The company is issuing 384.6mln new shares priced at 0.325p each in the placing, organised by ETX Capital.
Proceeds will be used to terminate and repay a US$500,000 loan facility with Shard Capital, which falls due at the end of February. The company said it will repay the facility without triggering conversion options.
The remainder of the proceeds will provide working capital and support the company as seismic data from the Algoa-Gamtoos license in South Africa is reprocessed and interpreted.
At the same time, the group said it will support maintenance spending in Cameroon – to maintain long lead item inventories ready for the start of drilling on the NJOM-3 well in the Thali license.
Talks are taking place with Pegasus Petroleum, a vehicle beneficially owned by Tower chief executive Jeremy Asher, regarding a US$750,000 loan facility which comes due on February 28, 2021.
Similarly, talks are continuing with potential farm-out partners for its Thali license and Tower said it hopes to have a more substantial announcement to make in due course.
“We are happy to complete this placing, which provides us with sufficient working capital to remain drill-ready in Cameroon, as soon as circumstances permit, and also allows us to contribute to the current work programme at Algoa-Gamtoos,” Asher said in a statement.
“It is still difficult to commit to firm time frames at present, both for operations and also financial transactions, but we are moving forward as quickly as we can, and remain confident that we will drill the NJOM-3 appraisal well and also bring in a partner for further 3D acquisition in Algoa Gamtoos.
“We are also continuing basin-modelling work in Namibia and await the results of other companies’ drilling there with interest. We are pleased to welcome ETX Capital as Joint Broker and thank them for delivering this placing smoothly.”