Some of you will be familiar with a post I recently made elsewhere on this topic. Global and Tower (TRP) are partners on a drilling campaign in Uganda, the first well of which is due to spud in the next 10 days. The terms of the agreement between Tower and Global are given in this link:

and the rig deal is confirmed here:

Some sources elsewhere have claimed that the rig is indeed already on site as planned, but I have no way of confirming that. [Edit: 14/5/09 - the comparison of TRP with GBP below is now even more in favour of GBP, as the shares are today at 12p compared to TRP at 5.875p. 

 Edit(2): 29/5/09 The well spudded last night. This morning the comparison is STILL even more massively in favour of GBP, as the shares stand at 13.25p compared to TRP at 7.625p. Volumes in TRP in London are running at about 5 times the volume (by value) of trades in GBP, indicating that (even including Aussie trading) the market remains over-focussed on TRP, despite the fact that the upside for each company is more or less identical - but the potential returns for shareholders are MUCH greater in GBP. Reworking the figures below for yourself will show you exactly what I mean!]

In sum, therefore, Global have the right to earn a 50% onterest in the EA5 Uganda block by paying for the first two wells (on the Iti and Sambia prospects, both of which are estimated at c. 100mn bbls in size). And they have an option to stop after only the first well and still retain a 25% interest.

The market appears to believe (due to the focus on Tower in publicity over the drilling) that Tower (TRP) is the only way to play the Ugandan drilling, but it is clear that one gets a very much bigger bang for one's buck by buying GBP instead. I lay out the reasons for this below:

Tower: have over 657mn shares out, currently at 5.75p mid = market cap £37.8mn
Global: have nearly 175mn shares out, currently at 13.25p mid = market cap £23.2mn

Less cash after 1 well:
TRP (guess) GBP 1.2mn EV= £36.6mn
GBP AUD 26.27mn* = GBP 13.21mn (@1.988)...... so EV= £10.0mn

nb.....GBP cash figures…

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