HoA are: The farm-out covers USD 15 million towards the cost of the NJOM-3 well that Tower is planning to drill on the Thali block; Beluga will receive a 49% working interest in the PSC, subject to an overriding royalty of 10% for Tower's subsidiary TRCSA on the contractor share of production accruing to Beluga under the PSC; The well cost is currently expected to be approximately US$16.8 million, of which approximately US$3 million has already been spent; Each party will recover costs actually funded and recoverable under the PSC, pari-passu; Tower will effectively contribute its non-recoverable costs in consideration of the 10% overriding royalty on the contractor share of production referred to above; Costs in excess of USD 15 million, and future costs, will be funded pro-rata with respect to Tower's and Beluga's working interests. The HoA are binding subject only to final documentation, a financing contingency requiring Beluga's shareholders' approval, and approval of the Minister of Mines, Industry and Technological Development ("MINMIDT"). The draft Joint Operating Agreement ("JOA") between Tower and Beluga has already been prepared, and together with the draft farm-out agreement will shortly be submitted to MINMIDT for approval, which is expected to occur within 60 days of submission of the file according to the Petroleum Code. Tower and Beluga intend to complete the transaction by 30th September 2021, subject to any delays in completing the conditions precedent. Tower, through TRCSA, will remain Operator of the Thali PSC under the JOA, and in the event the formal farm-in agreement and approvals cannot be completed in good time then Beluga will instead receive an appropriate share of the Operator's share capital and Tower's intercompany loans to the Operator, subject to a shareholder agreement, in order to reflect the intended farm-in economics and JOA terms. Tower has been advised by Envoi Limited and Powerline Consulting during the recent farm-out process. Tower is presently negotiating a contract for a rig to drill the NJOM-3 well, and will announce when this and other major service contracts in respect of the NJOM-3 well are concluded, though this is not expected to be until after completion of the farm-out agreement. Tower is also in discussions regarding an option agreement over a Mobile Oil Production Unit ("MOPU") suitable for the Thali project.