ERHC Energy Inc (ERHE)

[manuel06]

midtier oil
take 2/3 of tower's total commitments to taipan for a starting point

Baz


VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 9, 2014) - Taipan Resources Inc. ("Taipan") (TSX VENTURE:TPN), through its wholly owned Kenya-based subsidiary Lion Petroleum Corp., has signed a binding farm-out agreement with Tower Resources (Kenya) Limited, a subsidiary of AIM-listed Tower Resources plc (LN:TRP) ("Tower"), whereby Tower will acquire a 15-per-cent participating interest in Block 2B onshore Kenya. Taipan will retain a 30-per-cent operated interest in Block 2B.

The principal terms of the farm-out agreement are as follows:

Tower will pay to Taipan US$4.5-million in cash at completion;
Tower will issue to Taipan 9-million shares in Tower Resources Plc in two tranches (the "Farm-In-Shares), 50% at completion and 50% three months following completion;
Tower will make a US$1.0-million payment to Taipan conditional upon the spud of a second well in Block 2B;
Completion is conditional solely on approval from Premier Oil Investments Limited;
Tower will, on and from the effective date of transfer, pay its participating interest share of costs incurred in conducting joint operations as per the provision of the joint operating agreement, the initial phase of which, are estimated to cost gross US$29.5 million;
Tower will provide guarantees for its share of the minimum work and expenditure obligations required under the PSC for Block 2B;