Tower Resources, an oil and gas exploration company, has acquired Comet Petroleum, which has a 50 per cent stake in two oil and gas exploration licences in the Guelta and Bojador Blocks located in the Saharawi Arab Democratic Republic (SADR), also known as Western Sahara.

The acquisition of Comet’s assets will be initially funded through the issue of 721,544 new ordinary shares at 6.542p. This equates to the verified back costs of £47,201 incurred by Comet in respect of its interests in the assets being acquired.

A further payment is expected once the licences have become operative, which will occur when SADR reaches an agreement with Morocco to become an independent nation state. Prior to this agreement, a state for force majeure will apply, which is governed by an “assurance agreement” between the licensee and the SADR.

Western Sahara has been the subject of a long dispute between Morocco and the Algerian-backed Polisario Front. Most of the territory has been under Moroccan control since 1976.

The further payment to Comet will be determined through an independent valuation of its share of the assets at that time, subject to a minimum payment of £500,000 per licence and a maximum payment of £1.5 million per licence. This will be satisfied through the issue of shares in the company.